Financial Results for the Fiscal Year Ended December, 2017 · Mouthwash 182% Gained new, younger users, helping expand market. FY2017 mouthwash sales Y-on-Y change . Lion ... will
58
1 February 9, 2018 Financial Results for the Fiscal Year Ended December, 2017 Lion Corporation Itsuo Hama Representative Director, President Executive Officer
Percentage of NONIO mouthwash customers who have not bought mouthwash in the past 6 months
Ages
7
Detergent for Institutional Use category Sales of detergents for food processing plants 176
Industrial Products Business Topics
Vegetable washing systems Major convenience store vendor installed new production line
ＭｉＢＯＭｉｃｒｏ Ｂｕｂｂｌｅ Ｏｚｏｎｅ
Fresh MiBO process
8 （ Indonesia １０７）
Thailand 105
Malaysia 108
South Korea 108
China 109
Overseas Business Topics Business growth continued to outpace GDP growth in mainstay countries
FY2017 Net Sales Y-on-Y Change (local currency basis)
9
V-2 Plan Results Quantitative Growth Record-high sales for a fourth consecutive year Consolidated net sales grew 25 from FY2011 Overseas sales doubled
10
()
Record High Operating Income for a Fourth Consecutive Year
V-2 Plan Results Qualitative Growth
Graph1
(Billions of yen)
34
66
Operating income
Operating income ratio
111
272
111
34103816794
720013
21520358265
1080019
30735358873
1240006
33767379068
1630074
43242072683
2450002
61935359929
272
66
Sheet1
11
2014 results
V-2 Plan targets
V-2 Plan results
Net Sales yen3673bn yen4000bn yen4104bn
Operating Income
yen124bn yen200bn yen272bn
Operating Income Ratio
34 50 66
R O E 62 10or higher
122
ＢＥＰ 93 90or lower
88
Achieved All V-2 Plan Targets Medium-Term Management Plan Results
12
Medium-Term Management Plan Results Continued to bolster the launch and
cultivation of high-value-added products
13
Strengthen RampD base
Overseas business reorganization
Enhance production capacity
Chemical business reorganization
Strengthen lsquofood with function claims
New business development
Strengthening business base for continued growth
Medium-Term Management Plan Results
Background of Setting New Management Vision
15
Rapid advance of AI and IoT Emergence of various business platforms Change in distribution and logistics systems due to e-commerce channels Expansion in sharing businesses
Acceleration of rapidly aging society Rise in healthcare awareness Emergence of the millennial generation Diversification of work environments and styles
Drastic changes in the external environment
16
Viewing these changes as our
greatest opportunities Shift gears
Clarify the orientation
of the Lion Grouprsquos business
Acceleration of growth-focused transformation
New Management Vision
18
19
Inspiration for the New Management Vision
20
Medium-Term Management Plan
ＬＩＶＥ Plan (ＬION Value Evolution Plan)
21
22
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Percentage of NONIO mouthwash customers who have not bought mouthwash in the past 6 months
Ages
7
Detergent for Institutional Use category Sales of detergents for food processing plants 176
Industrial Products Business Topics
Vegetable washing systems Major convenience store vendor installed new production line
ＭｉＢＯＭｉｃｒｏ Ｂｕｂｂｌｅ Ｏｚｏｎｅ
Fresh MiBO process
8 （ Indonesia １０７）
Thailand 105
Malaysia 108
South Korea 108
China 109
Overseas Business Topics Business growth continued to outpace GDP growth in mainstay countries
FY2017 Net Sales Y-on-Y Change (local currency basis)
9
V-2 Plan Results Quantitative Growth Record-high sales for a fourth consecutive year Consolidated net sales grew 25 from FY2011 Overseas sales doubled
10
()
Record High Operating Income for a Fourth Consecutive Year
V-2 Plan Results Qualitative Growth
Graph1
(Billions of yen)
34
66
Operating income
Operating income ratio
111
272
111
34103816794
720013
21520358265
1080019
30735358873
1240006
33767379068
1630074
43242072683
2450002
61935359929
272
66
Sheet1
11
2014 results
V-2 Plan targets
V-2 Plan results
Net Sales yen3673bn yen4000bn yen4104bn
Operating Income
yen124bn yen200bn yen272bn
Operating Income Ratio
34 50 66
R O E 62 10or higher
122
ＢＥＰ 93 90or lower
88
Achieved All V-2 Plan Targets Medium-Term Management Plan Results
12
Medium-Term Management Plan Results Continued to bolster the launch and
cultivation of high-value-added products
13
Strengthen RampD base
Overseas business reorganization
Enhance production capacity
Chemical business reorganization
Strengthen lsquofood with function claims
New business development
Strengthening business base for continued growth
Medium-Term Management Plan Results
Background of Setting New Management Vision
15
Rapid advance of AI and IoT Emergence of various business platforms Change in distribution and logistics systems due to e-commerce channels Expansion in sharing businesses
Acceleration of rapidly aging society Rise in healthcare awareness Emergence of the millennial generation Diversification of work environments and styles
Drastic changes in the external environment
16
Viewing these changes as our
greatest opportunities Shift gears
Clarify the orientation
of the Lion Grouprsquos business
Acceleration of growth-focused transformation
New Management Vision
18
19
Inspiration for the New Management Vision
20
Medium-Term Management Plan
ＬＩＶＥ Plan (ＬION Value Evolution Plan)
21
22
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Percentage of NONIO mouthwash customers who have not bought mouthwash in the past 6 months
Ages
7
Detergent for Institutional Use category Sales of detergents for food processing plants 176
Industrial Products Business Topics
Vegetable washing systems Major convenience store vendor installed new production line
ＭｉＢＯＭｉｃｒｏ Ｂｕｂｂｌｅ Ｏｚｏｎｅ
Fresh MiBO process
8 （ Indonesia １０７）
Thailand 105
Malaysia 108
South Korea 108
China 109
Overseas Business Topics Business growth continued to outpace GDP growth in mainstay countries
FY2017 Net Sales Y-on-Y Change (local currency basis)
9
V-2 Plan Results Quantitative Growth Record-high sales for a fourth consecutive year Consolidated net sales grew 25 from FY2011 Overseas sales doubled
10
()
Record High Operating Income for a Fourth Consecutive Year
