Pigeon Corporation Summary of Financial Results Briefing for the 1H of the FY December 2023

Summary of the Financial Results Briefing for the First Half of the FY December 2023

[Points of Attention]
This Summary is a reference for those who would like to review the session or event of the results
briefing held by Pigeon Corporation.
Please note this is not the entire text of the conference but a summary based on our judgment.
Forward-looking statements in these materials are based on management's assumptions andbeliefs in light of the information currently available to it and involve known and unknown risks,
uncertainties and other factors. Such risks, uncertainties and other factors may affect theCompany's performance.
In the event of discrepancy between the English version and the Japanese version of thesummaries, the Japanese-language version shall prevail.

[Date & Time]Thursday, August 10, 2023, 1:00 p.m. start[Location]

Sumitomo Mitsui Banking Corporation East Building Rising Square.

[Speakers]

6
Norimasa Kitazawa

President and CEO

Tadashi Itakura

Director, Senior Managing Executive Officer,

Kevin Vyse-Peacock

Director, Executive Officer,

Ryo Yano

Director, Executive Officer,

Yusuke Nakata

Senior Managing Officer

Zenzou Yamaguchi

Senior Managing Officer

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Pigeon Corporation Summary of Financial Results Briefing for the 1H of the FY December 2023

Kitazawa: Thank you very much for taking time out of your busy schedule today to participate in
our earnings presentation.
Group results for the first half of the year showed growth in all categories, with net sales up 106%
year-on-year, gross profit up 112% year-on-year, and operating income up 127% year-on-year. The
operating margin was 13.6%, an improvement of 2.3 percentage points from the same period lastyear.

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Pigeon Corporation Summary of Financial Results Briefing for the 1H of the FY December 2023

Results by the Business segment.
The Japan business, which had been suffering from the Covid-19 pandemic, is now on a recovery
track in terms of both sales and profits, with growth in baby care in particular driving the recovery of
the Japan business this fiscal year.
The China business also suffered during the three years of the Covid-19 pandemic, but has seen arecovery in performance this fiscal year.
On the other hand, the Singapore business, which had been expected to grow, ended the first halfof this fiscal year with both sales and profits below the previous year's levels, due in part to areactionary decline from the rapid recovery from the Covid-19 pandemic in Southeast Asian
countries last year.
In terms of the Lansinoh business, however sales in the North American market fell short of theprevious year's level, the Lansinoh business as a whole grew steadily, thanks in part to strong salesin Europe.

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Pigeon Corporation Summary of Financial Results Briefing for the 1H of the FY December 2023

Factors behind the year-on-year change in operating income.
The increase in profit was due to an increase in gross profit of about 1.2 billion yen resulting froman increase in sales, and an increase of about 1.2 billion yen resulting from an improvement in the
gross margin.
On the other hand, the main reason for the decrease in profits was the increase in SG&A expenses,
including marketing expenses and travel expenses, due to the resumption of various activities inline with the recovery trend from the Covid-19 pandemic.

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Pigeon Corporation Summary of Financial Results Briefing for the 1H of the FY December 2023

This is the highlight of the Balance Sheet.
Compared to the end of the FY Dec. 2022, cash and deposits decreased by about 1.8 billion yen,while inventories increased by about 1.5 billion yen. The main reason for the increase in inventories
was the buildup of inventories in Japan due to the construction of the new Fuji Plant and thesuspension of operations at the former plant.

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Pigeon Corporation Summary of Financial Results Briefing for the 1H of the FY December 2023

Here is a review of the activities of each business segment.
As you know, in the 8th Mid-Term Plan announced in February of this year, "implementation of
structural reforms" is a major theme.
In existing business areas, in terms of products, we will strengthen nursing bottle, nipples, andskincare. By business segment, we will accelerate growth in Singapore and Lansinoh business,maintain stable growth in China business, and improve profitability in Japan business.
In addition, as a new business area, in terms of products, we will expand our product lineup to
include products for toddlers, moms-to-be, and dads. By region, we are tapping the market of North
America by Pigeon brand and making a full-scale entry into the African market.

