Middle-Range Planning
13th Middle-Range Planning “MP-13” and positioning of “VISION2027”
VISION2027
Our Vision 2027

“A cosmetics company possessing unique strengths in specialized areas (not an “all-rounder”).”
1 Authentic proposals

2 Global & ʻOnly Oneʼ
3 Exciting & Excellent

VISION Slogan

Use our ʻOnly Oneʼ strengths to provide Dedication to Service (Oyakudachi) to a billion people around the world.

VISION Policy

1 Leverage Asiaʼs economic growth to evolve into a truly global company
2 Display greater Dedication to Service (Oyakudachi) in the menʼs business and invest

aggressively to expand our womenʼs business.

3 Provide authentic products and services to develop a MANDOM WORLD inspired by theconcept of stock-oriented management (the idea of strengthening or “stocking up” various assets
including ties with our stakeholders by providing authentic and valuable products and services).

Image
OverseasJapan

Breakthrough inspired by
future-orientation

Overseas

Men

Business Domain
Women

Men

2027

Growth Strategy

2016

Japan

Profit Structure

Women

Human Asset Development

Background of MP-13 Formulation (External Environment, Internal Issues)
External environment●

Products▲▲

Threats/ Lengthening of ramifications of COVID-19
risks
Climate change/abnormal weather
2050 Carbon Neutrality Declaration
Changes in consumer lifestyles
Diversification of consumer values
Sudden changes in business environment due toexponential technological developments
Declining birthrate and aging society (Japan)

Issue awareness

●

●

●

●

●

●
●
●

●

●

Sluggish growth of GATSBY brandGrowth potential of womenʼs cosmetics
Product portfolio
Greater emphasis on items used for outings, which
are impacted by COVID-19
Shift in menʼs cosmetic portfolio
Acquire innovators for menʼs cosmetics●●

Region▲▲Opportunities Emergence of new wants in transition to the newnormalRise in environmental consideration and awareness,
primarily among young people
Expansion of ethical consumption
Growing expectations for the realization of well-being
Market expansion resulting from greater hygieneawareness
Elimination of information time lag due to globalization
Expansion of EC market
Expansion of GDP in Asia

●
●
●

●

●

●

●

●

●

●

Shift in shopping opportunities to EC
Intensified competition in the menʼs cosmetics market
Increase in new participants entering cosmetics
market (Japan)
Shrinking hair styling market (Japan)
Disappearance of inbound demand (Japan)
Declining earnings ratio in Indonesia●●

Internalstructure

▲

●

●
●

●
●

Identifying Materiality ➡ P.23

62

Mandom Report 2023●●

Declining earning capabilities (profit margin)
Distribution partnersʼ roles and terms andconditions of transactions
Low composition of EC sales in sales mix
Breaking away from self-sufficiency
Breaking away from successful past experiences
Initiatives for sustainability

About Mandom

VISION2027
FY2016FY2017FY2018FY2019FY2020Plowing

FY2021

FY2022

FY2023

Seeding

FY2024FY2025

FY2026FY2027

Blossoming andharvesting
Value Creation Story

MP-12 Infrastructure Development* Growth image

Pre-

MP-13

MP-13 Reformation and Challenges

●
●
●

●
●

●
●

●

●
●
●

●
●

Newly include ROIC as a profitability target
Sustainability strategy placed at the core of management structure
Strengthen EC channel
Strengthen open innovation initiatives with external partners
New Dedication to Service (Oyakudachi) in the realm of Health,Cleanliness, Beauty and Fun
Generate resources to create new value through utilization of DX
Propose products with an ethical perspective to attract customers

2. Complete recovery of Indonesia business in a speedy
manner and reform business model of overseas
operations

3. Shift to a company that creates new value throughdigitalization and open innovation

Company Information●

Strengthen EC channel (Japan/overseas)
Strengthen digital marketing (Japan/overseas)
Strengthen menʼs face care and body care categories (Japan/
overseas)
Strengthen local development for GATSBY (overseas)
Initiatives to improve profitability in Indonesia