V-2 Plan Results Qualitative Growth
Graph1
(Billions of yen)
34
66
Operating income
Operating income ratio
111
272
111
34103816794
720013
21520358265
1080019
30735358873
1240006
33767379068
1630074
43242072683
2450002
61935359929
272
66
Sheet1
11
2014 results
V-2 Plan targets
V-2 Plan results
Net Sales yen3673bn yen4000bn yen4104bn
Operating Income
yen124bn yen200bn yen272bn
Operating Income Ratio
34 50 66
R O E 62 10or higher
122
ＢＥＰ 93 90or lower
88
Achieved All V-2 Plan Targets Medium-Term Management Plan Results
12
Medium-Term Management Plan Results Continued to bolster the launch and
cultivation of high-value-added products
13
Strengthen RampD base
Overseas business reorganization
Enhance production capacity
Chemical business reorganization
Strengthen lsquofood with function claims
New business development
Strengthening business base for continued growth
Medium-Term Management Plan Results
Background of Setting New Management Vision
15
Rapid advance of AI and IoT Emergence of various business platforms Change in distribution and logistics systems due to e-commerce channels Expansion in sharing businesses
Acceleration of rapidly aging society Rise in healthcare awareness Emergence of the millennial generation Diversification of work environments and styles
Drastic changes in the external environment
16
Viewing these changes as our
greatest opportunities Shift gears
Clarify the orientation
of the Lion Grouprsquos business
Acceleration of growth-focused transformation
New Management Vision
18
19
Inspiration for the New Management Vision
20
Medium-Term Management Plan
ＬＩＶＥ Plan (ＬION Value Evolution Plan)
21
22
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Percentage of NONIO mouthwash customers who have not bought mouthwash in the past 6 months
Ages
7
Detergent for Institutional Use category Sales of detergents for food processing plants 176
Industrial Products Business Topics
Vegetable washing systems Major convenience store vendor installed new production line
ＭｉＢＯＭｉｃｒｏ Ｂｕｂｂｌｅ Ｏｚｏｎｅ
Fresh MiBO process
8 （ Indonesia １０７）
Thailand 105
Malaysia 108
South Korea 108
China 109
Overseas Business Topics Business growth continued to outpace GDP growth in mainstay countries
FY2017 Net Sales Y-on-Y Change (local currency basis)
9
V-2 Plan Results Quantitative Growth Record-high sales for a fourth consecutive year Consolidated net sales grew 25 from FY2011 Overseas sales doubled
10
()
Record High Operating Income for a Fourth Consecutive Year
V-2 Plan Results Qualitative Growth
Graph1
(Billions of yen)
34
66
Operating income
Operating income ratio
111
272
111
34103816794
720013
21520358265
1080019
30735358873
1240006
33767379068
1630074
43242072683
2450002
61935359929
272
66
Sheet1
11
2014 results
V-2 Plan targets
V-2 Plan results
Net Sales yen3673bn yen4000bn yen4104bn
Operating Income
yen124bn yen200bn yen272bn
Operating Income Ratio
34 50 66
R O E 62 10or higher
122
ＢＥＰ 93 90or lower
88
Achieved All V-2 Plan Targets Medium-Term Management Plan Results
12
Medium-Term Management Plan Results Continued to bolster the launch and
cultivation of high-value-added products
13
Strengthen RampD base
Overseas business reorganization
Enhance production capacity
Chemical business reorganization
Strengthen lsquofood with function claims
New business development
Strengthening business base for continued growth
Medium-Term Management Plan Results
Background of Setting New Management Vision
15
Rapid advance of AI and IoT Emergence of various business platforms Change in distribution and logistics systems due to e-commerce channels Expansion in sharing businesses
Acceleration of rapidly aging society Rise in healthcare awareness Emergence of the millennial generation Diversification of work environments and styles
Drastic changes in the external environment
16
Viewing these changes as our
greatest opportunities Shift gears
Clarify the orientation
of the Lion Grouprsquos business
Acceleration of growth-focused transformation
New Management Vision
18
19
Inspiration for the New Management Vision
20
Medium-Term Management Plan
ＬＩＶＥ Plan (ＬION Value Evolution Plan)
21
22
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Percentage of NONIO mouthwash customers who have not bought mouthwash in the past 6 months
Ages
7
Detergent for Institutional Use category Sales of detergents for food processing plants 176
Industrial Products Business Topics
Vegetable washing systems Major convenience store vendor installed new production line
ＭｉＢＯＭｉｃｒｏ Ｂｕｂｂｌｅ Ｏｚｏｎｅ
Fresh MiBO process
8 （ Indonesia １０７）
Thailand 105
Malaysia 108
South Korea 108
China 109
Overseas Business Topics Business growth continued to outpace GDP growth in mainstay countries
FY2017 Net Sales Y-on-Y Change (local currency basis)
9
V-2 Plan Results Quantitative Growth Record-high sales for a fourth consecutive year Consolidated net sales grew 25 from FY2011 Overseas sales doubled
10
()
Record High Operating Income for a Fourth Consecutive Year
V-2 Plan Results Qualitative Growth
Graph1
(Billions of yen)
34
66
Operating income
Operating income ratio
111
272
111
34103816794
720013
21520358265
1080019
30735358873
1240006
33767379068
1630074
43242072683
2450002
61935359929
272
66
Sheet1
11
2014 results
V-2 Plan targets
V-2 Plan results
Net Sales yen3673bn yen4000bn yen4104bn
Operating Income
yen124bn yen200bn yen272bn
Operating Income Ratio
34 50 66
R O E 62 10or higher
122
ＢＥＰ 93 90or lower
88
Achieved All V-2 Plan Targets Medium-Term Management Plan Results
12
Medium-Term Management Plan Results Continued to bolster the launch and
cultivation of high-value-added products
13
Strengthen RampD base
Overseas business reorganization
Enhance production capacity
Chemical business reorganization
Strengthen lsquofood with function claims
New business development
Strengthening business base for continued growth
Medium-Term Management Plan Results
Background of Setting New Management Vision
15
Rapid advance of AI and IoT Emergence of various business platforms Change in distribution and logistics systems due to e-commerce channels Expansion in sharing businesses