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Pigeon Corporation Summary of Financial Results Briefing for the 1H of the FY December 2023

We will review the activities of each business in the first half of the year in accordance with thethemes set forth in each of the 8th medium-term plans.
In the Japan business, sales of baby care grew by 3.7% y-o-y. Sales of core products, nursing
bottles and nipples, and skincare also grew year-on-year. We also continued to maintain an
overwhelmingly high market share for nursing bottles.
The "ME. by Pigeon" series of prenatal and postpartum care products, newly launched in February,
is now mainly sold at Tsuruha Drug stores. Me. by Pigeon products are sold not in the conventional
baby products section but in the feminine care products section. We look forward to seeing the
growth of this new initiatives.
Although there has been little increase in demand from inbound tourist to Japan as of the end of thefirst half, the Momo-no-ha (Peach Leaves) Skincare series has been growing year-on-year, mainly
due to overseas demand from cross-border e-commerce and other sources.
In the Health and Elder care, sales of new products such as "Rakuraku Oshiri Kirei Mist" and"Liquid Toromi Kakerudake" have been strengthened and are progressing better than expected.

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Pigeon Corporation Summary of Financial Results Briefing for the 1H of the FY December 2023

China Business. Sales in mainland China in local currency terms grew by 5% over the previous
year.
Sales of nursing bottle and nipples grew by +28% y-o-y, which also contributed to the improvementin gross margin. Baby skincare products also grew year-on-year, with sales of toddler products,
which marketed at the end of last year, expanding to approximately 500 million yen in the first halfof this fiscal year. The products are growing in a very promising way, and we are considering theaddition of further items in the future.
Sellout, on the other hand, ended at -3% y-o-y. E-commerce grew by +3%, with double-digit growthseen especially in newly focused channels such as TikTok and Pinduoduo, and the EC ratio finallyrose to 73% in the first half of the year.
As for new products, we have launched the "Natural Weaning Series," a bottle feeding device
developed for older babies, and will gradually expand sales starting in the second half of this fiscal
year. This product has received a very positive response from customers, and we are aware ofcompeting local brands. With the introduction of the "Natural Weaning Series," we will work tofurther expand our market share of the nursing bottles and nipples market.

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Pigeon Corporation Summary of Financial Results Briefing for the 1H of the FY December 2023

Singapore Business. Sales in the major markets of India, Malaysia, Indonesia, and the Middle East
ended below the previous year's level.
This was due in part to expectations of a rapid recovery from the Covid-19 pandemic in Southeast
Asian countries last year, and our distributors and major retailers in each country aggressively
purchased new models of the nursing bottles and skincare products. However, sellout did notincrease as much as expected and distribution inventories increased. Since it will take some time
for the distribution inventory to normalize, we will spend a certain amount of sales promotion
expenses in the second half of the current fiscal year to increase sellout.

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Pigeon Corporation Summary of Financial Results Briefing for the 1H of the FY December 2023

Lansinoh Business.
The Lansinoh Group ended the year with a +2% increase in sales over the previous year, thanks togrowth in all regions except North America.
The factors contributing to the -6% decline in North American sales were the timing of purchases bymajor e-commerce customer and the fact that the launch of a major new product, a wearable breast
pump, which was scheduled to be launched in the first half of the year, took longer than expected toobtain FDA approval and was launched in the second half of the year.
New products included postpartum care products, such as gel pads to care for C-section scars andnewly designed breast milk storage bottles. In particular, sales of these prenatal and postpartum
care (Pericare) products grew by more than 50% in the first half of the year compared to theprevious year, and the sales composition ratio has grown to just under 5%. We expect that there is
still room for growth in this category.
From this fiscal year, Lansinoh will renew its brand vision and evolve with the slogan "Stand withthe mothers" as a brand that is closer to mothers than ever before.

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Pigeon Corporation Summary of Financial Results Briefing for the 1H of the FY December 2023

In the area of ESG and sustainability, we set up a nursing bottle collection box at Akachan Honpo
stores in Japan and collected approximately 400 kg of nursing bottles and nipples over a threemonth period.
In Germany, we participate in "Welcome-Baby-Bags" and other product donations, and in Japan,
we continuously hold "Lesson for learning about babies" at junior high schools to create value withsociety toward the realization of a "baby-friendly future”.