1. Evolve and take on challenges in category strategy
for the new normal; cross-company marketingtransformation to improve brand value

Performance for the Fiscal Year Ended March 31, 2022●

Restrengthen GATSBY brand (Japan/overseas)
Propose new line from GATSBY (Japan)
Continue to strengthen Bifesta brand (Japan/overseas)
Enter hygiene market with sale of MA-T Pure (Japan/overseas)
Expand to roll out our makeup brands such as Pixy and
SILKYGIRL into new countries (overseas)

Basic management policies
Middle-Range Planning●

Materiality

Period of transformation and challenges to achieve “VISION2027”

Response●

MP-14 Accelerated Growth

4. Increase corporate value focused on sustainable
management and evolve Dedication to Service(Oyakudachi)

Mandom Report 2023

63

Middle-Range Planning

Look Back at Previous Middle-Range Planning
MP-10

Positioning

MP-11

Summary

4/2017-3/2020“Only One” Company in Asia with
Global Management Expertise

Middle-Range Planning to
Accelerate Growth and Cultivate
New Business in Asia

Corporate Infrastructure
Development for Realizing“VISION2027”

Aim to establish competitive advantages
by strengthening business expansion in
major markets and increase sales volume
by cultivating new markets and businessfieldsFirst of three phases to achieve“VISION2027”
Aim to become a truly global company
through proactive investments tostrengthen marketing and internal controls

We will further promote the shift to Asia
for the Groupʼs management in order toincrease our competitiveness in the Asianmarket, which has high growth
expectations.

Announced our corporate philosophy of a
new “MISSION” focusing on the conceptof “Human-Orientation,” and“VISION2027,” the company figure that
Mandom will become in 2027 when it
marks the 100th anniversary of thefounding of the Company.

Shifted to Planning from backcast
perspective. Envisioned the ideal formand shape Mandom should take from along-term perspective and developed aplan which aimed higher, not simply
continuing the path of the past.
●

Stable growth in menʼs grooming
business, the Companyʼs corebusiness
Aim for stable growth as a corebusiness; maintain and expand themarket share in categories of the menʼsgrooming segment.

●

Bolster the development of womenʼs
cosmetics business
Aim to strengthen and cultivate the rollout
of products centered on skin careproducts, with the product lineups catered
for the markets in each country where theoperation of business is in place.

●Continue strengthening overseas
business operations with Asia as
growth engine
Establish Indonesia and China as
strategic markets and aim for proactive
business expansion to establish thegreater Asian market presence andimprove the growth of the Group. In
addition, construct distribution networkand expand businesses in Indian andIndochinese markets, which have afuture growth prospect.

Numerical Targets
Consolidated Net Sales
Menʼs Grooming
Business Average Annual
Growth Rate“GATSBY” Brand
Average Annual Growth
Rate
Womenʼs Cosmetics Business
Average Annual Growth Rate
Note: Womenʼs business in MP-12

Consolidated Overseas
Net Sales Average
Annual Growth Rate
Consolidated Operating
MarginNote: Operating income amount in MP-11

Consolidated Payout
Ratio

Results and Issues

Foreign Exchange Impact
Rupiah/JPY (period average)
Middle-Range Planning Initial Set
Rate and Actual Rate by Year64

Mandom Report 2023

Pre-MP-13

4/2014-3/2017

Focus on Dedication to Service(Oyakudachi) in Asia to accelerate growthin Group businesses

Key Points

MP-12

4/2011-3/2014(Targets)¥66,000 million
or more(Actual)●Achieve sustainable growth inmenʼs grooming business

Aim for sustainable growth as a corebusiness; maintain and expand themarket share in categories of the menʼs
cosmetics segment.
●●

1 Develop a category into a robust pillar
2 Increase brand value●

Speed up the development of
womenʼs cosmetics businessContinue strengthening overseas
business operations as growthengineAim to expand the scale of operation bystrengthening initiatives for Indonesianmarket as the major market andconstruct the foundation for developing
markets, such as building a distribution
network in China and Indochina.

