Results Briefing for
Fiscal Year Ended Jan. 31, 2019
March 5, 2019（Securities Code：7956）
President & COO

Shigeru YamashitaTitle, Contents

1-2

Results for Term Ended Jan.2019

3 - 17

Forecasts for Term Ending Dec.2019

18 - 31

Approach to Enhance Corporate Value

32 - 36

Results for Term
Ended Jan. 31, 2019

Financial Highlights (Consolidated)
Jan. 2018(millions of yen)

Results

Jan. 2019

YoY Change

Plan

Resultsvs PlanYoY Change

Net Sales

102,563108.4%

107,000

104,74797.9%

102.1%

Operating Income

19,412

121.2%

20,40019,61296.1%

101.0%

Ordinary Income

20,129122.3%

20,40020,39899.9%

101.3%Net Income Attributableto Owners of Parent

14,515130.5%

14,100

14,238101.0%

98.1%

Net Assets

62,812116.9%

68,64866,58297.0%

106.0%

Total Assets

84,467107.1%

90,99686,00694.5%

101.8%EPS（¥）

121.20130.6%

117.73118.89101.0%

98.1%

BPS（¥）

506.79115.9%

554.68536.4396.7%

105.8%

ROE*

25.7％

―

22.2%

22.8%

―

―

ROIC*

22.2％

―

21.7%

21.2%

―

―

*ROE = Net income ÷ Equity (in both cases, denominators are averaged between beginning and year-end figures)*ROIC: Return On Invested Capital (NOPAT/Capital Invested, calculated with a tax rate of 30%, Capital Invested is averaged between beginning and year-end figures)

Statements of Income (Consolidated)
Jan. 2018(millions of yen)

Results

Jan. 2019% of Total

Results% of Total

YoY Change

Remarks

Net Sales

102,563100.0%

104,747

100.0%

102.1%

Cost of Sales

51,99050.7%

50,889

48.6%

97.9%

Gross Profit

50,572

49.3%

53,85851.4%

106.5% ■Main changes in SG&A
expenses

SG&A Expenses

31,15930.4%

34,24632.7%

109.9%

Operating Income

19,412

18.9%

19,61218.7%

101.0%

Non-Operating
Income (Expenses)

716

0.7%

786

0.8%

109.9%

Ordinary Income

20,12919.6%

20,39819.5%

101.3%

Extraordinary
Income (Loss)

787

0.8%

(136)

(0.2%)

―

244

0.2%

356

0.3%

145.8%

14,51514.2%

14,238

13.6%

98.1%

Net Income
Attributable to Noncontrolling Interests
Net Income
Attributable to Ownersof Parent

Personal expenses:+ 969M JPY
Market research expense:+ 495M JPY
Shipment/distribution expense:+ 316M JPY
Advertising expense:+ 171M JPY

Net Sales by Business Segment (Consolidated)
Jan. 2018（Ref.）(millions of yen)
Consolidated

Results% of Total

Gross
MarginJan. 2019
Segment
ProfitResults

% of
Total

YoY
ChangeGross
MarginSegment
ProfitYoY
Change102,563100.0%

49.3%

19,412

104,747

100.0%

102.1%

51.4%

19,612101.0%

33,841

33.0%

48.9%

5,928

35,59334.0%

105.2%

48.6%

6,096

102.8%

7,541

7.4%

10.4%

218

4,472

4.3%

59.3%

14.0%

169

77.3%

7,058

6.9%

31.3%

468

6,986

6.7%

99.0%

32.4%

353

75.5%

China Business

34,305

33.4%

55.2%

11,51435,58134.0%

103.7%

56.0%

11,972104.0%

Singapore Business

10,286

10.0%

47.4%

2,488

12,13311.6%

118.0%

49.3%

2,744

110.3%

Lansinoh Business

12,523

12.2%

56.3%

1,553

12,75312.2%

101.8%

59.5%

1,576

101.5%

Elimination of internal
trading between segments(4,284)(4.2%)－－(4,176)(4.0%)

－

－

－

－

Other

1,289

1.3%

12.8%

1,402

1.3%

108.8%

13.1%

net sales
Domestic Baby andMother Care BusinessChild Care Service
Business
Health and Elder Care
Business

126

142

112.8%*Starting from the current fiscal year, non-allocable operating expenses associated with the R&D Department, which had previously been included in the Adjustments section, have been reflected insegment profit of each reportable segment. Accordingly, the figures for the same period of the previous year have been adjusted in accordance with the calculation method after the above revision.
*Segment profit on a consolidated basis has been adjusted (by deducting non-allocable operating expenses) to be equal to operating income in the consolidated statement of income.
*Consolidated net sales have been presented after eliminating intersegment transactions of the Overseas Business and the China Business.

