Materiality:

Strengths and initiatives to help

“Expanding Dedication to Service to a diversity of consumers”
The second aspect of “Dedication to Service (Oyakudachi)” is “breadth” in terms of how many consumers can be satisfied.
As a means of dedicating ourselves to serving as many consumers as possible, we will pursue both “depth” in the form of brand,
About Mandom

communication and categories and “breadth” of distribution and area as we aim to become a global company capable of continuing tocreate strong ties.
At Mandom, we will create new, unique value while keeping an eye on foreseen changes in our market environment and establish
systems through which we can continue to provide that value to consumers through products, communication, and distribution as weaim to “use our ʻOnly Oneʼ strengths to provide Dedication to Service (Oyakudachi) to a billion people around the world.”

Strengths of Mandom 3
Value Creation Story

Overseas Expansion Focused on the Rapidly Growing Asia
The Mandom Group views overseas countries as markets rather than production bases. We have been engaged in overseas businesswith the policy to demonstrate Dedication to Service (Oyakudachi) to local consumers through our products.
Our overseas expansion began with the commencement of operations at Tancho Corporation, our technical tie-up in the Philippines, in 1958.
Later, in 1969, we established a subsidiary in Indonesia via a joint venture.
Since then, we have continued to expand our area of operations, and today, we have 13 business companies in 11 areas in Asia.

Materiality

Furthermore, we export our products from Indonesia to more than 90 countries, including in the Middle East and Africa, via Dubai (UAE),which is a global trade hub.
Since our founding, there has been a spirit of spreading high-quality and best-value products at Mandom. In our overseas operations,
we target the general public in each area. We are engaged in product development with a thorough emphasis on Consumer-led
Lifestyle Value Creation for the consumers in each area, not getting caught up in what products are popular in Japan.
If there is a need or want among consumers, we will boldly take up the challenge to roll out products in various categories, regardlessof whether we have experience with such categories in Japan, such as with the Pixy makeup brand in Indonesia.

Middle-Range Planning

Moreover, lifestyle types, income levels, and preferences about fragrances vary depending on the area. As of now, we have placed
development hubs in Indonesia, China, and South Korea in order to offer products that match the preferences and buying power ofconsumers and have built a distribution network that makes it easy for general public consumers to acquire our goods. Through theseand other efforts, we provide reasonably priced products and services that allow people to enjoy personal styling.

Overseas Business Areas(The Companyʼs overseas operations are reported in two segments: Indonesia
and Overseas Other)

Performance for the Fiscal Year Ended March 31, 2022

South Korea
China

Menʼs cosmetics in Japan and overseas

TaiwanHong Kong

India

The Philippines
Company Information

Thailand

Vietnam
Malaysia
Singapore

Indonesia
Traditional trade store (The Philippines)

Mandom Report 202331

Materiality: “Expanding Dedication to Service to a diversity of consumers”

Strengths of Mandom 4“Unique Research” and “Reliable Technology”
to Respond to Consumer Wants
Conducting unique research to respond to diversifying consumer wants
Mandom Group conducts research and development focused on the three areas of “hair/scalp,” “skin,” and “deodorant/antiperspirant,” an area which has gained significant interest in recent times.
Hair/scalp, skin, and deodorant/antiperspirant vary by individual depending on their race, gender, age, lifestyle, climate, and culture.
Just as each personʼs situation varies, so do their demands as consumers.
In order to respond to as many customer wants as possible, Mandom is proceeding with research and development in a wide range ofareas including the human body structure, function, and mechanisms in order to discover ingredients and apply them to products that
respond to these wants.

Hair/Scalp
As a sector, hair/scalp is considerably affected by the external environment surrounding consumers, such as climate and trends, as well as by consumersʼ own
internal changes such as growing in age.
In order to continue to address the ever-changing, ever-evolving new wants and concerns of consumers, Mandom conducts research and development from theperspective of consumers to develop bold and revolutionary products.
Research
ExampleRealized perm-like hair arrangements by fastening fine crystal “spikes” atop hair

Our “GATSBY Meta Rubber Series” that we launched in February
2023 is a new form of styling product for young men who pursue efficiency
and cost performance at an affordable price point. This series strikes a balance
between setting power and ease of use. Of particular note is “GATSBY bubble/ perm-style creator,” a revolutionary product utilizing foam that can be spread
into hair with ease to arrange even straight hair into perm-like style without
actually getting a perm.
After the foam agent is evenly applied to and spread into the hair, it dries toSkin
Mandom has continuously conducted surveys and research related
to the condition of skin in both men and women and has shown that
there are unique conditions for the skin of each gender. In particular,
we have carried out fully designed surveys and research on men
before anyone else in the cosmetics industry.
We discovered that menʼs skin has attributes different fromthat of womenʼs. In recent years, we have conducted researchand development which consider how skin condition makes the“impression of appearance.” We have also made new discoveries
about women through research focusing on the relationship between
the menstrual cycle and skin condition.

Deodorant/Antiperspirant
Body odor influences oneʼs impression and plays an important rolein achieving smooth communication. Understanding body odor andtaking appropriate care is directly linked to a clean and comfortable
life. Mandom is engaged in research and development to propose
products best suited to various body odors, such as with thediscovery of new body odors like the “middle-aged body odor” which
had not been identified before and the development of technology tolimit the function of substances which are the source of body odor,
including sweat.