(Targets)¥68,200 million¥83,000 million

3.2% or more

5.4%

3.6% or more

5.9%

19.3% or more

(Actual)Improvement of growth in overseas
business with a focus on Indonesia
1 Indonesia: Provide greater Dedication

to Service (Oyakudachi) for middleincome class

Aim to speed up development in Asiawith a product lineup customized toeach country by focusing on the skincare and base makeup categories.
●

Promotion of category strategies andthorough enhancement of brand value

2 Asian countries other than Indonesia:

Promote marketing measures uniqueto each country by understanding
consumer wants and achieve higher
profitability●

Building a group operation system
and improving productivity per unit
1 Increases in the decision-making

accuracy and speed by building theGroupʼs personnel affair system,
accounting system, and information
system, and building a structure toincrease productivity per unit
2 Build a structure that allows theprompt formulation andimplementation of strategy at
operating companies(Targets)(Actual)¥77,300 million¥90,000 million¥81,700 million

5.2% or more

2.6%

3.0% or more

-0.6%

11.8%

15.0% or more

15.9%

10.0% or more

11.1%

9.4% or more

11.3%

11.4% or more

4.8%

10.0% or more

6.8%

10% or more

10.0%

¥8,600 million¥7,600 million

10% or more

7.1%

40% or higher

40.0%

40% or higher

40.3%

40% or higher

63.5%

・The menʼs grooming business exceeded
target growth rates mainly for “GATSBY”
and achieved targets for consolidated
net sales.
・The womenʼs cosmetics business had
sluggish growth in Japan and did notreach targets.
・The overseas business performed well,and the annual growth rate was over
10%, exceeding the target.
・The consolidated operating margin was
10%, reaching the target.

MP-10
Set Rate¥0.0093

2011: 0.0091
2012: 0.0086
2013: 0.0093

・Although the womenʼs cosmetics
business reached the target growth rate
due to growth of “Bifesta,” consolidated
net sales did not reach the target due tosluggish growth in the menʼs grooming
business.
・The overseas business did not reachtargets due to the impact of the factory
accident in Indonesia.
・Consolidated operating income did notreach the target primarily due to net
sales being below the planned level.

MP-11
Set Rate¥0.0085

2014: 0.0089
2015: 0.0091
2016: 0.0083

・We were able to execute just about allof the infrastructure development
initiatives we should have executed.
・Net sales in menʼs grooming businessdecreased due to the impact of reduced
sales of summer seasonal goods due topoor weather in Japan in the fiscal year
ended March 31, 2020.
・Womenʼs cosmetics business continued
to reach the target growth rate due tostrong performance of “Bifesta” and “Pixy.”・In addition to net sales being below theplanned level, the injection of expenses
associated with infrastructuredevelopment also contributed to thetarget consolidated operating margin not
being reached.

MP-12
Set Rate¥0.0083

2017: 0.0084
2018: 0.0078
2019: 0.0077

Outline of “MP-13 (April 2021 through March 2024)”

Theme

Transformation and Challenges to Realize “VISION2027”
1. Evolve and take on challenges in category strategy for the new normal;
cross-company marketing transformation to improve brand value

Value Creation Story

Basicmanagement
policies

About Mandom

MP-13 4/2021-3/2024

1 Quickly construct cross-company structure that leads to accelerating growth in overseas and womenʼscategories
Improve value of global brands (GATSBY/Bifesta) across Asia
3 Improve quality and expand regions where Dedication to Service (Oyakudachi) is offered in the
COVID-19 and the post-pandemic world2