Acceleration of rapidly aging society Rise in healthcare awareness Emergence of the millennial generation Diversification of work environments and styles
Drastic changes in the external environment
16
Viewing these changes as our
greatest opportunities Shift gears
Clarify the orientation
of the Lion Grouprsquos business
Acceleration of growth-focused transformation
New Management Vision
18
19
Inspiration for the New Management Vision
20
Medium-Term Management Plan
ＬＩＶＥ Plan (ＬION Value Evolution Plan)
21
22
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Percentage of NONIO mouthwash customers who have not bought mouthwash in the past 6 months
Ages
7
Detergent for Institutional Use category Sales of detergents for food processing plants 176
Industrial Products Business Topics
Vegetable washing systems Major convenience store vendor installed new production line
ＭｉＢＯＭｉｃｒｏ Ｂｕｂｂｌｅ Ｏｚｏｎｅ
Fresh MiBO process
8 （ Indonesia １０７）
Thailand 105
Malaysia 108
South Korea 108
China 109
Overseas Business Topics Business growth continued to outpace GDP growth in mainstay countries
FY2017 Net Sales Y-on-Y Change (local currency basis)
9
V-2 Plan Results Quantitative Growth Record-high sales for a fourth consecutive year Consolidated net sales grew 25 from FY2011 Overseas sales doubled
10
()
Record High Operating Income for a Fourth Consecutive Year
V-2 Plan Results Qualitative Growth
Graph1
(Billions of yen)
34
66
Operating income
Operating income ratio
111
272
111
34103816794
720013
21520358265
1080019
30735358873
1240006
33767379068
1630074
43242072683
2450002
61935359929
272
66
Sheet1
11
2014 results
V-2 Plan targets
V-2 Plan results
Net Sales yen3673bn yen4000bn yen4104bn
Operating Income
yen124bn yen200bn yen272bn
Operating Income Ratio
34 50 66
R O E 62 10or higher
122
ＢＥＰ 93 90or lower
88
Achieved All V-2 Plan Targets Medium-Term Management Plan Results
12
Medium-Term Management Plan Results Continued to bolster the launch and
cultivation of high-value-added products
13
Strengthen RampD base
Overseas business reorganization
Enhance production capacity
Chemical business reorganization
Strengthen lsquofood with function claims
New business development
Strengthening business base for continued growth
Medium-Term Management Plan Results
Background of Setting New Management Vision
15
Rapid advance of AI and IoT Emergence of various business platforms Change in distribution and logistics systems due to e-commerce channels Expansion in sharing businesses
Acceleration of rapidly aging society Rise in healthcare awareness Emergence of the millennial generation Diversification of work environments and styles
Drastic changes in the external environment
16
Viewing these changes as our
greatest opportunities Shift gears
Clarify the orientation
of the Lion Grouprsquos business
Acceleration of growth-focused transformation
New Management Vision
18
19
Inspiration for the New Management Vision
20
Medium-Term Management Plan
ＬＩＶＥ Plan (ＬION Value Evolution Plan)
21
22
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Percentage of NONIO mouthwash customers who have not bought mouthwash in the past 6 months
Ages
7
Detergent for Institutional Use category Sales of detergents for food processing plants 176
Industrial Products Business Topics
Vegetable washing systems Major convenience store vendor installed new production line
ＭｉＢＯＭｉｃｒｏ Ｂｕｂｂｌｅ Ｏｚｏｎｅ
Fresh MiBO process
8 （ Indonesia １０７）
Thailand 105
Malaysia 108
South Korea 108
China 109
Overseas Business Topics Business growth continued to outpace GDP growth in mainstay countries
FY2017 Net Sales Y-on-Y Change (local currency basis)
9
V-2 Plan Results Quantitative Growth Record-high sales for a fourth consecutive year Consolidated net sales grew 25 from FY2011 Overseas sales doubled
10
()
Record High Operating Income for a Fourth Consecutive Year
V-2 Plan Results Qualitative Growth
Graph1
(Billions of yen)
34
66
Operating income
Operating income ratio
111
272
111
34103816794
720013
21520358265
1080019
30735358873
1240006
33767379068
1630074
43242072683
2450002
61935359929
272
66
Sheet1
11
2014 results
V-2 Plan targets
V-2 Plan results
Net Sales yen3673bn yen4000bn yen4104bn
Operating Income
yen124bn yen200bn yen272bn
Operating Income Ratio
34 50 66
R O E 62 10or higher
122
ＢＥＰ 93 90or lower
88
Achieved All V-2 Plan Targets Medium-Term Management Plan Results
12
Medium-Term Management Plan Results Continued to bolster the launch and
cultivation of high-value-added products
13
Strengthen RampD base
Overseas business reorganization
Enhance production capacity
Chemical business reorganization
Strengthen lsquofood with function claims
New business development
Strengthening business base for continued growth
Medium-Term Management Plan Results
Background of Setting New Management Vision
15
Rapid advance of AI and IoT Emergence of various business platforms Change in distribution and logistics systems due to e-commerce channels Expansion in sharing businesses
Acceleration of rapidly aging society Rise in healthcare awareness Emergence of the millennial generation Diversification of work environments and styles
Drastic changes in the external environment
16
Viewing these changes as our
greatest opportunities Shift gears
Clarify the orientation
of the Lion Grouprsquos business
Acceleration of growth-focused transformation
New Management Vision
18
19
Inspiration for the New Management Vision
20
Medium-Term Management Plan
ＬＩＶＥ Plan (ＬION Value Evolution Plan)
21
22
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Percentage of NONIO mouthwash customers who have not bought mouthwash in the past 6 months
Ages
7
Detergent for Institutional Use category Sales of detergents for food processing plants 176
Industrial Products Business Topics
Vegetable washing systems Major convenience store vendor installed new production line
ＭｉＢＯＭｉｃｒｏ Ｂｕｂｂｌｅ Ｏｚｏｎｅ
Fresh MiBO process
8 （ Indonesia １０７）
Thailand 105
Malaysia 108
South Korea 108
China 109
Overseas Business Topics Business growth continued to outpace GDP growth in mainstay countries
