Unicharm Corporation · TSE:8113

Unicharm — Q3 2021 Earnings Presentation

47 slides from Unicharm's earnings presentation, Nov 5, 2021

1. Slide 1: Third Quarter of Fiscal Year Ending December 31, 2021 Investor Meeting

   Third Quarter of Fiscal Year Ending December 31, 2021 (Jan 1, 2021 to Sep 30, 2021) Unicharm Investor Meeting Presentation Materials November 5, 2021 Takahisa Takahara President and CEO Unicharm Corporation Copyright (c) 2012 Unicharm Corporation. All rights reserved.

2. Slide 2: Financial Performance Summary

   Third Quarter of Fiscal Year Ending December 31, 2021 (January 1, 2021 to September 30, 2021) Financial Performance Summary Projections stated in these materials include those based on the Company’s currently obtained assumptions, forecasts and plans regarding the future. Therefore, actual results m

3. Slide 3: Financial Results Summary

   Third Quarter of Fiscal Year Ending December 31, 2021 (January 1, 2021 to September 30, 2021) Financial Results Summary Sales 571.9 billion JPY (YoY +7.0%) Consolidated Core operating income 97.4 billion JPY (YoY +9.3%)  Sales hit record high for fourth consecutive year. Core operating income margi

4. Slide 4: 3Q Cumulative achieved a new record high

   3Q Cumulative achieved a new record high  Consolidated account highlights (100 millions of yen) 3Q of FY 3Q of FY (from Jan. to Sep.) Ended Dec. Ending Dec. gap(yen) gap (%) (Forecast) FY Ending Achievement (%) 31, 2020 31, 2021 Dec.31,2021 Net sales 5,345 5,719 +374 +7.0% 7,700 74.3% Core operatin

5. Slide 5: Core operating income fluctuation

   Product mix continually improved Profit increased by 8.3 billion yen driven by increased volume from increased sales mainly in China (100 millions of yen)  Core operating income fluctuation (from Jan. to Sep.) 974 891 -2 -28 -41 -29 -32 +64 +151 Sales Logistics Other Materials, Product mix Qty. etc

6. Slide 6: Geographical segment information

   Strong sales in Wellness Care, Pet Care, Feminine Care Business in Japan Strong sales continued in China Recovery trend in South East Asia and India  Geographical segment information (100 million yen) 3Q of 3Q of FY (from Jan. to Sep.) (Ref.) FY Ended Difference Ending Dec. Difference Actual *1 Dec

7. Slide 7: Sales ratio of overseas and Asian markets

   Overseas and Asian markets keep overwhelming sales ratio  Sales ratio of  Sales ratio of overseas markets Asian markets 63.3％ 46.9％ Copyright Copyright (c) (c) Unicharm Corporation. 2012 Unicharm All rights Corporation. reserved. All rights reserved. 7

8. Slide 8: Core operating income margin by geographical segment

   Consolidated core operating income margin hit a record high due to product mix increase like Feminine Care in China  Core operating income margin by geographical segment (from Jan. to Sep. ) Japan Asia Others * Consolidation 22.2% 20.9% 20.3% 20.6% 16.7% 17.0% 16.1% 15.2% 14.3% 13.0% 15.7% 16.1% 13

9. Slide 9: Business Segment Information

   Feminine Care and Baby Care Business led Personal Care Business Strong sales continued in Pet Care Business in Japan and North America Investment increased in Asia  Business Segment Information 3Q of 3Q of (100 million yen) (from Jan. to Sep. ) FY Ended FY Ending gap (yen) gap (%) Dec. 31, Dec.31,

10. Slide 10: Impacts of foreign exchange fluctuations

    Impacts of foreign exchange fluctuations: Approx. 12.9 billion JPY increase in sales and approx. 2.3 billion JPY increase in core operating income  Rate fluctuations by currency （Jan. to Sep. average rate） Currency Exchange rate for 3Q of Exchange rate for 3Q Rate change FY ended December 31, of FY

11. Slide 11: Mid- and long-term strategies and financial goals (2023 and 2030)

    Mid- and long- term strategies and financial goals (2023 and 2030) Copyright (c) Unicharm 2012 Unicharm Corporation. Corporation. All rights All rights reserved. reserved.

