Results briefing for the six
months ended July 31, 2012
September 5, 2012

(Securities code: 7956)
President & CEO Akio OkoshiContents

 Title, Contents

1-2 Jul. 2012 Results

3 - 14

 Jan. 2013 Full Year Business Forecasts

15 - 212

Jul. 2012 Results3Jul. 2011 Results and Jul. 2012 Results (Consolidated)Jul. 2011(¥ millions)

AmountJul. 2012

YoY Change

Forecast

AmountYoY Change% ofForecast

Net sales

28,432104.4%

30,10031,207109.8%

103.7%

Operatingincome2,087

121.7%

2,200

3,225

154.5%

146.6%

Ordinary
income2,064

117.6%

2,1503,266

158.2%

151.9%Net income

1,214

110.6%

1,400

1,910

157.3%

136.5%Net assets

27,270103.6%－

29,165107.0%－Total assets

44,207108.7%－

45,541103.0%－EPS (¥)

60.69

110.6%

69.95

95.48

157.3%

136.5%BPS (¥)

1,336.67

103.5%－

1,430.16

107.0%－4

Statements of Income (Consolidated)Jul. 2011(¥ millions)

AmountJul. 2012% of Total

Amountsummary% of Total YoY Change

Net sales

28,432100.0 %

31,207100.0 % 109.8 %Cost of sales

16,88059.4 %

17,96057.6 % 106.4 %Gross Profit11,552

40.6 %

13,24742.4 %

Selling, General and
Administrative Expenses

9,464

33.3 %

10,02232.1 % 105.9 % Selling:

Operating income

2,087

7.3 %

3,225

10.3 % 154.5 %Total Other Income andExpenses

(22)

0.0 %

41

Ordinary income

2,064

7.3 %

3,266

10.5 % 158.2 %Total Extraordinary
Income and Loss

(126)(0.5) %

(21)(0.1) %―61

0.2 %

59

0.2 %

96.1 %

1,214

4.3 %

1,910

Less: Minority Interest in Net Incomeof Consolidated Subsidiaries

Net income

0.1 %

114.7 %■ Main SG&A changes+¥412mPersonnel:+¥143mProvision for allowance for
doubtful accounts: -¥97m―6.1 % 157.3 %5Results by Segment (Consolidated)Jul. 2011

Jul. 2012

Amount% ofTotal

Gross
MarginSegment
IncomeAmount% ofTotal

YoY
ChangeGross
MarginSegment
IncomeConsolidated
net sales

28,432100.0%

40.6%

2,087

31,207100.0%

109.8%

42.4%

3,225

Domestic Baby andMother Care
Business

12,142

42.7%

45.7%

1,805

11,954

38.3%

98.4%

47.1%

1,784

Child-rearing
Support Services

2,946

10.4%

11.2%

59

3,159

10.1%

107.2%

11.5%

83

Health Care andNursing CareBusiness

3,303

11.6%

29.9%

234

3,510

11.2%

106.3%

31.0%

130

Overseas Business

9,534

33.5%

48.3%

1,559

12,01338.5%

126.0%

50.5%

2,697

505

1.8%

15.2%

57

570

1.8%

112.8%

15.7%

74(¥ millions)

Other※Segment income in consolidated amount (all unclassifiable operating expenses)
have been adjusted and posted as operating income in the quarterly consolidated statements of income6Overseas Business Sales by Region(¥ millions)
Ch inaOt h er Asia (except Ch ina）

No r th America

Middle East

Ot h er801
6,195

J ul.2012

2,318

Forex impact

1,789

150

12,013907
Local currency basis: +53.0%

Local currency basis: -6.1%

869
4,014

J ul.2011

1,857

1,958

9,534
834

0

2,000

4,000

6,000

8,000

10,00012,00014,000※ Currency rates (July 2012): US$1 = ¥79.77; 1 yuan = ¥12.64; (July 2011): US$1 = ¥82.00; 1 yuan = ¥12.53

7

Key Priorities for the Year to Jan. 2013
■ Domestic Baby and Mother Care Business- Expanding into new areas of business such as large merchandise- Growth of the IT business■ Child-rearing Support Services- Realize further improvements in child-rearing quality;
continue steady expansion of business■ Health Care and Nursing Care Business- Reconstruct business organization; reinforce sales activities for the facilities routeand new channels- Improve the competitive power of the products focusing on those in important
categories and make an effort in sales-promotion activities■ Overseas Business- China: Achieve further growth by reinforcement of the brand name and measuresin growing business categories
Reinforce sales of new products and items manufactured at the new factoryin Changzhou- Europe and America: Steady growth of the newly developed brands (mOmma, etc.)- Market expansion: Aim at increasing the market share in India, Malaysia, SouthKorea, etc.