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Pigeon Corporation Summary of Financial Results Briefing for the 1H of the FY December 2023

This is the forecast for the full year.
The full-year earnings plan announced in February remains unchanged, and we will continue to
implement various measures to achieve the plan announced at the beginning of the fiscal year.

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Pigeon Corporation Summary of Financial Results Briefing for the 1H of the FY December 2023

This is an example of our efforts in the second half of the fiscal year. New products are scheduled
to be launched in each business.
In the Japan business, a new model of electric nasal aspirator will be launched in the Baby Carebusiness. The former model has been a hit product with cumulative sales exceeding 200,000 units.
The new model, with even more advanced comfort of use, is a high unit price product with a price ofapproximately 15,000 yen per unit. In addition, we will also start selling parts for reusing the nursing
bottle.
In the China business, we plan to launch a new series of drinking cups jointly developed with afamous outside designer. Also, new baby skincare products are planned.
The Singapore business plans to launch an expanded range of the nursing bottles and improved
models of breast pumps.
In the Lansinoh business, we expect the wearable breast pump to be fully launched and contributeto sales.
Other activities include a new factory in Fuji City that has finally been completed and will start
operation in September, and a decision to enter the African market, with plans to establish a local
subsidiary in Kenya by the end of the year.

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Pigeon Corporation Summary of Financial Results Briefing for the 1H of the FY December 2023

This is related to shareholder return and investment.
The Company plans to pay an interim dividend of 38 yen per share, in line with the plan announced
in February.
In addition, capital expenditures are progressing as expected.

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Pigeon Corporation Summary of Financial Results Briefing for the 1H of the FY December 2023

Finally, I would like to reiterate our strengths for sustainable growth.
One of our major strengths is our "in-depth baby’s development research," as exemplified by ournursing bottles. We are also actively engaged in research on baby’s skin and baby skincare in orderto further deepen our knowledge in skincare, which we have been focusing on in recent years as
the next pillar of the nursing bottles and nipples.
Most recently, we have been able to produce “3D skin cell models of a baby” in our laboratory
located in our factory in China, and I believe that we are the only company in the world thatspecializes in research on "baby’s 3D skin cell models".
By utilizing this 3D skin cell model of a baby, we expect, for example, to establish our own
evaluation method for quality and safety, to establish our position as a “rule maker” in the industry,
and to develop products that are truly effective for each problem by deepening research on different
age groups, atopic skin, eczema, etc. We hope that this will lead to the development of productsthat are truly effective for the specific concerns of each customer. In the future, we may also expand
our business opportunities by creating functional raw materials for baby skin care and selling themto other companies. By further deepening our skincare research, we hope to create further
uniqueness and competitive advantage, as well as create barriers to entry.

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Pigeon Corporation Summary of Financial Results Briefing for the 1H of the FY December 2023

Pigeon's skin care research centers are located in Japan and China.
On the left is our new factory in Fuji, which will start operation in September. Please look forward to
our two bases, the Fuji factory in Japan and the factory in China, as we strengthen our R&D inskincare, which will lead to sustainable growth for our company.

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Pigeon Corporation Summary of Financial Results Briefing for the 1H of the FY December 2023

Another activity that has been fundamental to our company since its foundation is our "hospital andprofessional activities.
Hospital activities include, for example, joint research with obstetricians and NICUs, development of
exclusive products for in-hospital use, and provision of information on breastfeeding and newborncare to medical professionals. In addition, we support the establishment of "breastfeeding /pumping rooms" in hospitals to enhance the breastfeeding support environment, and in recent
years, we have begun to support the spread of “breast milk banks”. We started supporting breast
milk banks in Japan in 2020, and this year we are expanding the scope of our activities bycontributing to the support of breast milk banks overseas as well.
During the three years of the Covid-19 pandemic, our hospital activities in each country were alsoquite limited, but we will gradually re-strengthen them starting this fiscal year. The Pigeon brand has
become so strong in the Japanese market today because this hospital activities, and in the Chinese
market as well, the brand has grown so much because we have strengthened our hospital activities.
We will further strengthen the brand and lead it to sustainable growth by reinforcing our hospital
activities.
That is all from me. Thank you very much.