Overseas Business Sales by Region
China (including HK)

Other Asian Counties

North America

EuropeNear and Middle East

Other Regions

Local currency basis: 103.9％
2,285
Jan. 19

9,052

33,32056,292

7,715
2,845

1,072

Local currency basis: 96.8％
2,019
Jan. 18

31,902

7,215

52,828

8,109
2,666

0

10,00020,000* [Currency rates] Jan 19 US$1 = ¥110.43

30,000

1 yuan = ¥16.70;

40,000Jan 2018: US$1 = ¥112.16

917

50,000
1 yuan = ¥16.62

Key Priorities for FY Jan. 2019Domestic Baby and Mother Care Business Consistently strengthening six key product categories
・ Implementing comprehensive measures against competing products
to sustain the present high market share in the nursing bottle/nipple
category
・Implementing measures and making necessary investments to sustain
Opened the website for healthcare professionals
the present high market share in the breast pump category Implementing aggressive sales, marketing and investing activities to increase
the market share of the baby strollers and other large-sized products (market share target for 6th MTBP: 25%)
 Getting more involved in promotional activities to achieve collaboration with healthcare professionals

Child Care Service Business Clarify the positioning of business and streamlining business operations leading to improved profitability
 Secure quality of child-rearing service by improving employee’s compensation andby securing and training child-rearing staff
 Further strengthening safety measures including reinforcement of crisis management



Health and Elder Care Business Achieving growth by streamlining and strengthening the sales and distribution network
 Developing concepts and ideas of products to support the in-house care through working withprofessionals at care facilities
 Improving profitability by more efficient business system

Key Priorities for FY Jan. 2019Singapore, Lansinoh and China Businesses (common issues)
 Consistently reinforcing six key product categories primarily through:・Further increasing our share in the nursing bottles/nipples category, and・Implementing measures to expand the breast pump category.

Singapore Business Strengthening merchandizing targeted for the middle-class consumers.
 Expanding the business in India and improving profitability by increasing the capacity
utilization ratio.
 Improving production efficiency in Indonesia and preparing for production of new
products.
 Exploring feasibility of entering new markets including countries in Africa to achieve
growth for the next MTBP period and onwards
Lansinoh Business Aggressively expanding business with improved profitability in priority countries(particularly in Europe).
 Strengthening initiatives to develop new sales channels (i.e., EC and DME channels).
 Expanding sales at real stores of Lansinoh China.

China Business Sustaining the high growth rate by taking advantage of the expansion ofpurchasing population
 Rebuilding the sales/distribution system in response to developments in EC channels
 Ensuring growth of the disposable diaper categories<China> Exhibition<China>2018 New Products

Domestic Baby & Mother Care Business Status

Large-sized products

New products

Released premium single-tire baby stroller "Fino Polish Grey."
Improved our share in the baby stroller market to an annual average of 20.9% (Feb. 2018 – Jan. 2019).

Completely redesigned "Bonyu Assist®" breast pump series, equipped with the "Baby Rhythm"
technology created through more than 60 years of baby nursing research.
Released "Pigeon Electric Baby Nasal Aspirator," developed jointly with otolaryngologists.

Direct communications
Seminars for healthcare professionals: 17 events/approx. 1,500 participants
Seminars for expectant mothers: 14 events/approx.1,300 participantsMarket Share (FY Jan/2019)
79%
62%
No.1

NursingbottlesNo.1

Major new products released in Spring 2019

71%
No.1

37%

33%

No.1

No.2

Breast pumps Breast pads Baby skincare Bottom wipes(washing type)* According to POS Nationwide Drugstore Growth Estimates, INTAGE Inc.
* Value share for nursing bottles, breast pumps and breast pads. Quantity share for the other products.

"Leaves of Peach" Skincare"Medicated wet wipes for heat rash" "UV baby lotion""Bonyu Jikkan® Coating"New "fruits" design

Child Care Service Business /Health & Elder Care Business Status
Child Care Service Business

Pigeon HeartsNew additions to facilities under management: Launched five in-company childcare facilities(excluding those of the National Hospital Organization)→

Total of 56 facilities

Heath & Elder Care Business

Pigeon Tahira






Showcased new products at the International Home Care & Rehabilitation Exhibition held in October 2018.
Released "Sitting Posture Assisting Wheelchair" and "Nursing Care Table" from the new "Profit Care" series.
Released "Hygiene Care" series, created based on experience and expertise in the nursing care segment, in February 2019.

Pigeon Manaka

In-Home Care Support and Day Service Center in Sano has continued to grow steadily.

"Profit Care" series"Hygiene Care" series, created based on experienceand expertise in the nursing care segment

A scene at childcare facilities

China Business Status


Product sales

Released 70 SKUs of new products in 2018
・Among others, "Leaves of Peach" series products (bottom wipes and baby bath wash) sold well.

Strengthened sales through EC channels and at flagship stores (with a 114% YoY increase in sales).
Expanded the share of nursing bottles and nipples in overall EC sales to nearly 30%.