8

Domestic Baby and Mother Care Business / Child-rearing Support Services■ Domestic Baby and Mother Care Business[New products for babies released during the first half]
Bubble bath series for children over a year and a half, Training chopsticks,
microwave cake set for children over one year, others[Large merchandise business] contento, SOLACICA strollers[IT Business]
Establishment of a brand store within the comprehensive “Amazon.co.jp” online
shopping site
[Direct communication]
22 maternity events held with approximately 1,600 people participating■ Child-rearing Support Services[New contract of entrustment] Authorized nursery school (1)Nursery facilities within business establishments (4)Market Share by Product (July 2012)

Main products to be launched during theAutumn of 2012 (second half of the year)

100.0%
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%

Angel & Girl
Hair Care Series※Source: POS Nationwide Drugstore Growth Estimates, INTAGE Inc. (monthly data)

Akachan no Soft Furikake

9Health Care and Nursing Care Business■ Health Care and Nursing Care Business

Habinurse

Recoup・ Focus on Pigeon Tahira (agent for distribution to healthcare facilities)
・ Walking aid products: Wheelchair sales are strong
・ New products: “Comfort Assist”
・ Start of the Pigeon Manaka day service, smoothly increase users

・ New products: Walking Support Shoes
・ Expanding sales through catalog mail orders and TV shopping

Pigeon Manaka Day Service “SanSan”
Recoup “Walking Support Shoes LU”

Habinurse “Comfort Assist”

10■Overseas Businesses

Overseas Business

China・Restructuring and improvement of the distribution system completed, and the relationship with sales agents is excellent.
・Sales of new products are also progressing favorably
・Production output and operation are increasing in two production facilities due to business expansion.
・Our awareness program related to caring for breastfed infants conducted jointly with our Sanitation department arecontinually being implemented

Europe and America

・ Temporary stagnation of performance due to the slowing economy and decrease in the number of live births aswell・Focus on penetration of “mOmma” and “earth friendly baby” brands

New markets

・ India: Establishment of the distribution system, increase in the number of shops selling the Group’s products, andinstallation of Pigeon Corners
・ Korea: To strengthen the structure for business expansion, a sales branch was reorganized into a local corporation.

Inauguration Ceremony ofBeiqin Hope Primary School(Guizhou Province)

China: Pigeon Shanghai 10-year anniversarycommemoration product (baby bottle)“DoubleHeart” brand in Korea

11

Reference: Balance Sheet Highlights (Consolidated)
Jan. 12AmountAmountJul. 12(¥ millions)YoY Change(Amount)

YoY Change(%)

Cash and time deposit

7,293

7,306+ 12

100.2 %

Notes and accounts
receivable

9,993

11,237+1,244

112.5 %

Inventories

6,926

7,028+101

101.5 %

Notes and accounts payable

3,758

3,758( 0)100.0 %

Borrowings

4,898

5,003+ 105

102.1 %Net assets

27,93529,165+ 1,230

104.4 %

Total assets

43,77245,541+1,768104.0 %

Equity ratio

62.7%

62.9%

－+ 0.2 pt■ Notes and accounts receivable:■ Inventories:

Increase due to business expansion

12

Reference: Cash Flows(¥ millions)

1,883 (1,104)
1,869(751)(830)(1,041)
(7)

6,827

6,895

64

7,293

7,306

Acquisition of PPE: ¥(997) m(Jul. 11: ¥(749) m)
Decrease (increase) in trade receivables: ¥(1,139) m(Jul. 11: ¥(546) m)
Income before income taxes: ¥3,244 m(Jul. 11: ¥1,938 m)

Loan income/repayments: ¥ 87 m
(Jul. 11: ¥(117) m)
Payment of cash dividends: ¥(880) m(Jul. 11: ¥(878) m)

Jul. 2011
Balance at Operating Investing
Beginning Activities Activities

6,827

1,869

(751)

Jul. 2012

Financing Translation/Valu Balance
Activities ation Gain (Loss) at End(1,041)

(7)

6,895

Balance at Operating
Beginning Activities

7,293

1,883

InvestingActivities(1,104)

Financing Translation/ValuActivities ation Gain (Loss)

(830)

64

Balanceat End

7,306

13

Reference: Investment-Related Indicators(Consolidated)(¥ millions)Jan. 2012

Jan. 2013

Interim(Result)

Full Year(Result)

Interim(Result)

Full Year(Plan)

Capital expenditures ※1

1,085

1,672

710

2,006

Depreciation(tangible fixed assets)

722

1,381

681

1,826

Research and development ※27551,497766

1,595

※1

Refers to purchase of tangible fixed assets, excluding construction in progress※2

Refers to total R&D expenditures, including personnel-related

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Jan. 2013 Full Year Business Forecasts

15

Jan. 2012 Results and Jan. 2013 Forecast (Consolidated)
Jan. 2012(¥ millions)

AmountJan. 2013 (Revised Forecast)% of Total

YoY Change

Amount% of Total

YoY Change

Net sales

59,145100.0%

103.7%

64,900100.0%

109.7%

Operatingincome

5,042

8.5%

110.9%

6,200

9.6%

122.9%

Ordinary
income

4,917

8.3%

110.9%

6,100

9.4%

124.1%Net income

3,1835.4%

108.7%

3,500

5.4%

109.9%Net assets

27,935－103.3%

29,634－106.1%

Total assets

43,772－102.5%

48,110－109.9%EPS(¥)