2. Complete recovery of Indonesia business in a speedy manner and reformbusiness model of overseas operations
1
2

Materiality

Quickly build a structure and ensure its operation to solve the issues in Indonesia businessAccelerate growth by strengthening alliances between overseas countries and marketing areas;
improve management efficiency

3. Shift to a company that creates new value through digitalization and open
innovation
1
2

Achieve success in DX (digital transformation) resulting in the realization of wellness
Create and expand new beauty and grooming culture that includes external knowledge

1
2

Middle-Range Planning

4. Increase corporate value focused on sustainable management and evolve
Dedication to Service (Oyakudachi)
Promote business expansion that contributes to solving social issues (ESG/SDGs)
Advance capabilities to create unique values and improve corporate branding

Basic management targets
Growth Potential¥81.5 billionMenʼsbusiness

CAGR by business

Womenʼsbusiness

CAGR

10.7%

Consolidated Operating
Margin

8.0% or higher

Consolidated ROIC

7.0% or higher investments)/invested capital

Overseasbusiness

6% or higher
16% or higher
17% or higher

Performance for the Fiscal Year Ended March 31, 2022

Profitability

Consolidated Net
Sales

ROIC = (NOPLAT*1 + gain/loss from equity-method*2*1 (Operating income + interest income + dividend income) (1 - effective tax rate)*2 Borrowings + corporate bonds + lease liability + net assets [uses the average values of beginning and ending balances of the fiscal year]

Promote eco-friendly products
Japan:

60% of domestic products are eco-friendly(in line with voluntary standards)

Indonesia: Reduce volume of plastic containers/packaging by
Reduce volume of plastic waste byCompany Information

Address Social Issues

10%

10%

(compared to FY2016)(compared to FY2016)

Mandom Report 2023

65

Middle-Range Planning

Look Back on the Fiscal Year Ended March 31, 2023
The fiscal year ended March 31, 2023 was the second year of the 13th
Middle-Range Planning (hereinafter “MP-13”). MP-13 was positioned as aperiod of transformation and challenges to achieve “VISION2027” for the
100th anniversary of the founding of the Company. The Company has
established four basic management policies and begun efforts for thistransformation and these challenges. Although the impacts of COVID-19
were receding in Japan and overseas, the prolonged situation in Ukraine
and the resulting increase in energy and raw material prices caused prices
to soar and demand to stagnate, and the speed of recovery varied by area
during the year.
As the Company recorded operating losses for two consecutive years
through the fiscal year ended March 31, 2022, one of our most importanttasks was to return to operating income. Due to a recovery of the
movement of people, net sales increased in Japan, Indonesia, and otheroverseas locations, up 16.9% from the previous year to 67,047 million yen.
While operating income was affected by raw material price hikes, wereturned to operating income on a consolidated basis mainly due to theincrease in gross income. As a result, ordinary income and net income
attributable to owners of parent also returned to profit.
Senior Vice President Executive Officer & Director
The basic management policies of MP-13 and major initiatives based on
Yasuaki Kameda
these for the fiscal year ended March 31, 2023 are as follows. For the fiscal
year ending March 31, 2024, following on from the previous year, the Company will reinforce Dedication to Service (Oyakudachi) for
consumers through our products. We will give top priority to value-added products that fulfill consumer wants as well as to high quality
and satisfaction with product effectiveness. As a result, we will manufacture products in accordance with our founding management
philosophy of “high-quality and best-value products” that consumers will be willing to pay more for. In addition, we will take allnecessary steps and do nothing short during this fiscal year to ensure a smooth start for MP-14 in April 2024.

1

Evolve and take on challenges in category strategy for the new normal;
cross-company marketing transformation to improve brand value
Specific initiatives and results
1

Reinforce Dedication to Service (Oyakudachi) for consumers through our products
In an era of diversifying values and style preferences, it has become difficult to grasp consumer wants.
Against this backdrop, we renewed our focus on “Consumer-led Lifestyle Value Creation.” Imagining how
customers would enjoy our products, we made every effort to propose products with concepts and stories that
arouse demand and make customers want to see and use them.
We released “LÚCIDO Perfect Skin Cream EX” for menʼs skin care, “LÚCIDO-L High Damage Repair” series for
womenʼs hair care, and other products which achieve a balance between a new Dedication to Service (Oyakudachi)on the one hand and product effectiveness and cost-performance on the other.