12. Slide 12: Outline of key strategies for continuing growth toward 2030

    Outline of key strategies for continuing growth with SDGs as Purpose toward 2030 WC Wellness Care Business PC Pet Care Business • Accelerated expansion in Asia • Premiumization promotion with the care model which has the • Creation of new markets in top share in Japan market North America • Concentr

13. Slide 13: FY2023 Target

    FY2023 Target Overseas New Entry HC market Sales Ratio Achieve 10% market share Key cities in China 2023：65％ （including expansion Top Market Share (2030：70％) to Africa） Ratio of national staff Ratio of female in in management position management position General Manager：65％ Group:30％ Japan ：18％ HQ f

14. Slide 14: Financial Target of Kyo-sei Life Vision 2030

    Financial Target of “Kyo-sei Life Vision 2030 Kyo-Sei Life Vision 2030 Mid-term Management Plan Sales COPM (2021-2023) CAGR ＋6.8% 17% Sales COPM* CAGR＋6.9% 15.5% 2030 2023 Sales Sales 880 billion JPY 1.4 trillion JPY * COMP means core operating income margin Copyright (c) 2012 Unicharm Corporation.

15. Slide 15: Shareholders Return Policy

    Shareholders Return Policy Copyright (c) Unicharm 2012 Unicharm Corporation. Corporation. All rights All rights reserved. reserved.

16. Slide 16: Shareholders return policy

    Through the payment of dividend linking to the business performance and buy-back of our own shares, we are continuing to aim for total return ratio of 50% in 2021  Shareholders return policy (100 million yen) 80% Dividends Purchase of own shares Total return ratio 600 500 60% 50% 400 40% 300 200 20

17. Slide 17: Dividends per share (JPY)

    Dividend per share Plan to increase dividend for 20 consecutive years (36 yen a year)  Dividends per share (JPY) 36 32 28 24 20 16 14.8 12.7 12.73 10.67 11.3 9.3 * '11/3 '12/3 '13/3 '14/3 '14/12 '15/12 '16/12 '17/12 '18/12 '19/12 '20/12 '21/12E * Irregular accounting period of 9 months Copyright (c

18. Slide 18: Share buy-back history

    Purchase of own shares worth 16 billion JPY (3.62 million shares) as initially planned  Share buy-back history 155 160 150 140 140 130 120 110 90 76 80 72 '11/3 '12/3 '13/3 '14/3 '14/12* '15/12 '16/12 '17/12 '18/12 '19/12 '20/12 '21/12E * Irregular accounting period of 9 months Copyright (c) 2012 U

19. Slide 19: Approach to realize a Cohesive Society (Social Inclusion)

    Approach to realize a “Cohesive Society (Social Inclusion)” Copyright (c) Unicharm 2012 Unicharm Corporation. Corporation. All rights All rights reserved. reserved.

20. Slide 20: Kyo-sei Life Vision 2030

    Formulating Med-to-Long Term ESG Objectives “Kyo-sei Life Vision 2030" ◆ 20 key themes with the goal in 2030 20 Copyright (c) 2012 Unicharm Corporation. All rights reserved.

21. Slide 21: 20 key themes of initiatives

    Formulating Med-to-Long Term ESG Objectives “Kyo-sei Life Vision 2030" ◆20 key themes of initiatives to realize “Cohesive Society (Social Inclusion)” • Extension of healthy life expectancy and improvement of QOL • Support for a society where gender and sexual orientation do not restrict Safeguarding

22. Slide 22: Key initiatives, indicators, and target values

    Key initiatives, indicators, and target values ◆Safeguarding the well-being of individuals Target Key initiatives Indicators Target value year Our aim is to provide products and services that contribute to the realization of a society where all people can have a sense of individuality and enjoy thei