FY2017 Net Sales Y-on-Y Change (local currency basis)
9
V-2 Plan Results Quantitative Growth Record-high sales for a fourth consecutive year Consolidated net sales grew 25 from FY2011 Overseas sales doubled
10
()
Record High Operating Income for a Fourth Consecutive Year
V-2 Plan Results Qualitative Growth
Graph1
(Billions of yen)
34
66
Operating income
Operating income ratio
111
272
111
34103816794
720013
21520358265
1080019
30735358873
1240006
33767379068
1630074
43242072683
2450002
61935359929
272
66
Sheet1
11
2014 results
V-2 Plan targets
V-2 Plan results
Net Sales yen3673bn yen4000bn yen4104bn
Operating Income
yen124bn yen200bn yen272bn
Operating Income Ratio
34 50 66
R O E 62 10or higher
122
ＢＥＰ 93 90or lower
88
Achieved All V-2 Plan Targets Medium-Term Management Plan Results
12
Medium-Term Management Plan Results Continued to bolster the launch and
cultivation of high-value-added products
13
Strengthen RampD base
Overseas business reorganization
Enhance production capacity
Chemical business reorganization
Strengthen lsquofood with function claims
New business development
Strengthening business base for continued growth
Medium-Term Management Plan Results
Background of Setting New Management Vision
15
Rapid advance of AI and IoT Emergence of various business platforms Change in distribution and logistics systems due to e-commerce channels Expansion in sharing businesses
Acceleration of rapidly aging society Rise in healthcare awareness Emergence of the millennial generation Diversification of work environments and styles
Drastic changes in the external environment
16
Viewing these changes as our
greatest opportunities Shift gears
Clarify the orientation
of the Lion Grouprsquos business
Acceleration of growth-focused transformation
New Management Vision
18
19
Inspiration for the New Management Vision
20
Medium-Term Management Plan
ＬＩＶＥ Plan (ＬION Value Evolution Plan)
21
22
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Detergent for Institutional Use category Sales of detergents for food processing plants 176
Industrial Products Business Topics
Vegetable washing systems Major convenience store vendor installed new production line
ＭｉＢＯＭｉｃｒｏ Ｂｕｂｂｌｅ Ｏｚｏｎｅ
Fresh MiBO process
8 （ Indonesia １０７）
Thailand 105
Malaysia 108
South Korea 108
China 109
Overseas Business Topics Business growth continued to outpace GDP growth in mainstay countries
FY2017 Net Sales Y-on-Y Change (local currency basis)
9
V-2 Plan Results Quantitative Growth Record-high sales for a fourth consecutive year Consolidated net sales grew 25 from FY2011 Overseas sales doubled
10
()
Record High Operating Income for a Fourth Consecutive Year
V-2 Plan Results Qualitative Growth
Graph1
(Billions of yen)
34
66
Operating income
Operating income ratio
111
272
111
34103816794
720013
21520358265
1080019
30735358873
1240006
33767379068
1630074
43242072683
2450002
61935359929
272
66
Sheet1
11
2014 results
V-2 Plan targets
V-2 Plan results
Net Sales yen3673bn yen4000bn yen4104bn
Operating Income
yen124bn yen200bn yen272bn
Operating Income Ratio
34 50 66
R O E 62 10or higher
122
ＢＥＰ 93 90or lower
88
Achieved All V-2 Plan Targets Medium-Term Management Plan Results
12
Medium-Term Management Plan Results Continued to bolster the launch and
cultivation of high-value-added products
13
Strengthen RampD base
Overseas business reorganization
Enhance production capacity
Chemical business reorganization
Strengthen lsquofood with function claims
New business development
Strengthening business base for continued growth
Medium-Term Management Plan Results
Background of Setting New Management Vision
15
Rapid advance of AI and IoT Emergence of various business platforms Change in distribution and logistics systems due to e-commerce channels Expansion in sharing businesses
Acceleration of rapidly aging society Rise in healthcare awareness Emergence of the millennial generation Diversification of work environments and styles
Drastic changes in the external environment
16
Viewing these changes as our
greatest opportunities Shift gears
Clarify the orientation
of the Lion Grouprsquos business
Acceleration of growth-focused transformation
New Management Vision
18
19
Inspiration for the New Management Vision
20
Medium-Term Management Plan
ＬＩＶＥ Plan (ＬION Value Evolution Plan)
21
22
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Overseas Business Topics Business growth continued to outpace GDP growth in mainstay countries
FY2017 Net Sales Y-on-Y Change (local currency basis)
9
V-2 Plan Results Quantitative Growth Record-high sales for a fourth consecutive year Consolidated net sales grew 25 from FY2011 Overseas sales doubled
10
()
Record High Operating Income for a Fourth Consecutive Year
V-2 Plan Results Qualitative Growth
Graph1
(Billions of yen)
34
66
Operating income
Operating income ratio
111
272
111
34103816794
720013
21520358265
1080019
30735358873
1240006
33767379068
1630074
43242072683
2450002
61935359929
272
66
Sheet1
11
2014 results
V-2 Plan targets
V-2 Plan results
Net Sales yen3673bn yen4000bn yen4104bn
Operating Income
yen124bn yen200bn yen272bn
Operating Income Ratio
34 50 66
R O E 62 10or higher
122
ＢＥＰ 93 90or lower
88
Achieved All V-2 Plan Targets Medium-Term Management Plan Results
12
Medium-Term Management Plan Results Continued to bolster the launch and
cultivation of high-value-added products
13
Strengthen RampD base
Overseas business reorganization
Enhance production capacity
Chemical business reorganization
Strengthen lsquofood with function claims
New business development
Strengthening business base for continued growth
Medium-Term Management Plan Results
Background of Setting New Management Vision
15
Rapid advance of AI and IoT Emergence of various business platforms Change in distribution and logistics systems due to e-commerce channels Expansion in sharing businesses
Acceleration of rapidly aging society Rise in healthcare awareness Emergence of the millennial generation Diversification of work environments and styles
Drastic changes in the external environment
16
Viewing these changes as our