Branding and breastfeeding awareness programs

Further strengthened branding activities.
Strengthened online sales activities by utilizing SNS and other digital marketing tools.
Promoted direct communications with customers through seminars and other opportunities.
"Leaves of Peach" series
new product launch event

Storefronts

Strengthened digital marketing
utilizing digital camera
applications

New products eventSingapore Business Status


Status by market
Singapore: Gained and maintained the No.1 market share in nursing bottles.
Reported strong sales through EC channels.
Strengthened digital marketing to enhance communications with customers.

Malaysia:
Continued to report strong sales of nursing bottles and nipples.
Promoted brands by enhancing communications with customers through events and SNS.

India:
Achieved coverage of 50,000+ pharmacies.
Indonesia: Reported strong production and sales with both domestic and export products.
Further strengthening marketing in Indonesia.

Singapore

Indonesia

Shopfront in each country

Held an event, participated by guests including key
opinion leaders and expectant and new mothers(Malaysia)

Breastfeeding seminar(Indonesia)

Lansinoh Business Status


Status by market
 North America:

Increased sales of electric breast pumps through new routes, including DME(Durable Medical Equipment) channels.
Continued to gain top share in categories: nipple care cream and breast pad.
 Europe:
Expanded sales in France and Germany.
Reported a high capacity utilization ratio at the factory in Turkey.
Strengthened product development.
 Lansinoh Shanghai: Continued to strengthen sales through EC channels.
Branding and breastfeeding awareness programs Implemented digital campaigns to reinforce brand penetration.

Breastmilk Collector

Market Share in US (Jan. 2019)
74.6%
54.8%
43.7%
No.1

乳首クリームNipple
cream

30.5%
No.1

母乳パッド
Breast
pads

No.2

No.2

Breast milk
母乳保存バッグ

Breastpumps
さく乳器（手動）(manual)storage bags

Lansinoh China

Washable Nursing Pads

<Ref.>Consolidated Balance Sheet (Highlights)
Jan. 2018

Jan. 2019(millions of yen)

Results

YoY Change(Amount)

Results

YoY Change(%)

Cash and Deposits

31,34630,949

(397)

98.7%

Notes and Accounts
Receivable

16,44015,004(1,436)

91.3%

Inventories

8,713

10,605+1,891121.7%

Notes and Accounts
Payable

5,194

4,567

(627)

87.9%

Electronically Recorded
Obligations – Operating

1,797

1,960

+163

109.1%

Borrowings

0

0

-

-

Net Assets

62,812

66,582+3,770106.0%

Total Assets

84,46786,006+1,539101.8%

Equity Ratio

71.9%

74.7%

－

+2.8pt＜Ref.＞Consolidated Cash Flow
（Million JPY）
17,094(3,586)
13,632(12,812)(4,704)(8,338)Acquisition of PPE＆IA ¥(5,391m)（LY ¥(3,254m)）

31,34630,052

31,346(986)

599

30,949Loan income/repayments： ¥0m（LY¥(5,673m))
Income before income taxes：¥20,262m（LY: ¥20,916m)

Payment of cash dividends:¥(8,260m)（LY ¥(7,066m)）

Jan. 2018

Jan. 2019

Balance atBiginnig

Operating
Activities

Investing
Activities

Financing
Activities

Translation
Adjustm ent

Balance atEnd

Balance atBiginnig

Operating
Activities

Investing
Activities

Financing
Activities

Translation
Adjustm ent

Balance at
End

30,052

17,094(3,586)(12,812)599

31,346

31,346

13,632(4,704)(8,338)(986)

30,949

<Ref.>Investment-Related Indicators (Consolidated)

Jan. 2018

Jan. 2019（millions of yen）

Interim(Results)

*1
*2
*3

Full Year(Results)

Interim(Results)

Full Year(Forecast)

Capital Investment (*1)

1,252

3,546

2,795

5,376

Depreciation (*2)

1,206

2,451

1,383

2,804

Research and Development (*3)

1,221

2,670

1,479

3,119

Property, plant and equipment and intangible assets (including long-term prepaid expense)
Depreciation (including amortization of goodwill)
Total amount of expenses incurred for research and development activities including personnel expenses

Forecasts for Term Ending Dec. 2019

The Accounting Period Revision (Final Day of the Fiscal Year)As part of efforts to promote global business management, the Company is working to achieve furthertransparency through timely and precise disclosure of management information.
In addition, the International Financial Reporting Standards (IFRS) which are being considered for future
implementation require consistent accounting periods for all consolidated companies. For these reasons, theaccounting period is being changed as follows:
Year
Month

2018
1

2

3

4

5

6

7

2019
8

9

10 11 12

1

2

3

4

5

6

7

8

9

10 11 12Company closing in January
Pigeon Corporation
and Japan Domestic Subsidiaries
Company closing in December
Oversea Subsidiaries

Quarter
Fiscal year-end

1Q

2Q

3Q

Jan. 2019 (62nd)

４Q

1Q

２Q

3Q

４Q

Dec. 2019 (63rd)【Measures for the transitional period (current period)】・Pigeon Corporation and its subsidiaries in Japan: 11 months from Feb. 1, 2019 to Dec. 31, 2019
・Overseas Affiliates: 12-month period from January 1, 2019 to December 31, 2019 (as usual)・For purposes of preparing the consolidated financial statements, the 63rd term of Pigeon Corporation and its subsidiaries in Japanconsists of the same first three quarters as in the past and the two-month 4th quarter (from November 1 to December 31, 2019).