159.05－108.7%

174.88－110.0%BPS (¥)

1,370.46－

103.4%

1,452.32－

106.0%

ROA

11.4%

－

－

12.4%

－－

ROE

11.8%

－

－

13.3%

－－

※ ROA = Ordinary income ÷ Total assets; ROE = Net income ÷ Equity (in both cases, denominators are averaged between beginning and year-end figures)

16Results and Forecast by Segment (Consolidated)
Jan. 2012(¥ millions)Jan. 2013 (Revised Forecast)Amount% ofTotal

Gross
MarginSegment
IncomeAmount% ofTotal

YoY
ChangeGross
MarginSegment
IncomeConsolidated
net sales

59,145100.0%

41.1%

5,042

64,900100.0%

109.7%

41.9%

6,200

Domestic Baby andMother Care
Business

24,047

40.7%

46.5%

3,677

24,44537.7%

101.7%

46.0%

3,611

Child-rearing
Support Services

5,990

10.1%

11.5%

152

6,150

9.5%

102.7%

11.5%

160

Health Care andNursing Care
Business

6,469

10.9%

29.3%

350

7,014

10.8%

108.4%

28.5%

98

Overseas Business

21,584

36.5%

48.1%

3,909

26,28240.5%

121.8%

50.2%

5,814

Other

1,052

1.8%

15.6%

138

1,007

1.6%

95.8%

11.5%

127

※Segment income in consolidated amount (all unclassifiable operating expenses)
have been adjusted and posted as operating income in the consolidated statements of income※Assumed exchange rates of Overseas Business: US$1 = ¥78.80 ; 1 yuan = ¥12.45

17

Full Fiscal Year Overseas Sales by Region(¥ millions)
Ch inaO th er Asia (except Ch ina）

Nor th AmericaMiddle EastO t h er

1,603
J a n.2013( R evisedF orecast)

13,723

5,391

3,618

26,282
1,945

1,532
J a n.2012( R esult)

10,167

4,221

3,842

21,584
1,819

0

5,000

10,00015,00020,00025,00030,000※ [Currency rates] Jan. 2013 (assumed): US$1 = ¥78.80; 1 yuan = ¥12.45; Jan. 2012: US$1 = ¥79.79; 1 yuan = ¥12.34

18

Revised Earnings Forecast by Consolidated Segment(Comparison to Forecast at the Beginning of the Fiscal Year)First Half Results

Second Half Forecast

Full Year
Revised Forecast

Difference

PreviousForecast

RevisedForecast

Difference

33,692(507)

64,30064,900600

12,77012,491(279)24,89524,445(450)

104

3,095

2,990

(104)

6,150

6,150

0

3,510

7

3,511

3,503

(7)

7,014

7,014

0

10,902

12,013

1,110

14,32914,269(60)

25,232

26,282

1,050

514

570

55

493

437

(55)

1,007

1,0070(¥ millions)

Previous
Forecast

2Q
Results

Difference

Previous
Forecast

Revised
Forecast

Consolidated
net sales

30,10031,207

1,107

34,200

Domestic Babyand Mother Care
Business

12,125

11,954(170)

Child-rearing
Support Services

3,054

3,159

Health Care andNursing Care
Business

3,502

Overseas
BusinessOther19Second Half Overseas Sales by Region (Comparison to Previous Forecast)(¥ millions)
China
中国

OtherAsia (exceptその他アジア China)North
北米 AmericaMiddle
中近東EastOtherその他地域

801
7,528

Revised
修正計画
Forecast

3,072

1,828

14,269
1,037

978
6,888

Previous
期初計画
Forecast

3,098

2,098

14,3291,245

0

2 ,0004,00 0

6,000

8,000

10,000

1 2,000

14,00 016,00020

Shareholder Return and Investment-Related Indicators[Shareholder return indicators under Fourth Medium-TermBusiness Plan]
・ Adopt flexible approach to upgrading shareholder return(incl. through share buybacks), targeting continued total
shareholder return ratio of 50% or higher
Dividend Status

Dividend per share(yen)Payout ratio

Jan. 2010 (Result)Jan. 2011 (Result)Jan. 2012 (Result)Jan. 2013 (Forecast)InterimYear-EndInterimYear-EndInterimYear-EndInterimYear-End

32

32

44

44

44

44

44

44

45.1%

60.1%

55.3%

50.3%

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Corporate Overview
PIGEON CORPORATIONHead office
4-4, Nihonbashi-Hisamatsucho, Chuo-ku,
Tokyo
103-8480, Japan
Tel: +81-3-3661-4200+81-3-3661-4188 (Investor Relations)
Fax:+81-3-3661-4320
E-mail addressInvestorRelations＠pigeon.com

URL http://www.pigeon.co.jp /http://english.pigeon.co.jp/
In this document, statements other than historical facts related to plans, forecasts,
and strategies are based on information available at the time of writing.
The Corporation cannot provide guarantees or commitments for these forwardlooking statements.
Due to various factors, actual results may differ significantly from those anticipatedin this document.

© All rights reserved by PIGEON Corporation

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