greatest opportunities Shift gears
Clarify the orientation
of the Lion Grouprsquos business
Acceleration of growth-focused transformation
New Management Vision
18
19
Inspiration for the New Management Vision
20
Medium-Term Management Plan
ＬＩＶＥ Plan (ＬION Value Evolution Plan)
21
22
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
V-2 Plan Results Quantitative Growth Record-high sales for a fourth consecutive year Consolidated net sales grew 25 from FY2011 Overseas sales doubled
10
()
Record High Operating Income for a Fourth Consecutive Year
V-2 Plan Results Qualitative Growth
Graph1
(Billions of yen)
34
66
Operating income
Operating income ratio
111
272
111
34103816794
720013
21520358265
1080019
30735358873
1240006
33767379068
1630074
43242072683
2450002
61935359929
272
66
Sheet1
11
2014 results
V-2 Plan targets
V-2 Plan results
Net Sales yen3673bn yen4000bn yen4104bn
Operating Income
yen124bn yen200bn yen272bn
Operating Income Ratio
34 50 66
R O E 62 10or higher
122
ＢＥＰ 93 90or lower
88
Achieved All V-2 Plan Targets Medium-Term Management Plan Results
12
Medium-Term Management Plan Results Continued to bolster the launch and
cultivation of high-value-added products
13
Strengthen RampD base
Overseas business reorganization
Enhance production capacity
Chemical business reorganization
Strengthen lsquofood with function claims
New business development
Strengthening business base for continued growth
Medium-Term Management Plan Results
Background of Setting New Management Vision
15
Rapid advance of AI and IoT Emergence of various business platforms Change in distribution and logistics systems due to e-commerce channels Expansion in sharing businesses
Acceleration of rapidly aging society Rise in healthcare awareness Emergence of the millennial generation Diversification of work environments and styles
Drastic changes in the external environment
16
Viewing these changes as our
greatest opportunities Shift gears
Clarify the orientation
of the Lion Grouprsquos business
Acceleration of growth-focused transformation
New Management Vision
18
19
Inspiration for the New Management Vision
20
Medium-Term Management Plan
ＬＩＶＥ Plan (ＬION Value Evolution Plan)
21
22
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Record High Operating Income for a Fourth Consecutive Year
V-2 Plan Results Qualitative Growth
Graph1
(Billions of yen)
34
66
Operating income
Operating income ratio
111
272
111
34103816794
720013
21520358265
1080019
30735358873
1240006
33767379068
1630074
43242072683
2450002
61935359929
272
66
Sheet1
11
2014 results
V-2 Plan targets
V-2 Plan results
Net Sales yen3673bn yen4000bn yen4104bn
Operating Income
yen124bn yen200bn yen272bn
Operating Income Ratio
34 50 66
R O E 62 10or higher
122
ＢＥＰ 93 90or lower
88
Achieved All V-2 Plan Targets Medium-Term Management Plan Results
12
Medium-Term Management Plan Results Continued to bolster the launch and
cultivation of high-value-added products
13
Strengthen RampD base
Overseas business reorganization
Enhance production capacity
Chemical business reorganization
Strengthen lsquofood with function claims
New business development
Strengthening business base for continued growth
Medium-Term Management Plan Results
Background of Setting New Management Vision
15
Rapid advance of AI and IoT Emergence of various business platforms Change in distribution and logistics systems due to e-commerce channels Expansion in sharing businesses
Acceleration of rapidly aging society Rise in healthcare awareness Emergence of the millennial generation Diversification of work environments and styles
Drastic changes in the external environment
16
Viewing these changes as our
greatest opportunities Shift gears
Clarify the orientation
of the Lion Grouprsquos business
Acceleration of growth-focused transformation
New Management Vision
18
19
Inspiration for the New Management Vision
20
Medium-Term Management Plan
ＬＩＶＥ Plan (ＬION Value Evolution Plan)
21
22
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Achieved All V-2 Plan Targets Medium-Term Management Plan Results
12
Medium-Term Management Plan Results Continued to bolster the launch and
cultivation of high-value-added products
13
Strengthen RampD base
Overseas business reorganization
Enhance production capacity
Chemical business reorganization
Strengthen lsquofood with function claims
New business development
Strengthening business base for continued growth
Medium-Term Management Plan Results
Background of Setting New Management Vision
15
Rapid advance of AI and IoT Emergence of various business platforms Change in distribution and logistics systems due to e-commerce channels Expansion in sharing businesses
Acceleration of rapidly aging society Rise in healthcare awareness Emergence of the millennial generation Diversification of work environments and styles
Drastic changes in the external environment
16
Viewing these changes as our
greatest opportunities Shift gears
Clarify the orientation
of the Lion Grouprsquos business
Acceleration of growth-focused transformation
New Management Vision
18
19
Inspiration for the New Management Vision
20
Medium-Term Management Plan
ＬＩＶＥ Plan (ＬION Value Evolution Plan)
21
22
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Achieved All V-2 Plan Targets Medium-Term Management Plan Results
12
Medium-Term Management Plan Results Continued to bolster the launch and
cultivation of high-value-added products
13
Strengthen RampD base
Overseas business reorganization
Enhance production capacity
Chemical business reorganization
Strengthen lsquofood with function claims
New business development
Strengthening business base for continued growth
Medium-Term Management Plan Results
Background of Setting New Management Vision
15
Rapid advance of AI and IoT Emergence of various business platforms Change in distribution and logistics systems due to e-commerce channels Expansion in sharing businesses
Acceleration of rapidly aging society Rise in healthcare awareness Emergence of the millennial generation Diversification of work environments and styles
Drastic changes in the external environment