<Ref.> Dec. 2019 Plan（consolidated）【Planned rate】(millions of yen)Jan. 2019
Result% of Total

Jan. 2020 Mid-term

Dec. 2019 Plan（12 months Japan）

6th MTPPlan% of Total% of Total YoY Change vs 6th MTPNet Sales

104,747

100.0%

110,000

100.0%

110,000

100.0%

105.0%

100.0%

Cost of Sales

50,88948.6%

55,00050.0%52,80048.0%

103.8%

96.0%

Gross Profit

53,85851.4%

55,00050.0%

57,20052.0%

106.2%

104.0%

SG&A Expenses

34,24632.7%

35,00031.8%

36,80033.5%

107.5%

105.1%

Operating Income

19,61218.7%

20,00018.2%

20,40018.5%

104.0%

102.0%

786

0.8%

0

0.0%

0

0.0%

0.0%

-

Ordinary Income

20,39819.5%

20,00018.2%

20,40018.5%

100.0%

102.0%

Extraordinary Income(Loss)(136)(0.2%)

0

0.0%

100

0.1%

-

-

356

0.3%

190

0.2%

345

0.3%

96.8%

181.6%

14,23813.6%

13,80012.5%

14,50013.2%

101.8%

105.1%

Non-Operating Income(Expenses)

Net Income
Attributable to Noncontrolling Interests
Net Income
Attributable to Ownersof Parent※Planned rate for this term US$1=¥109.00 1 yuan=¥16.00（12 months assumed for both of Domestic and Overseas）

<Ref.> Dec. 2019 Plan（consolidated）【excluding currency rate impact (same as actual rate of previous year)】(millions of yen)Jan. 2019
Result% of Total

Jan. 2020 Mid-term

Dec. 2019 Plan（12 months Japan）

6th MTPPlan% of Total% of Total YoY Change vs 6th MTPNet Sales

104,747

100.0%

110,000

100.0%

111,900

100.0%

106.8%

101.7%

Cost of Sales

50,88948.6%

55,00050.0%53,60047.9%

105.3%

97.5%

Gross Profit

53,85851.4%

55,00050.0%58,30052.1%

108.2%

106.0%

SG&A Expenses

34,24632.7%

35,00031.8%

37,30033.3%

108.9%

106.6%

Operating Income

19,61218.7%

20,00018.2%

21,00018.8%

107.1%

105.0%

786

0.8%

0

0.0%

0

0.0%

0.0%

-

Ordinary Income

20,39819.5%

20,00018.2%

21,00018.8%

102.9%

105.0%

Extraordinary Income(Loss)(136)(0.2%)

0

0.0%

100

0.1%

-

-

356

0.3%

190

0.2%

360

0.3%

101.0%

189.5%

14,23813.6%

13,80012.5%

15,00013.4%

105.3%

108.7%

Non-Operating Income(Expenses)

Net Income
Attributable to Noncontrolling Interests
Net Income
Attributable to Ownersof Parent※ Assumed the same as the previous rate （US$=¥110.43 1yuen=¥16.70) (12 months assumed for both of Domestic and Overseas)Dec. 2019 Plan（consolidated）【Planned rate and change fiscal year end】
Jan. 2019(millions of yen)

Result% of Total

Jan. 2020 Mid-term

Dec. 2019 Plan（11months Japan）

6th MTPPlan% of Total% of Total YoY Change vs 6th MTPNet Sales

104,747

100.0%

110,000

100.0%

106,200

100.0%--

Cost of Sales

50,88948.6%

55,00050.0%50,900

47.9%

-

-

Gross Profit

53,85851.4%

55,00050.0%55,300

52.1%

-

-

SG&A Expenses

34,24632.7%

35,00031.8%

35,300

33.2%

-

-

Operating Income

19,61218.7%

20,00018.2%

20,000

18.8%

-

-

786

0.8%

0

0.0%

0

0.0%

-

-

Ordinary Income

20,39819.5%

20,00018.2%

20,000

18.8%

-

-

Extraordinary Income(Loss)(136)(0.2%)

0

0.0%

100

0.1%

-

-

356

0.3%

190

0.2%

345

0.3%

-

-

14,23813.6%

13,80012.5%

14,300

13.5%

-

-

Non-Operating Income(Expenses)

Net Income
Attributable to Noncontrolling Interests
Net Income
Attributable to Ownersof Parent※Planned rate Dec. 2019 US$1=¥109.00 1 yuan = ¥16.00（Domestic 11months・Overseas 12 months）

<Ref.> Dec. 2019 Plan (Consolidated)【Planned rate】(millions of yen)Dec. 2019（12 months Japan）