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Pigeon Corporation Summary of Financial Results Briefing for the 1H of the FY December 2023

Q&A Session*Q&As are summarized by the Business Segment.
[Group Consolidated]
Q. How much of the SG&A expenses are unspent for 1H compared with plan?
A. As of the end of the first half, there were approximately 800 million yen of SG&A expenses
unspent against the internal plan. These unspent expenses will be used in the second half of thecurrent fiscal year and thereafter. Although we spent 500 million yen of SG&A expenses in the Q2
that were carried over from the Q1 to the Q2, but some of the SG&A expenses that were scheduled
to be used in the Q2 were unspent and carried over to 2H.

[Japan Business]
Q. Summarize 1H performance and 2H key activities.
A. Although the market environment in Japan has not changed significantly from our initialassumptions at the beginning of this fiscal year, our sales and marketing activities have changed,
and as a result, 1H results were stronger than expected. First of all, we maintain a slight increase insales of nursing bottles and nipples, which account for nearly 90% of the market. Specifically, wewere able to achieve a recovery in sales and market share by strengthening categories such as
baby skincare and wet tissues, which had large sales volume but lost market share to competitors.
For the second half of the fiscal year, we plan to revise prices for the second time this year in
September. In the mid- to long-term, we will strengthen its product development capabilities inJapan, not only to increase market share of existing products, but also to aggressively create newcategories in Japan.

Q. Tell us about market opportunities in Japan over the medium to long term in the context
of declining birthrates.
A. The number of births in Japan was over 2 million in Yr 1973 and has been declining for the next
50 years, dropping to the 800,000 level by Yr 2020, but we have been able to increase our sales
during this period. We also believe that growth through horizontal expansion of our products ispossible, as we will be expanding our target customers in Japan, such as toddlers and mother care.
In addition, although the number of births in Japan has declined by about 15% from Yr 2017 to2022, due in part to changes in people's lifestyles and baby-care needs, a comparison of the last
five years shows that, for example, the experience rate of purchasing nursing bottles, the number of

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Pigeon Corporation Summary of Financial Results Briefing for the 1H of the FY December 2023

bottles owned, and the allowable unit price per bottle are increasing. The amount of money spent
per baby has also increased significantly over the past five years, making it easier to sell high unit
price products such as electric nasal aspirator. Considering these changes in the environment, we
believe that the market opportunity remains large despite the decline in the number of births, andthat we can continue to grow our business in Japan by further expanding our lineup of uniqueproducts that provide solutions to the problems of baby care for our Japanese customers.

[China Business]
Q. Summarize 1H performance and 2H key activities.
A. The business environment in China may be more difficult than assumed at the beginning of thisyear, as the decline in the number of births has accelerated due to the Covid-19 pandemic, andthere are concerns that the decline in the number of births may further accelerate in the Yr 2023.
In the first half of the year, sales on the China mainland grew by 5% y-o-y by concentrating on ourcore products, nursing bottles and nipples and skincare. Sales of nursing bottles and nipples
recovered to the Yr 2019 (pre-Covid) level and skincare sales increased to 1.5 times of the Yr 2019,
while market share also increased. Sales of nursing bottles and nipples recovered to the pre-Covid
level because we focused on our resources in 1H, however, it was less active in consumables suchas liquid cleanser, etc. resulting in lower-than-expected sales of consumables.
In the second half of the year, in addition to solid growth of the new “Natural Weaning” series andtoddler skincare products, and we have already begun preparations to increase production capacityof the “Natural Weaning” products by the end of the year because it has been received great
feedback from customers in the test marketing period.
In addition, although the consumables category is not highly profitable, if we continue to shrink it,
the negative impact on sales will be significant, so we will consider taking steps to recover sales ofconsumables. However, we would like to consider investing expenses not on a scale that would
push down the profit margin of the China business as a whole, but only to recover sales ofconsumables to some extent.