16
Viewing these changes as our
greatest opportunities Shift gears
Clarify the orientation
of the Lion Grouprsquos business
Acceleration of growth-focused transformation
New Management Vision
18
19
Inspiration for the New Management Vision
20
Medium-Term Management Plan
ＬＩＶＥ Plan (ＬION Value Evolution Plan)
21
22
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Achieved All V-2 Plan Targets Medium-Term Management Plan Results
12
Medium-Term Management Plan Results Continued to bolster the launch and
cultivation of high-value-added products
13
Strengthen RampD base
Overseas business reorganization
Enhance production capacity
Chemical business reorganization
Strengthen lsquofood with function claims
New business development
Strengthening business base for continued growth
Medium-Term Management Plan Results
Background of Setting New Management Vision
15
Rapid advance of AI and IoT Emergence of various business platforms Change in distribution and logistics systems due to e-commerce channels Expansion in sharing businesses
Acceleration of rapidly aging society Rise in healthcare awareness Emergence of the millennial generation Diversification of work environments and styles
Drastic changes in the external environment
16
Viewing these changes as our
greatest opportunities Shift gears
Clarify the orientation
of the Lion Grouprsquos business
Acceleration of growth-focused transformation
New Management Vision
18
19
Inspiration for the New Management Vision
20
Medium-Term Management Plan
ＬＩＶＥ Plan (ＬION Value Evolution Plan)
21
22
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Medium-Term Management Plan Results Continued to bolster the launch and
cultivation of high-value-added products
13
Strengthen RampD base
Overseas business reorganization
Enhance production capacity
Chemical business reorganization
Strengthen lsquofood with function claims
New business development
Strengthening business base for continued growth
Medium-Term Management Plan Results
Background of Setting New Management Vision
15
Rapid advance of AI and IoT Emergence of various business platforms Change in distribution and logistics systems due to e-commerce channels Expansion in sharing businesses
Acceleration of rapidly aging society Rise in healthcare awareness Emergence of the millennial generation Diversification of work environments and styles
Drastic changes in the external environment
16
Viewing these changes as our
greatest opportunities Shift gears
Clarify the orientation
of the Lion Grouprsquos business
Acceleration of growth-focused transformation
New Management Vision
18
19
Inspiration for the New Management Vision
20
Medium-Term Management Plan
ＬＩＶＥ Plan (ＬION Value Evolution Plan)
21
22
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Rapid advance of AI and IoT Emergence of various business platforms Change in distribution and logistics systems due to e-commerce channels Expansion in sharing businesses
Acceleration of rapidly aging society Rise in healthcare awareness Emergence of the millennial generation Diversification of work environments and styles
Drastic changes in the external environment
16
Viewing these changes as our
greatest opportunities Shift gears
Clarify the orientation
of the Lion Grouprsquos business
Acceleration of growth-focused transformation
New Management Vision
18
19
Inspiration for the New Management Vision
20
Medium-Term Management Plan
ＬＩＶＥ Plan (ＬION Value Evolution Plan)
21
22
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Rapid advance of AI and IoT Emergence of various business platforms Change in distribution and logistics systems due to e-commerce channels Expansion in sharing businesses
Acceleration of rapidly aging society Rise in healthcare awareness Emergence of the millennial generation Diversification of work environments and styles
Drastic changes in the external environment
16
Viewing these changes as our
greatest opportunities Shift gears
Clarify the orientation
of the Lion Grouprsquos business
Acceleration of growth-focused transformation
New Management Vision
18
19
Inspiration for the New Management Vision
20
Medium-Term Management Plan
ＬＩＶＥ Plan (ＬION Value Evolution Plan)
21
22
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Rapid advance of AI and IoT Emergence of various business platforms Change in distribution and logistics systems due to e-commerce channels Expansion in sharing businesses
Acceleration of rapidly aging society Rise in healthcare awareness Emergence of the millennial generation Diversification of work environments and styles
Drastic changes in the external environment
16
Viewing these changes as our
greatest opportunities Shift gears
Clarify the orientation
of the Lion Grouprsquos business
Acceleration of growth-focused transformation
New Management Vision
18
19
Inspiration for the New Management Vision
20
Medium-Term Management Plan
ＬＩＶＥ Plan (ＬION Value Evolution Plan)
21
22
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
1 Expand and Evolve Our Business Domains through New Value Creation
Creating new combinations of various technologies and services we will create new business value that realizes ldquohealthy minds and bodies for all
23
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
1 Expand and Evolve Our Business Domains through New Value Creation
Oralndashto- Body Solution Aiming for expansion and evolution that will create an ldquooral health
care businessrdquo in which oral care contributes to whole-body health care
Daily SelfndashCare Enhancement Working toward evolution aimed at creating a health care business that will in turn ldquoReDesignrdquo daily living to create healthful habits
that help enhance QOL
Infotech Health Support Creating new health care business models that leverage cutting-edge technologies
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
2 Accelerate Growth in Overseas Businesses through Glocalization Focusing on growing markets in Asia we will integrate globalization and localization approaches to create unique competitive advantages and thereby expand the scale of our businesses and the areas in which we operate