Jan. 2019
Result% of Total

YoY Change

Plan% of Total

YoY Change

Net Sales

104,747

100.0％

102.1%

110,000

100.0%

105.0%

Operating Income

19,61218.7％

101.0%

20,40018.5%

104.0%

Ordinary Income

20,39819.5％

101.3%

20,40018.5%

100.0%Net Income Attributableto Owners of Parent

14,238

13.6％

98.1%

14,50013.2%

101.8%Net Assets

66,582―106.0%

72,819－109.4%

Total Assets

86,006―101.8%

93,711－109.0%EPS（¥）

118.89―98.1%

121.07－101.8%

BPS（¥）

536.43―105.8%－

109.6%

ROE*

22.8%

―

―

587.66
21.5%

－

－

ROIC*

21.2%

―

―

20.5%

－

－

※【Planned rate Dec.2019】 US$1=¥109.00 1 yuan = ¥16.00←【Actual rate Jan.2019】 US$1=110.43 1 yuan = ¥16.70*ROE = Net income ÷ Equity (in both cases, denominators are averaged between beginning and year-end figures)*ROIC: Return On Invested Capital (NOPAT/Capital Invested, calculated with a tax rate of 30%, Capital Invested is averaged between beginning and year-end figures)

Planned rate and change fiscal year end【Planned rate and change fiscal year end】
(millions of yen)Dec. 2019（11months Japan）

Jan. 2019
Results% of Total

YoY Change

Plan% of Total

YoY Change

Net Sales

104,747

100.0％

102.1%

106,200

100.0%－

Operating Income

19,61218.7％

101.0%

20,00018.8%－

Ordinary Income

20,39819.5％

101.3%

20,00018.8%－

Net Income Attributableto Owners of Parent

14,238

13.6％

98.1%

14,300

13.5%－

Net Assets

66,582―106.0%

72,619－－Total Assets

86,006―101.8%

93,370－－

EPS（¥）

118.89―98.1%

119.40－－

BPS（¥）

536.43―105.8%

585.99

－

－

ROE*

22.8%

―

―

21.3%

－

－

ROIC*

21.2%

―

―

20.1%

－

－

※【Planned rate Dec. 2019】：US$1=¥109.00 1 yuan = ¥16.00 ←【Actual Rate Jan.2019 】 Jan. 2019 US$1=¥110.43 1 yuan =¥16.70*ROE = Net income ÷ Equity (in both cases, denominators are averaged between beginning and year-end figures)*ROIC: Return On Invested Capital (NOPAT/Capital Invested, calculated with a tax rate of 30%, Capital Invested is averaged between beginning and year-end figures)<Ref.> Net Sales by Business Segment (Consolidated)【Planned Exchange Rate】
Jan. 2019(millions of yen)

Results% of Total

Dec. 2019（12 months Japan）

Gross
MarginSegment
Profit

Plan

% of
Total

YoY
ChangeSegment
ProfitGross
MarginConsolidated
net sales

104,747

100.0%

51.4%

19,612110,000

100.0%

105.0％

52.0%

20,400

Domestic Babyand Mother Care
Business

35,593

34.0%

48.6%

6,096

37,36734.0%

105.0%

48.7%

6,362

Child Care Service
Business

4,472

4.3%

14.0%

169

3,609

3.3%

80.7%

14.5%

161

Health and Elder
Care Business

6,986

6.7%

32.4%

353

7,596

6.9%

108.7%

30.5%

447

China Business

35,581

34.0%

56.0%

11,97237,491

34.1%

105.4%

57.4%

12,927Singapore
Business

12,133

11.6%

49.3%

2,744

12,68811.5%

104.6%

48.4%

2,735

Lansinoh Business

12,753

12.2%

59.5%

1,576

13,771

12.5%

108.0%

59.2%

1,973

Elimination of internal
trading between
segments(4,176)(4.0%)－－(4,003)(3.6%)

-

-

-

Other

1,402

1.3%

13.1%

142

1,481

1.3％

105.6%

10.6%

105

<Ref.> Net Sales by Business Segment (Consolidated)【Same rate as previous year】
Jan. 2019(millions of yen)

Results% of Total

Gross
MarginDec. 2019（12 months Japan）
Segment
Profit

Plan

% of
Total

YoY
ChangeSegment
ProfitGross
MarginConsolidated
net sales

104,747

100.0%

51.4%

19,612111,900

100.0%

106.8％

52.1%

21,000

Domestic Babyand Mother Care
Business

35,593

34.0%

48.6%

6,096

37,36733.4%

105.0%

48.7%

6,362

Child Care Service
Business

4,472

4.3%

14.0%

169

3,609

3.2%

80.7%

14.5%

161

Health and Elder
Care Business

6,986

6.7%

32.4%

353

7,596

6.8%

108.7%

30.5%

447

China Business

35,581

34.0%

56.0%

11,972

39,05434.9%

109.8%

57.4%

13,471

Singapore
Business

12,133

11.6%

49.3%

2,744

12,94311.6%

106.7%

48.5%

2,803

Lansinoh Business

12,753

12.2%

59.5%

1,576

13,98312.5%

109.6%

59.2%

2,007

Elimination of internal
trading between
segments(4,176)(4.0%)－－(4,133)(3.7%)