Q. Tell us about the product features of the newly launched “Natural Weaning” Series.
A. The Natural Weaning Series, which will be launched for the first time in China, is a feeding bottle
equipped with two types of "nipple-shaped straws" newly developed, each of which can be usedfrom 6 months and 12 months old. These products were developed based on the knowledge gained
from our many years of babies’ feeding research. The main feature of these products is that byusing the nipple-shaped straws, babies can make the natural transition from bottle drinking to straw

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drinking while supporting their oral development after they shift from a nursing bottle to a drinking
cup.
In the current Chinese market, while we have a very high market share of over 60% for nursing
bottle and nipple products, especially among customers with newborns, we know that manycustomers are shifting from our nipples to competitor’s straw cups as their babies get older. Since
we have seen good results from the test-market in June, we will invest in additional molds in thesecond half of this fiscal year to strengthen our production system, which will lead to significant
growth in the nursing bottle and nipple category from next year onward. We are planning to invest in
additional molds in the second half of this fiscal year to strengthen our production.
Q. What is the medium- to long-term outlook for the offline channel (brick-and-mortar store)?
A. Sell-outs in the offline channel continued to be difficult, down -16% y-o-y in the first half year-todate. With the rapid shift to e-commerce in the three years since the Covid-19 pandemic, the trendof small stores such as so-called “mom and pop shop” and local chain baby stores shrinking may
unfortunately be difficult to stop. However, we remain aware that brick-and-mortar stores are still an
important channel for us, and we will continue to value them as shopping destination where
customers can experience our brands and products firsthand, especially the two major national
chain baby stores.
On the other hand, to cover the shrinking number of local baby stores, we are now focusing on
Pinduoduo to reach out to local customers. Although sales are still small, Pinduoduo is growing at
twice the rate every year. And like Tiktok, we aggressively investing in and nurturing Pinduoduo as
one of its new channels of focus.

Q. What is the outlook for the number of births and any future steps you are taking toachieve growth even in the face of declining births?
A. Since we only have access to official birthrate information from China's population statistics,
which are released once a year, it is difficult to determine the certainty of the information currently
being reported that the number of births in China in 2023 may decrease by 20% from the previous
year, and we have no idea of the outlook for the number of births.
In the 8th Mid-term Business Plan announced in February, the Chinese market was planned basedon the assumption that the number of births would decline every year. However, we arereorganizing our business plan for 2024 and beyond to include the possibility that the decline in thenumber of births will accelerate beyond our expectations. For example, the natural weaning series,
which we began selling in June, has had very good preliminary sales results, and we will expand
the production capacity to boost the sales in 2024 and beyond. Also, the toddler skincare series,

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which has been steadily increasing sales, will accelerate its growth by bringing forward the launchof additional new products originally planned. In addition, we will invest resources in new products,
such as skincare (ocean series) scheduled for launch in the second half of the current fiscal year
and a new series of drinking cup jointly developed with a famous outside designer, to boost sales.
Even if the number of births declines more than our expectation, we will take various measures toachieve the stable growth in the China market.

[Singapore Business]
Q. Summarize 1H performance and 2H key activities.
A. Amid expectations of a sharp recovery from the Covid-19 pandemic in Southeast Asian countries
last year, our distributors and major retailers in each country aggressively purchased new nursing
bottles and skincare products, but sellout did not grow as much as expected and our sales (sell-in)
fell short of the previous year due to adjustments in distribution inventory. On the other hand, sellout
in major markets such as India, Indonesia, and Malaysia has been gradually improving in Q1 andQ2. In the second half of the year, however we believe that it will take some time to adjust
distribution inventories, we will continue to prepare additional new products in nursing bottles andskincare, as well as focus on brand activities that resumed at the dawn of the Covid-19 pandemic,in order to get back on a growth path again.

[Lansinoh Business]
Q. Summarize 1H performance and 2H key activities.
A. Sales grew in all markets except North America. There are clear reasons for the weak sales inNorth America: shipments to a major EC were carried over to July, and the launch of a new product,
the wearable breast pump, was delayed. In the second half of the fiscal year, we plan to increase
sales of the wearable breast pump by investing in advertising and other measures.

[END]

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