北東アジア
東南アジア
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
2 Accelerate Growth in Overseas Businesses through Glocalization
Evolving Group management by reinforcing regional management
Aiming for business area expansion
based on e-commerce channels and MampA
26
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
3 Reinforce Our Management Base through Business Structure Reform
By improving management infrastructure and revising the business portfolio to stay ahead of changes in the environment we will reinforce our management base to enable sustainable business growth
27
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
3 Reinforce Our Management Base through Business Structure Reform
Reinforce manufacturing infrastructure
Build supply
chains
Reinforce information
system foundations
Improve efficiency of management resources and
business activities
28
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
We aim to foster corporate strength that will win out over global competition by promoting diversity and openness in our human resources organizations and corporate culture
4 Create Dynamism to Foster Innovative Change
29
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Creating human dynamism by utilizing diverse human
resources
Creating organizational dynamism through
open innovation
Creating management dynamism
through ESG initiatives and reinforcement of health and productivity management
4 Create Dynamism to Foster Innovative Change
30
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Plans Call for yen100 Billion in Investments during the Three Years
LIVE Plan Investment Plan
Reinforce
management foundations
Acquire growth businesses
ＭＡ
New Businesses
ＲＤ
Facilities and Infrastructure
31
FY2020 Avg yearly growth rate IFRS (JGAAP)
Net Sales yen4000 bn yen4700 bn 52
Core Operating Income yen400 bn 116
Operating Profit yen400 bn yen405 bn 95
Operating Profit Ratio
10 86
Profit Attributable to Owners of Parent
yen280 bn yen285 bn 104
R O E 12 level
LIVE Plan Numerical Targets (IFRS)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Core operating income An earnings indicator that measures regular business performance by subtracting selling general and administrative expenses from gross profit
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Overseas sales ratio +15P Enter new areas and categories Create new business
Make business activities more efficient
Reduce costs by yen50 bn Reduce inventory days by 30
Reinforce ESG initiatives
E Achieve environmental targets S Manage health and productivity G Reinforce governance
Extension of healthy life expectancy Ensuring peoplersquos well being every day
2020 KPIs (vs 2017)
Health Comfort Clean-liness
Accelerate Growth in Overseas Businesses through Glocalization
Create Dynamism to Foster Innovative Change
Reinforce Our Management Base through Business Structure Reform
Expand and Evolve Our Business Domains through New Value Creation
Becoming an Advanced Daily Healthcare Company The Lion Group realizes ldquohealthy minds and bodies for allrdquo through the ldquoReDesignrdquoof the everyday rituals
to become more natural easy and enjoyable
Creation of
Shared Value
＜Contributions to the SDGs＞
＜Business Domains＞
Net sales (billions of yen)
34
2018 Consolidated Financial Forecast (IFRS)
2018 2017 Y-on Y Change Amount
Net Sales 3550 3430 119 35
Core Operating Income
290 287 02 07
Operating Profit of sales
330 (93)
304 (89)
25
83
Profit Attributable to Owners of Parent
250 207 42 202
Basic EPS (yen) 8603 7156 1447 202
（Billions of yen）
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
2017 IFRS results are estimates and have not been audited by a corporate auditor
35
【 External net sales 】
2018 Net Sales Forecast by Segment (IFRS)
2018 2017 Y-on Y Change Amount
Consumer Products 2230 2151 78 37
Industrial Products 330 326 03 12
Overseas 950 911 38 43
Other 40 40 (00) (24)
Subtotal 3550 3429 120 35
Consolidated Total 3550 3430 119 35
(Billions of yen)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
2017 IFRS results are estimates and have not been audited by a corporate auditor
36
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
FY2018 Initiatives ①Expand and Evolve Our Business Domains through New Value Creation Expand the preventive dentistry support business and businesses in peripheral fields ② Accelerate Growth in Overseas Businesses through Glocalization
Expand business through e-commerce channels and enter new areas
③ Reinforce Our Management Base through Business Structure Reform
Boost production capacity and build a sustainable supply chain
④ Create Dynamism to Foster Innovative Change Establish new Innovation Laboratories and build a Lion-style health and productivity management model
37
Shareholder Returns
yen13 yen17
yen20
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Lion is planning an annual dividend of yen20 per share for FY2018 up yen3 year on year
Our Stance on Dividends Ensure stable and sustainable returns
Year-end dividend Interim dividend
forecast
yen10
A New LION Is Beginning to
Make Its Move
40
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
The forecasts and projected operating results contained in this
report are based on information available at the time of
preparation and thus involve inherent risks and uncertainties
Accordingly readers are cautioned that actual results may differ
materially from those projected as a result of a variety of factors
Note Figures are rounded down to the digits that are displayed
41
Reference Materials
42
Consolidated Statements of Income
2017 2016 Y-on-Y change
Amount
Net Sales 4104 3956 148 38
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Cost of sales 1712 1619 92 57 Gross Profit 2392 2336 56 24 Selling general and administrative expenses
2120 2091 29 14
Operating Income 272 245 27 110 Non-operating income 26 22 03 145 Non-operating expenses 06 04 01 400 Ordinary Income 291 262 28 108 Extraordinary income 24 00 24 75882 Extraordinary expenses 10 22 (12) (562) Profit before Income Taxes 305 240 65 271