-

-

-

Other

1,402

1.3%

13.1%

142

1,481

1.3％

105.6%

10.5%

105

Net Sales by Business Segment (Consolidated)【Planned rate and change fiscal year end】
Jan. 2019(millions of yen)

Results% of Total

Gross
MarginDec. 2019（11 months Japan）
Segment
Profit

Plan

% of
Total

YoY
ChangeSegment
ProfitGross
MarginConsolidated
net sales

104,747

100.0%

51.4%

19,612

106,200

100.0%-

52.1%

20,000

Domestic Baby andMother Care
Business

35,593

34.0%

48.6%

6,096

34,771

32.7%

-

48.7%

5,944

Child Care Service
Business

4,472

4.3%

14.0%

169

3,312

3.1%

-

14.3%

138

Health and Elder
Care Business

6,986

6.7%

32.4%

353

6,874

6.5%

-

30.4%

375

China Business

35,581

34.0%

56.0%

11,97237,491

35.3%

-

56.9%

12,797Singapore Business

12,133

11.6%

49.3%

2,744

12,656

11.9%

-

47.9%

2,650

Lansinoh Business

12,753

12.2%

59.5%

1,576

13,771

13.0%

-

59.2%

1,984

Elimination of internal
trading between
segments(4,176)(4.0%)－－(4,043)(3.8%)

-

-

-

Other

1,402

1.3%

13.1%

142

1,368

1.3％

-

10.7%

98

Plan of Overseas Business Sales by Region
China (including HK)

Other Asia

North America

EuropeNear Middle East

Other

（Million JPY）

Local currency basis: 110.2%

2,196
Dec-199,536

35,18459,522

8,160
3,310

1,136

Local currency basis: 107.2%
2,285
Jan-1933,3209,052

56,292

7,715
2,845

0

10,00020,00030,000※【Planned rate 】Dec. 2019：US$1=¥109.00 1 yuan = ¥16.00 ←40,00050,0001,072
60,000【Actual Rate】 Jan. 2019 US$1=¥110.43 1 yuan =¥16.70

Key Priorities for FY Dec. 2019Domestic Baby and Mother Care Business
Strengthening six key product categories
・ Implement comprehensive measures against competing products to maintaina high market share in the nursing bottle/nipple category
・ Study the competitive landscape in the breast pump category and implement
effective measures to compete in the category based on the results of such studyEnhance product line-up, strengthen marketing activities and reinforce sales anddistribution network to improve market share in the baby strollers and otherlarge-sized products (market share target for 6th MTBP: 25%)

Get more involved in promotional activities to achieve collaboration with
(Domestic Baby and Mother Care Business – 2019 new products)
healthcare professionals
Bingle BA9: A baby stroller far easier to push and maneuver

Heath & Elder Care Business
Achieve topline growth and improve profitability through launch of "Profit Care" and "Hygiene Care" series
Further penetrate new sales channels and put new marketing approaches into actionChild Care Service Business
Streamline business operations to improve profitabilityEnhance activities to win new contracts for the in-company childcare businessFurther strengthen safety measures including crisis management(Heath & Elder Care Business – 2019 new products)"Hygiene Care" series aimed at more hygienic and simple
nursing care

Key Priorities for FY Dec. 2019

China Business
Initiatives towards double-digit growth (local currency basis) Launch new products in key product categories: Release 63 SKUs of new products in 2019
 Conduct intensive sales promotion activities at EC events.
 Show 3D images of products on smartphone displays to let customers feel more convinced
when selecting products.

Singapore Business
Singapore: Reinforce development organizational structure to enhance products
for middle-class consumers.
Singapore: Further strengthen brand power through digital marketing.

India: Achieve topline growth through improvement in brand recognition, strengtheningof local product development structure and other measures.
Indonesia: Achieve double-digit topline growth and further improve production functions.

Study feasibility of entering new markets including countries in Africa to achieve growth
for the next MTBP period and beyond.

Lansinoh BusinessNew product development: Strengthen development structure and innovate core breastfeeding products.
Create new values and expand business through collaboration with outside parties.
Enter new markets including countries in Europe, Asia and Africa.

Expand new channels including EC and DME.

<China>Strengthening branding activities<India>TV commercial for improving brandrecognition

Shareholder Return and Investment-Related Indicators
Shareholder return indicator under our 6th Medium-Term Business Plan
We adopt a flexible approach (incl. through share buybacks) to increasing shareholder return with a target to achieve a year-onyear increase in dividends and approximately 55% of the consolidated total shareholder return ratio in each fiscal year.
FY Jan/2017
FY Jan/2017
FY Jan/2019
FY Dec/2019
Dividends

Interim(Actual)Year-end(Actual)25

28

Dividend per share (Yen)(including(includingcommemorative commemorative
dividend of 3 yen) dividend of 3 yen)

Dividend payout ratio

57.1%

Interim(Actual)Year-end(Actual)Interim(Actual)Year-end(Scheduled)Interim(Estimate)Year-end(Estimate)

31

35

34

34

35

35

54.5%

57.2%

58.6%

* Our Group carried out a 2-for-1 stock split with respect to its common stock, effective as of August 1, 2013. It also carried out a 3-for-1 stock split
with respect to its common stock, effective as of May 1, 2015. The values given in the parentheses for dividend per share above are reference
values converted based on the number of shares after the stock split.

