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 segment andinvest aggressively to expand our womenʼs segment.

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
Overseas

Japan

Overseas

Breakthrough inspired by
future-orientation

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 wellness
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.20

56

Mandom Report 2022●●

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

●
●

●

●
●

●
●

●

●
●
●

●
●

Response(Basic Management Policies)

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)

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

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

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 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. Speedy completion of business recovery in Indonesia
and reform business model of overseas operations

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

Company Information●

Period of transformation and challenges to achieve “VISION2027”

Performance for the Fiscal Year Ended March 31, 2022●

MP-14 Accelerated Growth

Middle-Range Planning●

MP-13 Reformation and Challenges

Materiality

●

Pre-

MP-13

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

Mandom Report 2022

57

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 therollout of products centered on skincare
products, with the product lineups
catered for the markets in each country
where the operation of business is inplace.

●

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 has a future
growth prospect.

Numerical Targets(Targets)(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●

Speed up the development of
womenʼs cosmetics business●

1 Develop a category of becoming arobust pillar

2 Increase brand value●

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

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

Promotion of category strategies andthorough enhancement of brand value

to Service (Oyakudachi) for middleincome class

2 Asian countries other than Indonesia:

Promote marketing measures uniqueto each country by understanding
consumersʼ 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)Consolidated Net Sales¥66,000 million
or more¥68,200 million¥83,000 million¥77,300 million¥90,000 million¥81,700 millionMenʼs Grooming
Business Average Annual
Growth Rate

3.2% or more

5.4%

5.2% or more

2.6%

3.0% or more

-0.6%

“Gatsby” Brand Average
Annual Growth Rate

3.6% or more

5.9%

Womenʼs Cosmetics Business
Average Annual Growth Rate

19.3% or more

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%

Note: Womenʼs business in MP-12

Consolidated Overseas
Net Sales Average
Annual Growth Rate
Consolidated Operating
Profit Margin

Note: Operating profit 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 Year

58

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

Mandom Report 2022

・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 profit 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 profit 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 profit
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
policyAbout 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 brand (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 world
2

2. Speedy completion of Indonesia business recovery and reform businessmodel of overseas business
1
2

Materiality

Quickly build structure to solve the issues in Indonesian 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 glooming 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

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

CAGR

10.7%

Consolidated Operating
Profit Margin

8.0% or higher

Consolidated ROIC

ROIC = NOPLAT + gain/loss from equity-method
7.0% or higher (investments/invested
capital )Overseas
Business

Performance for the Fiscal Year Ended March 31, 2022

Profitability

Consolidated Net
Sales

*1

*2

*1 (Operating profit + 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 2022

59

Middle-Range Planning

Look Back on the Fiscal Year Ended March 31, 2022
Looking back on the fiscal year ended March 31, 2022
The fiscal year ended March 31, 2022 was the first year of theResults continued to be greatly affected by the COVID-19

13th Middle-Range Planning (hereinafter “MP-13”). MP-13 waspandemic in Japan and overseas. In particular, mainstay hairpositioned as a period of transformation and challenges tostyling products and cleansing products were impacted byachieve “VISION2027” for the 100th anniversary of thefewer opportunities to go out amidst restrictions placed on

founding of the Company. During this period, the Company

going outside. Also, summer products saw much lower sales

established four basic management policies and began efforts

due to unseasonable weather during the peak demand season.

for this transformation and these challenges. The number of

As a result, net sales fell 9.4% (down 4.4% if applying the newcases of COVID-19 continues to rise and fall repeatedly instandards for revenue recognition that were adopted this year

Japan and overseas. However, the Company began new

to the previous fiscal year) to 57,361 million yen. Operating

marketing efforts different from mass marketing in Japan as

profit and other items booked losses for the fiscal year.

we took on challenges for new changes as a company.

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

Initiative for new marketing: Launch of “gatsby THE DESIGNER”
The Company took on the challenge of an approach to consumers that varies from mass distribution.
We aim to capture male users who proactively try products and gather information related to cosmetics, anissue for the existing Gatsby Series. In October 2021, we launched a fresh and adaptable menʼs cosmetic series
that allows users to express themselves as they want through a lineup of skin care, makeup, and hair styling
products.

2

Details ➡ P.24

Shift product portfolio in Japan market
Through the COVID-19 pandemic, consumer lifestyles have changed, resulting in lower sales for hair styling andmakeup products, areas of strength for the Company. Meanwhile, sales for skin care, body care, and hair careproducts have been solid.
We have begun to strengthen categories that can be expected to grow even in a world with COVID-19.
For example, in the case of menʼs cosmetics, we are proposing products that focus on the face and body categories
for new spring and summer products released in February 2022.

2

Speedy completion of Indonesia business recovery and reformbusiness model of overseas businessSpecific initiatives and results

Strengthen e-commerce channels overseas
Sales in the “Other overseas” segment in each country has risen steadily. Before the previous fiscal year, we completed
establishing official brand e-commerce shops in each country, allowing us to develop and execute brand communication
as we wish. The net sales growth rate of e-commerce channels in “Other overseas” exceeded 50%. With the sales mix
having surpassed 10%, the EC channel is growing into the second largest channel in scope, next only to drug stores.