Income taxes ndash current 76 73 02 39
Income taxes ndash deferred 06 (06) 13 - Profit 223 174 49 283 Profit Attributable to Owners of Parent
198 159 38 243
(Billions of yen)
43
Selling General and Administrative Expenses
2017 2016 Y-on-Y change
Billions of yen
of sales
Billions of yen
of sales
Amount
Selling general and administrative expenses
2120 517 2091 529 29 14
Sales commission expenses 90 22 86 22 03 45
Promotion expenses 907 221 901 228 06 08
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Provision for promotion expenses 29 07 20 05 08 421
Advertising expenses 299 73 309 78 (10) (33)
Transportation and warehousing expenses 186 45 178 45 08 46
Salaries and allowances 150 37 147 37 03 21
Research and development expenses 104 26 100 25 03 39
Other 351 86 347 88 04 14
44
Significant Extraordinary Income or Loss
2017 2016 Extraordinary
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
income Gain on disposal of noncurrent assets 20 Gain on disposal of
noncurrent assets ndash
Gain on sales of investment securities 03 Gain on sales of investment
securities 00
Total 24 Total 00
Extraordinary expenses
Loss on disposal of noncurrent assets 03 Loss on disposal of
noncurrent assets 05
Impairment loss 06 Impairment loss 11
Other ndash Other 06
Total 10 Total 22
(Billions of yen)
45
Balance Sheets (Selected)Ⅰ
2017 2016 Change
Current assets 2034 1854 180
Cash and deposits 237 178 59
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Notes and accounts Receivable ndash trade 641 602 38
Short-term investments 692 610 82
Inventories 402 397 04
Noncurrent assets 1282 1130 152
Property plant and equipment 809 744 65
Intangible assets 16 28 (11)
Investments and other assets 455 358 97
Total assets 3317 2985 332
(Billions of yen)
46
Balance Sheets (Selected)Ⅱ
2017 2016 Change
Current liabilities 1272 1234 37
Notes and accounts payable ndash trade 543 509 34
Short-term loans payable 37 42 (04)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Current portion of long-term loans payable 02 02 00 Accounts payable ndash other and accrued expenses 501 519 (18)
Noncurrent liabilities 175 171 03
Long-term loans payable 15 16 (01)
Liability for retirement benefits 72 104 (31)
Total net assets 1870 1578 291
Capital surplus 353 345 08
Retained earnings 979 824 154
Treasury stock (55) (47) (08)
Accumulated other comprehensive income 144 26 118
Total liability and net assets 3317 2985 332
(Billions of yen)
47
Consolidated Cash Flow
2017 2016 Change
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Net cash provided by (used in) operating activities 285 322 (37)
Net cash provided by (used in) investment activities (87) (78) (09)
Net cash provided by (used in) financing activities (67) (74) 06
Effect of exchange rate change on cash and cash equivalents 06 (05) 11
Net increase (decrease) in cash and cash equivalents 136 164 (27)
Cash and cash equivalents at beginning of period 777 612 164
Cash and cash equivalents at end of period 914 777 136
(Billions of yen)
48
Results by Business Segment
Net Sales Segment Income (operating income)
2017 Y-on-Y change
2017 Y-on-Y change
Amount Amount
Consumer Products
2908 38 13 189 31 197
2648 35 13
Industrial Products
557 14 26 23 (02) (95)
333 19 61
Overseas 1200 91 83
44 (01) (33) 1082 89 90
Other 305 36 138
13 04 461 40 04 132
Subtotal 4973 181 38 270 31 132 Consolidated
total 4104 148 38 272 27 110
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Upper line Sales Lower line Sales to external customers Operating income Subtotal represents segment income before offsetting inter-company transactions consolidated total represents consolidated segment income
(Billions of yen)
49
【Net Sales】
2017 2016 Y-on-Y change Amount
Oral Care 682 635 46 74
Beauty Care 245 223 22 99
Fabric Care 795 802 (06) (09)
Living Care 207 207 00 01
Pharmaceutical 390 409 (19) (47)
Other 587 591 (04) (07)
Total 2908 2870 38 13
Sales Results by Products Category
(Billions of yen)
50
【Net Sales】
Overseas Sales Results by Region
2017 2016 Y-on-Y change
Amount
Southeast Asia 832 755 77 102
Northeast Asia 368 353 14 41
Total 1200 1109 91 83
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Southeast Asia Thailand Malaysia Singapore Indonesia (PT IPPOSHA INDONESIA) Northeast Asia South Korea China Taiwan and Hong Kong
(Billions of yen)
51
2012 2013 2014 2015 2016 2017
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Sales value 101 102 102 103 104 99 Unit sales 102 102 100 100 102 98 Average unit price 99 100 102 102 102 102
Market Environment for Home Products (38 markets SRI)
Source INTAGE Inc SRI Survey (Year-on-year data for 2012 is for the 42 such markets in which Lion operates data for 2013 and 2014 is for 40 data for 2015 is for 39 data for 2016 is for 38)
Market Environment for Home Products (15 markets SCI)
2016 2017
Sales value 105 103 Unit sales 101 101 Average unit price 104 102
Overall market trend for the 38 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Overall market trend for the 15 home product markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey The SRI survey uses point-of-sales data from around 3000 stores nationwide for its estimates The SCI survey monitors around 50000 shoppers nationwide for its sales data
Changes in Home Products Market
52
Changes in OTC Drug Markets
2012 2013 2014 2015 2016 2017
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
Sales value 98 99 100 102 101 100 Unit sales 99 99 98 101 100 98
Average unit price 99 100 102 101 101 102
2016 2017
Sales value 104 103 Unit sales 102 100
Average unit price 102 103
Market Environment for OTC Drug Market (8 markets SDI) Overall market trend for the 8 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SDI Survey
Market Environment for OTC Drug Market (2 markets SCI) Overall market trend for the 2 drug markets in which Lion participates (Percentage change from the corresponding period of the previous year)
Source INTAGE Inc SCI Survey
53
2017 Consolidated ProfitLoss Results (differences in accounting standards)