23. Slide 23: Support lengthening healthy life expectancy for senior citizens

    (Safeguarding the well-being of each individual) Support “lengthening healthy life expectancy” with products and services for the senior citizens ◆Extension of healthy life expectancy and improvement of QOL Expand toward 2030 Lifree Rehabili-Pants was released in 1995 Rollout of products and service

24. Slide 24: Activities to develop a society where women shine

    (Safeguarding the well-being of each individual) Rollout of activities tailored to national and regional characteristics to develop a society where women shine ◆Support for a society where gender and sexual orientation Expand do not restrict people’s activities toward 2030 Rollout Rollout ofof produ

25. Slide 25: New value proposition tailored to national and regional characteristics

    (Safeguarding the well-being of each individual) New value proposition tailored to national and regional characteristics ◆Easy, comfortable, and convenient feminine ◆Pants-shaped pad that integrates a pad and product to be used along with a regular pad pants, heating napkin featuring warm sensation

26. Slide 26: Support everyday health of partner animals (pets)

    (Safeguarding the well-being of each individual) Support everyday health of partner animals (pets) and the mind of owners with original technology ◆Coexistence with partner animals (pets) Expand toward 2030 Rollout of products and services that enable partner animals (pets) to be welcomed by people

27. Slide 27: Support improvement of childcare environment

    (Safeguarding the well-being of each individual) Support improvement of childcare environment through products and services that eliminate discomfort and create the comfort of babies and parents ◆Improvement of childcare Expand toward 2030 Rollout of products and services that enable happy and healt

28. Slide 28: Capital and business alliance with First Ascent Inc.

    (Safeguarding the well-being of each individual) Capital and business alliance with First Ascent Inc.* to create a moving experience that enables understanding babies’ feelings and comfortably enjoy childrearing ◆Establish partnership with First Ascent inc. to develop disposable baby diaper based on

29. Slide 29: Developed Digital Scrum System to discover customer insights

    (Safeguarding the well-being of each individual) Developed “Digital Scrum System” with the cutting edge digital technology to discover customer insights ◆Observe stability of quality and customer insights by monitoring in real time local cultures, customs, and manufacturing front line ＜Diagram of Di

30. Slide 30: Protect everyday health and support safe and comfortable living

    (Safeguarding the well-being of each individual) Protect everyday health and support safe and comfortable living ◆Improvement of public hygiene Expand toward 2030 Rollout of products and services that enable each one of us to control infection ◆Boost high value-added masks rollout globally ◆Some pro

31. Slide 31: Key initiatives, indicators, and target values

    Key initiatives, indicators, and target values ◆Safeguarding the well-being of society Target Key initiatives Indicators Target value year Our aim is to provide products and services that not only improve the safety, security, and satisfaction of our customers, but also contribute to solving social

32. Slide 32: Innovations to achieve NOLA & DOLA

    (Safeguarding the well-being of society) Rollout of products and services toward the realization of social inclusion so that everyone can lead a healthy and sanitary life comfortably ◆Innovations to achieve “NOLA & DOLA” Expand toward 2030 Rollout of products and services that contribute to liberati

33. Slide 33: Key initiatives, indicators, and target values

    Key initiatives, indicators, and target values ◆Safeguarding the well-being of our planet Target Key initiatives Indicators Target value year Our aim is to provide products and services that are sanitary and convenient, as well as contribute to activities that improve our planet’s environment. Devel

34. Slide 34: Set Eco Plan 2030

    (Safeguarding the well-being of our planet) Set 「Eco Plan 2030」 ◆「“0” waste plastic, “0” CO2 emission, “0” natural forest destruction」 in 2050 Environmental issues Implementation items Baseline 2030 targets 2050 vision year Responding to the Reducing usage in relation to packaging 2019* Per unit of

35. Slide 35: Initiatives for safety and environmental consideration

    (Safeguarding the well-being of our planet) Initiatives for safety and environmental consideration ◆Development of eco-friendly products 2030 Target More than 10 cases Number of products and services that implement 3Rs + 2Rs based on unique approach ◆Products sold in paper package using ◆Products ma