32

Mandom Report 2023

ResearchExample

form crystals called “spikes” that attach themselves to the hair as a whole.
This gives hair adhesion and manifests a function through which hair strongly
pulls at each other. This makes it possible to bundle hair in the threedimensional curls that define perm hairstyles.
Some people are averse to perm treatments due to factors such as damage tothe hair and scalp, the risk of a perm that does not come out right, and cost.
We at Mandom believe that the technology in this product makes it possible tocasually enjoy a perm-like hairstyle, thereby offering new value to consumers.

Concealer is proven to instantly change the impression of theskin of middle-aged men by reducing the appearance of blotches,
redness, and dry skinIn a joint study with Assistant Professor Koyo Nakamura and Professor Katsumi Watanabeof the School of Science and Engineering, Waseda University, it was found that themakeup effect of concealers tended to reduce the “noticeability of blemishes,” “noticeabilityof scars,” and “redness of skin,” as well as the “apparent age.” It was also found to havea stronger effect of reducing the appearance of blotches close rather than far away,meaningfully improve oneʼs impression of leadership, and make one appear younger when
the face was slightly tilted to the side rather than facing straight forward.

ResearchExample

3D structure of sweat gland published in “Grayʼs Anatomy,” thecommon anatomy textbook used worldwide

The (Mandom) Joint Research Program in the Laboratory of Advanced Cosmetic Scienceat the Graduate School of Pharmaceutical Sciences at Osaka University produced a newvisualization of the detailed structure of human sweat glands and the blood vessel structurethat is the source of sweat production. This image was published in the “Skin” part ofChapter 1 of “Grayʼs Anatomy.”
Based on this knowledge, if ideas that solve sweat gland disorders are born and ourunderstanding of the basic mechanisms of sweat glad contraction and maintenance of
homeostasis are deepened, this will not only help in development of the next generation ofantiperspirants, but also contribute to medical developments through the elucidation andtreatment of medical conditions related to sweat, such as heat stroke and hyperhidrosis.

Strengths of Mandom 5

Product supply system comprised of three manufacturingbases with different missions

About Mandom

Production and Supply System Which Seeks theSpread of High-Quality and Best-Value Products▲

Three manufacturing bases which
support the Group

Value Creation Story

Mandom Group reinforces the concept of products through Consumer-led Lifestyle
Value Creation in each Asian country we operate. Mandom has three manufacturingbases in Japan, Indonesia, and China in order to provide high-quality, reasonably
priced products and services which fit the changing income levels, wants, and tastes
and lifestyle of consumers in various countries.
Fukusaki Factory in Japan takes the lead of the Group as an innovation center withtechnological and production functions. It is the supply base to provide high quality“Made in Japan” womenʼs cosmetics, including Bifesta, to Asian countries.
Starting in February 2019, we carried out the construction of a new productionbuilding to meet the expected supply capacity, including domestic and overseas
exports, by the time we reach VISION2027, the 100th anniversary of the Companyʼsfounding.
Previously, there were some inefficiencies due to the transfer of items among fivebuildings between delivery of raw materials and shipping of finished goods. Withthe new production facility, each building is connected by a walkway that enables
employees and raw materials to pass indoors throughout, which has improved
efficiency. We made the buildingʼs design environmentally friendly, aiming to obtainan A rating under the CASBEE *1 evaluation standard. We are also implementing IoT,
AI, and robotization, to help improve accuracy, product quality and efficiency whilesaving labor.
The new production building has been in operation since November 2021.

Fukusaki Factory (Japan)
Production volume: 144 million units

Materiality

Factory 1 (Indonesia)
Production volume: 409 million units

Our Indonesian factory, which serves as a global production center, has a production
structure that allows it to manufacture high-quality, cost-competitive products. Thefactory primarily supplies ASEAN countries, but its global reach extends to manymarkets. Our factory in China primarily supplies products to the countryʼs domestic
market and provides additional production for the Group.

Middle-Range Planning*1 CASBEE (Comprehensive Assessment System for Built Environment Efficiency): Methodology of evaluating
and rating the environmental performance of buildings

Zhongshan Factory (China)
Production volume: 14 million units

We are also taking efforts to construct a system to substitute, provide
complementary production, and conduct shipping in cases when natural disasters oraccidents occur at factories.

Performance for the Fiscal Year Ended March 31, 2022

Note: Production volume based on FY2022
performance

Product supply system which fits various GDP levels and local requirements
Group companies in each country sell products with their own unique product mix; importing products from Japan, Indonesia, andsome from China, tailored to the GDP levels of the countries, consumersʼ income levels, and lifestyles.
In each country, products produced in Japan are in a higher price zone, while products produced in Indonesia are in a more reasonable
price zone and products produced in China are between those two zones. This makes it possible to arrange the best product mix foreach country.

Comparison of net sales by manufacturing center

The Philippines

Malaysia

Singapore

Per capita nominal GDP

Per capita nominal GDP

Per capita nominal GDP

US$ 3,572

US$ 11,425

US$ 72,795*2*2Company Information■ Made in Japan■ Made in Indonesia■ Made in China
Note: Composition excluding
products from othercompanies*2*2 2021 values from the JETRO website
Mandom Report 202333