Analyses of Management and Finances
Analysis of Operating Results
During the fiscal year under review, Japanʼs economy showed signsof recovery as the movement restrictions to contain COVID-19 wereeased, and economic and social activities began to return to normal.
On the other hand, raw material prices rose due to the prolonged
situation in Ukraine. Furthermore, the economic outlook remains
uncertain, with concerns that a downturn in overseas economies,
against the backdrop of global monetary tightening and other factors,
could put downward pressure on the domestic economy.
In the economies throughout Asia, our main sphere of overseas
business, East Asia, mainly China, was affected by the movement
restrictions imposed due to the resurgence of COVID-19, while
Southeast Asia as a whole saw an easing of the movement restrictions

and a sustained economic recovery.
Under such economic conditions, the Group is taking measuresaccording to the basic management policies in the Middle-Range
Planning, which is positioned as a period for “Reformation andChallenges” for realizing “VISION 2027.”
As a result, in the fiscal year under review, net sales totaled ¥67,047
million (up 16.9% year on year), operating income totaled ¥1,409
million (operating loss of ¥2,308 million in the previous fiscal year),ordinary income totaled ¥2,207 million (ordinary loss of ¥1,856 million
in the previous fiscal year), and net income attributable to owners ofparent totaled ¥958 million (net loss attributable to owners of parent of¥621 million in the previous fiscal year).

2022(Year ended March 31)

2023(Year ended March 31)(Millions of yen)

(Millions of yen)

Net sales

57,361

67,047

9,685＋16.9

Cost of sales

33,96438,362

4,398

＋13.0

Selling, general and administrative expenses

25,70627,274

1,568＋6.1

Operating income (loss)( 2,308)

1,409

3,718

−

452

798

345＋76.5

Ordinary income (loss)( 1,856)

2,207

4,064

−

Extraordinary income (loss )1,094( 617)( 1,712)−

Income (loss) before income taxes( 762)

1,589

2,351

−

72571

499

＋690.0Net income (loss) attributable to non-controlling interests( 212)

59272−

Net income (loss) attributable to owners of parent( 621)

958

1,580

−

Non-operating income (loss)

Income taxes

ChangeYoY(Millions of yen)(%)

Analysis of Financial Position and Cash Flows
1. Assets, Liabilities and Total Equity
Total current assets were ¥49,573 million as of March 31, 2023, up¥6,705 million from a year earlier. This was mainly due to increases of¥1,968 million in notes and accounts receivable – trade and ¥3,233
million in merchandise and finished goods.
Non-current assets were ¥41,431 million as of March 31, 2023, down
¥1,468 million from a year earlier. This was mainly due to a decrease of¥2,202 million in property, plant and equipment due to depreciation.
Current liabilities were ¥13,786 million as of March 31, 2023, up ¥2,552
million from a year earlier. This was mainly due to increases of ¥444
million in notes and accounts payable - trade, ¥492 million in accounts
payable - other, and ¥994 million in other.
Non-current liabilities were ¥6,034 million as of March 31, 2023, up¥552 million from a year earlier. This was mainly due to an increase of¥337 million in deferred tax liabilities.
Total net assets were ¥71,184 million as of March 31, 2023, up ¥2,132
million from a year earlier. This was mainly due to an increase of ¥1,854
million in foreign currency translation adjustment.
As a result, shareholdersʼ equity ratio was 71.6% as of March 31, 2023
(compared to 73.8% from a year earlier).

2022 (Year ended March 31)
Total assets

2023 (Year ended March 31)
Total assets
91,00585,767

Current
liabilities

Current
liabilities

13,786

11,233Current
assets42,868Non-current
liabilities5,482

Current
assets49,57371,184

69,05142,8996,034

Total equity

Total equity

Non-current
assetsNon-current
liabilities

Non-current
assets41,431(Millions of yen)72

Mandom Report 2023

2. Status of Cash Flows▲

Cash Flows from Operating Activities
Net cash provided by operating activities was ¥4,065 million (comparedto ¥7,693 million provided from a year earlier). It mainly consisted ofincreases resulting from income before income taxes of ¥1,589 million
and depreciation of ¥4,988 million, and a decrease resulting from¥2,943 million increase in inventories.