60

Mandom Report 2022

About Mandom

The basic management policies of MP-13 and major initiatives
based on these are as follows.
For the fiscal year ending March 31, 2023, the Company hasplanned a second round of initiatives for new marketing efforts
and has developed several new initiatives, such as sales of“CYQ,” the makeup brand that allows generation Z youth in

Asia to be who they want to be. The Company will execute on
Value Creation Story

the MP-13 themes of “transformation and challenges” to breakout of our past business model, respond to changes in thelifestyles of our customers, and achieve proactive change.
Senior Vice President Executive Officer & Director

Yasuaki Kameda

3

Materiality

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

Promotion of digital transformationof training, and (3) Digital training for all employees aimed at fostering a corporate culture.
2

Middle-Range Planning

In addition to realizing our vision in “VISION2027,” we feel that we need to increase productivity per unit beyond
the current levels. In the three years that include the “Pre-MP-13” fiscal year ended March 31, 2021, the Company
will generate management resources by promoting digital transformation as we aim to secure and establish a newcompetitive advantage by investing those management resources into new value creation. In the previous fiscal
year, the company primarily engaged in three initiatives: (1) Sharing between departments and improving operations
and efficiency of each department through digital tools, (2) Selection of next-generation digital leaders and beginning
Details ➡ P.62

Initiatives to reduce cost◎

Performance for the Fiscal Year Ended March 31, 2022

The Company made efforts to reduce fixed costs and save labor through the utilization of manufacturing robots anddigital equipment in order to mitigate the effects of increased depreciation costs from large-scale investments in the
Fukusaki Factory and increases in fixed expenses from lower manufacturing volume due to lower sales. In addition,
as raw material expenses and transportation expenses have become inflated recently, the Company establishedthe “Cost Down Project” in April to proceed with cost reduction activities quickly and deeper through a system that
integrates production, technology development, and marketing as we strive for further cost reduction.

Initiatives to strengthen the management foundation
Specific initiatives and results

Company Information

Preparing to transition to the HR system reform “MHRX” to provide Dedication
to Service (Oyakudachi) for consumers in response to a changing society
The Company decided to transition to the HR system “MHRX” that originated from Mandom-style jobs and autonomy
in order to continue to provide Dedication to Service for consumers stated in our vision through new value propositions
and respond accurately to drastic changes in society. The Company is now proceeding carefully, beginning with internalbriefings and small group discussions, in order to begin the full transition from FY 2023. Details ➡ P.32

Mandom Report 2022

61

Middle-Range Planning

Middle-Range Planning Topics〈 Feature 〉Promotion of Digital Transformation

MP-13
basic management
policy3. Shift to become a company that creates new value
through digitalization and open innovation
1

Achieve success in DX (digital transformation) resulting
in the realization of wellness

Transition to a company that produces new value throughdigital transformation
DX objectives

Dramatically expand both the quality and quantity of Dedication to Service bysimultaneously proceeding with initiatives for new businesses and improving
efficiency of existing businesses through a digital foundation

Image of cross-company DX promotion
The Company established the DX Promotion Committee in May 2021 to focus on these efforts.
The Company plans two steps related to DX promotion.
In Step 1, the Company will proceed with operation and efficiency improvements by promoting digitaltransformation of the Company by this fiscal year (ending March 31, 2023) to generate management
resources, such as time and people, etc.
At the same time, we will begin Step 2, propose themes and businesses to generate new value, andinvest management resources generated in Step 1 into actual creation activities.

Step 1“Generate management resources to take on challenges to generate new value”

Step 2“Invest generated management resources and take on challenges for new value creation”

Pre-MP-13

MP-13

2020

2021

2022

Step 1“Transformation by the Digitalization”

Pre-Step 2

62

Mandom Report 2022

2023

Step 1Develop digitalstructure

Step 2“Take on challenges for new value creation”

New
value
creation

Activities related to

About Mandom

Details of major initiatives in the fiscal year ended March 31, 2022
Step 1“Generate management resources totake on challenges to generate new value”
1. “OSHIGOTO DIGITALIZE”

BPR

Mandom promoted “OSHIGOTO DIGITALIZE” (“Work Digitalization”) as part ofinitiatives specifically for digital transformation to generate management resources.
Young employees took a central role as thought leaders for operations improvement.
They shared information on initiatives, primarily at monthly working groups, for thehorizontal deployment of initiatives across other departments while also aiming to
improve operations and efficiency in their own departments.

Value Creation Story〈Operations innovation〉

RPA〈Operations innovation〉

OSHIGOTO
DIGITALIZE〈Operations improvement〉

2. Promotion of utilization of RPA (Robotic Process Automation)
The Company automated regular operations and proactively promoted activities of
the RPA Promotion Team in order to generate management resources by improving

Materiality

efficiency of daily routine work and reducing time spent.
Also, this team received an internal award for greatly contributing to operations in
FY2021.

3. Promotion of cross-company BPR (Business Process Re-engineering)
The objective of BPR is to (1) “Reduce total labor hours across the company” and(2) “Generate time for initiatives for new value creation.”
In FY2022, the Company established BPR as the production indicator required of all
productivity per unit across the company.

Activities related to

Middle-Range Planningdomestic departments under department business plans as an initiative to improve
RPA Promotion Team awarded for contributions to operations

Step 2

Performance for the Fiscal Year Ended March 31, 2022

“Invest generated management resources
and take on challenges for new value creation”
1. Begin selection and training of next-generation digital leaders
In order to train human resources who develop knowledge as digital humanresources and are capable of taking the lead in new value creation utilizing digitaltechnology, we selected multiple human resources from each domain in Japan withthe aptitude to lead the next generation. We have already begun workshops, etc.,
and training for the selected members. First, we have them acquire digital technology
in each domain and field the business skills contributing to transformation.

Next-generation digital leader training

2. Digital education for all employees that fosters company culture
Company Information

The Company implemented e-learning for approximately 750 full-time and temporary employees both in and outside of Japanto deepen understanding of the background and objective of DX promotion as well as an overview of digital technology.
The Company plans to continue its training to improve digital literacy in the current fiscal year (ending March 31, 2023).
Following the digital leaders, the Company plans to select and train leader candidates and increase the number of employees
capable of co-creation with digital human resources in and outside the Company.

Mandom Report 2022

63