Materiality:
Strengths and initiatives to help

“Expanding Dedication to Service to a diversity of consumers”
About Mandom

We at Mandom aim to be a company that proposes unique and one-of-a-kind products and services not only in Japan and Asia, butalso globally. Dedication to Service has two aspects: “depth” in terms of how much satisfaction can be provided to a single consumer,and “breadth” in terms of how many consumers can be satisfied. We believe that approaching consumers through distributionand communication suited to the times will expand the “breadth” of our Dedication to Service and realize the well-being of moreconsumers, which will lead to Mandomʼs sustainable growth.
We will respond appropriately to changing senses of values and consumption behavior of consumers and maintain an environment inwhich consumers can look and choose the products and services to provide Dedication to Service (Oyakudachi) to a billion people
around the world.

Value Creation Story

Strengths of Mandom 3

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.

Materiality

Later, in 1969, we established a subsidiary in Indonesia via a joint venture. Since then, we have continued to expand our area ofoperations, and today, we have 13 business companies in 11 areas in Asia. Furthermore, we export our products from Indonesia tomore than 90 countries, including in the Middle East and Africa, via Dubai (UAE), which is a global trade hub.

Middle-Range Planning

Since our founding, there has been a spirit of spreading Value for Money at Mandom. In our overseas operations, we target thegeneral 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, regardless of whether we have experience
with such categories in Japan, such as with the Pixy makeup brand in Indonesia.
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.

Performance for the Fiscal Year Ended March 31, 2022

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

South Korea
China
Menʼs cosmetics in Japan and overseas

TaiwanHong Kong

India

Company Information

ThailandPhilippines
Vietnam
Malaysia
Singapore

Indonesia

Traditional trade store (The Philippines)

Mandom Report 202227

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.
Recently, with input from JAXA (Japan Aerospace Exploration Agency), Mandom developed its “Gatsby Space Shower Paper,” which
incorporates Mandomʼs proprietary technology in an alcohol-free body paper suitable for astronautsʼ living environment in space. The
product has been chosen for use on the International Space Station.
ResearchExample

Our own technology delivers a pleasantly refreshing feeling while being alcohol-freeGatsby Space Shower Paper can be found aboard the International
Space Station (ISS). Itʼs our solution to one of the problems astronauts
experience living in space, namely that you “canʼt take a shower toclean up and refresh yourself” due to limited water supplies. Astronauts
living in the zero-gravity environment of space do two hours of physicaltraining daily to help prevent the weakening of muscles. Just wiping thesweat off afterwards doesnʼt provide the refreshing feeling of taking
a shower. Further, the use of “volatile water-soluble components” likeethanol is strictly regulated on the ISS. As these may adversely affect theperformance of space life support systems, while ethanol is commonlyused in regular body paper, we had to undertake the difficult processof formulating an ethanol-free product that still delivered a cool andrefreshing feel.
Applying the Kai-tech technology resulting from Transient Receptor
Potential (TRP) channel* research that Mandom has been conducting
since 2005, we achieved an ethanol-free product thatʼs comfortable touse. The technology not only solves problems of life in space, but also
those of life here on land. We believe it will create new demand and a newmarket as it can be used in environments where alcohol is restricted andby people who donʼt want to put alcohol on their skin.

* Activated by temperature or chemical stimuli, special cell sensors that detect sensation different from five senses. It is one of “the receptors for temperature and touch,” and theresearch won the 2021 Nobel Prize in Physiology or Medicine.

Skin
Mandom has continuously conducted surveys and research
related to the condition of skin in both men and women andhas shown that there are unique conditions for the skin ofeach gender. In particular, we have carried out fully designed
surveys and research on men before anyone else in thecosmetics 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 therelationship between the menstrual cycle and skin condition.

Deodorant/Antiperspirant
Body odor influences oneʼs impression and plays an importantrole in achieving smooth communication. Understanding bodyodor and taking appropriate care is directly linked to improving
quality of life and realizing wellness.
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 oftechnology to limit the function of substances which are thesource of body odor, including sweat.

28

Mandom Report 2022

Research
ExampleConcealer is proven to instantly change the impression of
the skin of middle-aged men by reducing the appearance ofblotches, redness, and dry skinIn a joint study with Assistant Professor Koyo Nakamura and Professor Katsumi
Watanabe of the School of Science and Engineering, Waseda University, it was
found that the makeup effect of concealers tended to reduce the “noticeability ofblemishes,” “noticeability of scars,” and “redness of skin,” as well as the “apparentage.” It was also found to have a stronger effect of reducing the appearance of
blotches close rather than far away, meaningfully improve oneʼs impression ofleadership, and make one appear younger when the face was slightly tilted to theside rather than facing straight forward.

ResearchExample

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

The (Mandom) Joint Research Program in the Laboratory of Advanced Cosmetic
Science at the Graduate School of Pharmaceutical Sciences at Osaka University
produced a new visualization of the detailed structure of human sweat glands andthe blood vessel structure that is the source of sweat production. This image waspublished in the “Skin” part of Chapter 1 of “Grayʼs Anatomy.”
Based on this knowledge, if ideas that solve sweat gland disorders are bornand our understanding of the basic mechanisms of sweat glad contraction andmaintenance of homeostasis are deepened, this will not only help in developmentof the next generation of antiperspirants, but also contribute to medical
developments through the elucidation and treatment of medical conditions related
to sweat, such as heat stroke and hyperhidrosis.

Strengths of Mandom 5

Three manufacturing bases which
support the Group▲

Product supply system comprised of three manufacturing baseswith different missions

About Mandom

Production and Supply System Which Seeks the Spreadof High-Quality and Low-Cost Products*1 Methodology of evaluating and rating the environmental performance of buildings

Fukusaki Factory (Japan)
Production volume: 126 million unitsMateriality

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 “Madein Japan” womenʼs cosmetics, including Bifesta, to Asian countries.
In September 2021, we completed construction of a new production building to meet theexpected supply capacity, including domestic and overseas exports, by the time we reach
VISION 2027, the 100th anniversary of the Companyʼs founding.
Previously, there were some inefficiencies due to the transfer of items among five buildings
between delivery of raw materials and shipping of finished goods. With the new production
facility, each building is connected by a walkway that enables employees and raw materials
to pass indoors throughout, thereby improving efficiency.
In addition, the buildingʼs design is environmentally friendly, aiming to obtain an A
rating under the CASBEE*1 evaluation standard. We are also implementing IoT, AI, androbotization, to help improve accuracy, product quality and efficiency while saving labor.

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 manufacturing bases inJapan, Indonesia, and China in order to provide high-quality, reasonably priced products andservices which fit the changing income levels, wants, and tastes and lifestyle of consumers
in various countries.

Factory 1 (Indonesia)
Production volume: 324 million units

We are taking efforts to construct a system to substitute, provide complementary
production, and conduct shipping in cases when natural disasters or accidents occur atfactories.

Middle-Range Planning

Our Indonesian factory serves as a global production center. It has a container molding
facility and a production structure that allows it to manufacture high-quality, costcompetitive products. The factory primarily supplies ASEAN countries, but its global reachextends to many markets. Our factory in China primarily supplies products to the countryʼsdomestic market and provides additional production for the Group.

Zhongshan Factory (China)
Production volume: 14 million units
Performance for the Fiscal Year Ended March 31, 2022

Note: Production volume based on FY2021
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$ 3,330

US$ 10,350

US$ 58,902*2*2Company Information■ Made in Japan■ Made in Indonesia■ Made in China
Note: Composition excluding
products from othercompanies*2*2 2020 values from the JETRO website
Mandom Report 202229