<Reference> Investment-related indicators
FY Jan/2018
Interim(Actual)FY Jan/2019

Full-year(Actual)Interim(Actual)FY Dec/2019

Full-year(Actual)Full-year(Forecast)

Capital Expenditures (*1)

1,252

3,546

2,795

5,376

6,100

Depreciation (*2)

1,206

2,451

1,383

2,804

3,000

*1 Property, plant and equipment and intangible assets (including long-term prepaid expense)*2 Depreciation (including amortization of goodwill)

Approach to Enhance Corporate ValueEnhancing Management Quality:12 Tasks of 6th MTBP
ESG

Logical work
process

Salary increase

Global humanresource
development

Global sharing ofcorporatephilosophy & values

World-classbrand power

Sustainable growth

World-class Business
Excellence
Nurture employees’ motivation, satisfaction,
confidence, sense of pride and belonging to thecompany

Diversity/
women inmanagement

Global SCM

Development
capabilities

Business model
for success

Cash flow
management(PVA)

Global cash
management

PVA Tree: Consolidated Results in Jan. 2019
Consolidated

Net sales

Operating profit

Top: Jan. 2019 Plan
Mid: Jan. 2019 Results
Bottom: Jan. 2018Results(\millions)

NOPAT
Plan 14,280
Results 13,729
LY 13,589

Plan 20,400
Results 19,612
LY 19,413

Plan 107,000
Results 104,748
LY 102,563

Cost of sales

Tax
Plan 6,120
Results 5,884
LY 5,824

PVA
Plan
Results
LY

10,993

10,494

10,533

Plan 52,300
Results 50,889
LY 51,991

Capital invested

Working capital

Trade receivables

SG&A expenses

Plan 65,731
Results 64,698
LY 61,124Plan 18,003
Results 18,622
LY 17,659

Plan 16,711
Results 15,723
LY 16,272

Plan 34,300
Results 34,246
LY 31,160

Fixed asset

Inventory asset

Plan 27,389
Results 26,685
LY 24,967

Plan 8,341
Results 9,659
LY 8,158

WACC
common 5.0%

Cash and otherasset and liability
Plan 20,338

Results 19,391
LY

18,499Trade payables
Plan 7,048

Results 6,760
LY

6,772

※From Jan. 2017, B/S Factors for PVA calculation are averaged between beginning and year-end figures.

（参考）

研究開発費
見込 0
前期 0

発送費
見込 0
前期 0

PVA (Ratio): Consolidated Results in Jan. 2019
Consolidated
Top: Jan. 2019 Plan
Mid: Jan. 2019 Results
Bottom: Jan. 2018 Results

Cost of sales ratio
Operating profit ratio

ROIC before tax

ROIC
PVA
spreadPlan
Results
LY

Plan
Results
LY

21.7%

21.2%

Plan
Results
LY

31.0%

30.3%

Plan
Results
LY

19.1%

18.7%
18.9%

31.8%

Plan
Results
LY

50.7%

SG&A expenses ratio
Plan
Results
LY

22.2%

48.9%

48.6%

32.1%

32.7%
30.4%

Working capital ratio

16.7%
16.2%
17.2%

Capital invested t/otax rate
WACC
common5.0%

common30.0%

Plan
Results
LY

Plan
Results
LY

1.6

1.6
1.7

16.8%

17.8%
17.2%

Fixed asset ratio
Plan
Results
LY

25.6%

25.5%
24.3%

Cash and otherasset and liability ratio

Plan
Results
LY

19.0%

18.5%
18.0%

CCC Tree: Consolidated Results in Jan. 2019
Consolidated
Top: Jan. 2019 Plan
Mid: Jan. 2019 Results
Bottom: Jan. 2018 Results(\millions)

Working capital
Plan 18,003

Results 18,622
LY

17,659CCC

Trade receivables
Plan 16,711

Results 15,723
LY

16,272

Plan
Results
LY

Receivable turnover period

66.0
75.6
67.6

Inventory asset
Plan 8,341

Results 9,659
LY

8,158

Trade payables
Plan 7,048

Results 6,760

6,772※From Jan. 2017, B/S Factors for PVA calculation are averaged between beginning and year-end figures.
LY