7,693

4,065▲Cash Flows from Investing Activities
Net cash used in investing activities was ¥1,257 million (compared to¥185 million used from a year earlier). It mainly consisted of a decrease
resulting from purchase of property, plant and equipment of ¥1,200million.

- 2,072
Value Creation Story▲

Cash Flows from Financing Activities
Net cash used in financing activities was ¥2,072 million (comparedto ¥5,385 million used from a year earlier). It mainly consisted of adecrease resulting from dividends paid of ¥1,667 million.

2023(Year ended March 31)
About Mandom

Cash and cash equivalents as of March 31, 2023 came to ¥17,481
million, up ¥1,466 million from the end of the previous fiscal year.
Factors influencing cash flows during the term are as follows.

2022(Year ended March 31)- 1,257- 5,385- 185■ Cash Flows from Operating Activities (Millions of yen)
■ Cash Flows from Investing Activities (Millions of yen)
■ Cash Flows from Financing Activities (Millions of yen)

Capital Policy

1. Financial policy

1) Overview of capital investments
The Group maintains a basic policy of making capital investments infacilities to manufacture products that sustain a competitive advantage.
Total capital investments were ¥1,433 million as of March 31, 2023,
down ¥536 million (27.2%) from a year earlier.
A breakdown by segment is as follows.

Segment name2023 (Millions of yen)

YoY change (%)

606- 54.4

Indonesia

503

7.9

Other overseas

323

88.0

1,433

- 27.2Total

The Company regards the return of profits to shareholders as animportant management issue. While keeping the improvement ofcapital efficiency in mind, we will comprehensively consider a numberof factors, including free cash flow, investment plans, securing liquidity
and economic conditions. We have a basic policy of implementing
stable and continuous returns through dividends (numerical target:
consolidated payout ratio of 40% or more excluding special elements).
We allocate internal reserves to strategic investments aimed atboosting corporate value, including investment in facilities to expand
existing business operations, overseas investment and research anddevelopment investment. Furthermore, we will consider purchasingtreasury shares to implement flexible capital policies based on thechanges in the business environment.
The dividends of surplus for the fiscal year under review were asfollows.
Total amount of dividends

Dividends per share(Millions of yen)

(Yen)

November 2, 2022
Resolution ofthe Board of Directors

854

19.00

June 23, 2023
Resolution ofthe Ordinary General
Meeting of Shareholders

854

19.00

Resolution date

Mandom Report 2023

Company Information

Japan

3. Dividend policy

Performance for the Fiscal Year Ended March 31, 2022

2. Facilities

2) New important facilities
The Group determines its plans for capital investments while
comprehensively taking into consideration investment efficiency andother factors. In principle, each consolidated company separately
determines its capital investment plan. However, the Group makes
adjustments mainly to the reporting companies when determining theplan.
As of March 31, 2023, there were no plans for new important facilities
excluding the new establishment for routine renewal of facilities.

Middle-Range Planning

The Groupʼs financial policy is to maintain a solid balance sheet andappropriate liquid assets for its business activities, and capital is usedprimarily to fund operations and for capital investments, and prioritizes
the use of internal reserves in principle, with any shortfalls covered byloans from financial institutions. If a domestic subsidiary lacks necessary
funds, the shortfall is covered by a loan from the parent company,
while demand for short-term funds from overseas subsidiaries is met
by local-currency-based short-term loans taken out by the Groupʼs main
representative office in the region. The Group regards any additional
funds in hand as cash reserves for business investment, and places
the utmost priority on ensuring their liquidity and security.
We have set commitment lines with financial institutions, and built asystem that can constantly secure funds of over three monthsʼ worth
of monthly sales in order to prepare for unforeseen funding.

Materiality

The Group has two main funding requirements: operation funding requirements and capital investment funding.
The main requirements for operation funding are the supply of raw materials for manufacturing the Groupʼs products, as well as operating expenses
such as manufacturing expenses, and selling, general and administrative expenses. For capital investment funding, the main requirements are thepurchase of non-current assets such as buildings and machinery associated with the acquisition of production facilities.

73