36. Slide 36: Switch factory electric power to green electric power

    (Safeguarding the well-being of our planet) Switch all electric power used at factories to green electric power* aiming to reduce CO2 emission ◆Addressing climate change 2030 Target 100% Percentage of renewable electric power used for business operation ◆Switch to green electric power generated by r

37. Slide 37: Reduce waste disposal cost through recycling used disposable diaper

    (Safeguarding the well-being of our planet) Reduce waste disposal cost and environmental burden through recycling used disposable diaper ◆Expand our line of recycle models 2030 Target More than 10 cases Number of disposable diaper recycling facilities introduced ◆Keep it safe and convenient, toward

38. Slide 38: World's first used disposable diaper recycling using ozone treatment

    (Safeguarding the well-being of our planet) The world’s first* “used disposable diaper recycling using the ozone-treatment technology” ◆Realized the recycling of used disposable diaper by water-soluble crushing, segregating, and washing with ozone treatment Used Superabsorbent dirty disposable polym

39. Slide 39: Demo-project to promote recycling used disposable diaper

    （Safeguarding the well-being of our planet） Demo-project to promote recycling used disposable diaper ◆Promote demo-projects of separate collection of used disposable diapers with municipalities and Odakyu Railway Tokyo ＜Demo-experiment diagram＞ 【Nursing homes, child day care centers, 【Collection】 【R

40. Slide 40: Illustrated guide to recycling Unicharm disposable diapers

    (Safeguarding the well-being of our planet) Released “An illustrated guide to recycling Unicharm disposable diapers” to promote recycling used disposable diapers ◆Explain graphically how used diapers are not garbage with four-step "Study Notes" that can be used as a material of independent research

41. Slide 41: Key initiatives, indicators, and target values: Unicharm Principles

    Key initiatives, indicators, and target values ◆Unicharm Principles Target Key initiatives Indicators Target value year Our aim is to pursue fairness and transparency in order to establish and retain stakeholder trust. Management practices that Maintain and improve ratings by external evaluation Hig

42. Slide 42: Strengthen initiatives toward women empowerment

    (Unicharm Principles) Strengthen initiatives toward women empowerment ◆Promotion of diversity management Percentage of women in management Japan Outside of Japan 2030 Target Over 30% The ratio of female employees in managerial positions by providing various opportunities to female employees ◆Joined

43. Slide 43: Evaluation by external organizations and coordination with them

    Evaluation by external organizations and coordination with them Selected in 4 ESG investment indices of stock composites adopted by GPIF Integrated Index Thematic Index E S G Other SRI Index 43 Copyright (c) 2012 Unicharm Corporation. All rights reserved.

44. Slide 44: Evaluation by external organizations and coordination with them

    Evaluation by external organizations and coordination with them  Science Based Target  JCI  CDP Japan 500 （Japan Climate Initiative）  Rolled out the best practices for advanced group as a startup  In June 2018, the company was member  Obtained A- rating for efforts to certified as the 17th tar

45. Slide 45: Evaluation by external organizations and coordination with them

    Evaluation by external organizations and coordination with them  CoC certification*1 of PEFC  STANDARD100  Sedex Forest Stewardship by OEKO-TEX®  Factories in Thailand, Indonesia, Korea, North America  “Natural moony (tape type)”  Joined as AB member toward the and Japan acquired Japan’s first

46. Slide 46: Evaluation by external organizations and coordination with them

    Evaluation by external organizations and coordination with them  SOMPO Sustainability Index  Won a special prize in ■ Selected as DX Stock 2021 and Environment Sustainable Noteworthy DX companies 2021 Corporate category of the 2nd ESG Finance Awards  Developed “digital scrum system” that Japan en

47. Slide 47: We support the Sustainable Development Goals (SDGs)

    We support the Sustainable Development Goals (SDGs) Copyright Copyright (c) (c) Unicharm Corporation. 2012 Unicharm All rights Corporation. reserved. All rights reserved. 47

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