Plan
Results
LY

57.0
54.8
57.9

Inventory turnover periodPlan
Results
LY

58.2
69.3
57.3

Payables turnover periodPlan
Results
LY

49.2
48.5
47.5

Appendix

Sharing what it takes
for us to grow in the future

6th Medium-term Business Plan: 12 tasks
ESG

Logical work
process

Salary increase

Global humanresource
development

Global sharing ofcorporatephilosophy & values

World-classbrand power

Sustainable growth

World-class Business
Excellence
Nurture employees’ motivation, satisfaction,
confidence, sense of pride and belonging to thecompany

Diversity/
women inmanagement

Global SCM

Development
capabilities

Business model
for success

Cash flow
management(PVA)

Global cash
management※SCM: Supply Chain Management

From our public notice on January 15 2019
1. Overview of Organizational Changes
To bolster enterprise value, the Pigeon Group has established a global head office (GHO), to
integrate head-office functions Group-wide. Under this framework, the Group is working
continually to concentrate and strengthen those functions. In addition, the Group is dividing its
segments responsible for operations and growth into four businesses, mostly by region: The
Japan Business (Domestic Baby & Mother Care Business, Health & Elder Care Business,
Child Care Service Business), China Business, Singapore Business and Lansinoh Business.

With these clearly defined roles and responsibilities, these four businesses maintain liaison
with GHO to pursue continuous, long-term growth.

The point is…

What I would like to achieve under the new organization structure

In accordance with a growth scenario of the Pigeon Group
formulated by GHO from a “total optimization” perspective,
we will preferentially invest our management resources tomake the scenario a reality. In line with the basic strategy,
four profit-earning business divisions (namely, Japan, China,
Singapore, and Lansinoh) agilely address changes inenvironment with autonomous leadership to continueenhancing profitability of the Group as a whole, thus making
Pigeon a great place to work with higher employee moraleand higher corporate value.
41Former Organization

Lansinoh Business Div.

Singapore Business Div.

China Business Div.

Child Care Service Business Div.

Health&Elder Care Business Div.

Domestic B&M Business Div.

Customer Communication Div.

Logistics Div.

Quality Control Div.

R&D Div.

Human Resources& General Affairs Div.

Accounting & Finance Div.

Corporate Administration Div.

Business Unit
Function Unit

New Organization
To clarify roles, function and responsibility on Head Office and each Business Unit
Head OfficeBusiness Unit
・Domestic B&M Div.

・Customer Communication Di..

・Health&Elder Care Business Div.

・Logistics Div.

・Child Care Service Business Div.

・R&D Div.

・HR&GA Div.

・Quality Control Div.

Japan Business

Global Head
Office (GHO)
China Business・China Business Div.
（Including HR&GA, Customer Comunication, R&D etc.)

Singapore Business・Singapore Business Div.
（Including HR&GA, Customer Comunication, R&D etc.)

・Business Strategy Div.
・Accounting&Finance Div.

Lansinoh Business ・Lansinoh Business Div.

（Including HR&GA, Customer Comunication, R&D etc.)
43Roles and function that GHO is expected to perform
Target: Four profit-earning business divisions(Japan, China, Singapore and Lansinoh)
１．Binding us together
To share and practice the Pigeon Way across the Group to enhance our brand equity.

２．Helping to increase the medium-to-long term corporate value
To enhance corporate value of the Group as a whole through consistently growing business by means of
optimizing management resources and appropriately investing them３．Helping to crease the our future
To formulate future business models from a medium- to long-term perspective while getting involved inassessment and implementation of M&A opportunities, incubation (i.e., creation and support) of new
businesses and restructuring of or withdrawal from the existing businesses

Formulated Pigeon’s corporate value model(most recently updated in February 2019)Social Value

Economic Value

To be indispensable for thesociety and our customers

Sum of present values of
future free cash flows*

Provision of solutions and newvaluesDevelopment capabilities

Innovation(Drivers)
Corporate philosophy
shared by all employees
and other stakeholders(WTP** ー Cost) x Volume = Profit
Capability and motivation ofeach employee

Brand power

Reduction of environmental impact
and contribution to society in thefields other than our own business(SDGs)

Increase in NOPAT for a medium tolong term with consistentenhancement of capital productivity(Sustainability)
Corporate governanceCompliance*Free cash flow = NOPAT + Depreciation ― Capex ― Incremental working capital**WTP: willingness to pay***PVA: Pigeon value added

Business models and competitive
advantages that are hard to copy
Brand power/Marketing capabilities
KPIs (PVA***, CCC, ROE, ROIC)
and actions for their improvement

Corporate Overview

Head Office
4-4, Nihonbashi-Hisamatsucho, Chuo-ku, Tokyo
103-8480, Japan

URL http://www.pigeon.co.jp/
http://www.pigeon.com/
Disclaimer on Forward-Looking Statements
This material includes certain forward-looking statements about the Pigeon Group. To the extent thatstatements in this material do not related to historical or current facts, they constitute forward-looking
statements.
These forward-looking statements are based on the current assumptions and judgments of the
Pigeon Group in light of the information currently available to it, and involve know and unknown risks,
uncertainties and other factors, which may affect the statements made in this material.