2

Shift product portfolio in Japan market
In recent years, summer season products, which make up an increasing share of sales in Japan, face inherent
challenges such as impact of weather conditions and intensifying market competition.
On the other hand, demand for skin care and hair care products has expanded following the onset of thepandemic.
In the fiscal year ended March 31, 2023, the Company aggressively introduced and enhanced new products
under the GATSBY and LÚCIDO skin care brands for men and the LÚCIDO-L hair treatment brand for women.
In addition, we launched the “GATSBY Meta Rubber” series in the menʼs hair styling category, where the market
is recovering in step with the increased movement of people.

66

Mandom Report 2023

About Mandom

2Complete recovery of Indonesia business in a speedy manner andreform business model of overseas operations
Specific initiatives and results
1Strengthen distribution by collaborating with the local exclusive distributor in thelead-up to the post-COVID-19 period
Value Creation Story

As the impacts of COVID-19 began to recede, we were finally able to collaborate with our exclusive distributor inIndonesia. With the market itself shifting to recovery, we were able to approach distributors in traditional markets,
which is a strength of the exclusive distributor. In the fiscal year ended March 31, 2023, we strengthened sales
promotion focusing on traditional markets and, in turn, expanded sales.
2Strengthen marketing of ACG Internationalʼs “SILKYGIRL” looking ahead to after
the pandemic

3

Materiality

The “SILKYGIRL” makeup products, which anticipated and adapted to changes in consumer wants and mindsets inconjunction with the reopening from the COVID-19 pandemic, contributed to strong results. During the pandemic
when masks were required, we held off on the launch of new products and concentrated on investing in digitalmarketing centered on e-commerce. The products we promoted were mainly eye makeup, which is visible evenwhen masks are worn. After COVID-19 restrictions were lifted, the Company made a complete shift and proactively
launched new products in all categories, including lip, face, and eye, in anticipation of consumersʼ longing for
makeup. Our digitalization efforts since the pandemic also helped in gaining strong support from consumers.

Middle-Range Planning

Shift to a company that creates new value through digitalization andopen innovation
Specific initiatives and results
1

Initiatives to reduce cost●

Performance for the Fiscal Year Ended March 31, 2022

Despite the soaring costs of all energy sources and various raw materials, the consolidated cost-to-sales ratio
declined by 2.0 percentage points to 57.2%, while the cost-to-sales ratio of the Japan segment declined by 1.0
percentage point to 50.4%. Significantly contributing to this result was the expansion of production volume due
to net sales recovery in each segment and the accompanying increase in production efficiency. Furthermore, theprocurement and production divisions are implementing project activities to reduce costs. In Japan, for example,
we achieved a cost reduction of 50 million yen in the “LÚCIDO-L Hair Oil” series by reviewing procurement
and production methods. The Company has also achieved other cost reductions by changing the commercial
distribution system for procurement and reviewing component specifications. At the Fukusaki Factory, we
introduced robots to save labor on the production line, which has led to a reduction in total manufacturing costs.

Initiatives to strengthen the management foundation
Specific initiatives and results

Company Information

Preparing to implement “MHRX,” a strategic HR system to materialize organizational
reform and HR creation
The fiscal year ended March 31, 2023 was a culmination of the preparations for introducing “MHRX,” a new HR
system to create an organization and develop HR capable of change and taking on challenges, aimed at creating
new value for the Group. As part of this initiative, as originally planned, we started a new personnel affair system forcareer development in April 2023 with an all-new ranking, evaluation, and compensation system.

Mandom Report 2023

67