Unicharm Corporation · TSE:8113

Unicharm — FY2021 Earnings Presentation

50 slides from Unicharm's earnings presentation, Feb 15, 2022

1. Slide 1: Unicharm Investor Meeting Presentation Materials

   Fiscal Year Ended December 31, 2021 (Jan 1, 2021 to Dec 31, 2021) Unicharm Investor Meeting Presentation Materials February 15, 2022 Takahisa Takahara President and CEO Unicharm Corporation Copyright Copyright (c) (c) Unicharm Unicharm Corporation. Corporation. All All rights rights reserved. reserv

2. Slide 2: Financial Performance Summary

   Fiscal Year Ended December 31, 2021 (January 1 to December 31) 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 may differ significantly from pr

3. Slide 3: Financial Results Summary

   Fiscal Year Ending December 31, 2021 (January 1, 2021 to December 31, 2021) Financial Results Summary Sales 782.7 billion JPY (YoY +7.6%) Consolidated Core operating income 122.5 billion JPY (YoY +6.7%)  Sales hit record high for the fifth consecutive year. Core operating income margin and current

4. Slide 4: Consolidated account highlights

   Sales hit record high for 5 consecutive years High profitability was maintained even under a harsh environment  Consolidated account highlights (100 millions of yen) FY Ended (from Jan. to Dec.) FY Ended Dec. 31, Dec. 31, gap(yen) gap (%) (Forecast) FY Ending Achievement (%) 2020 2021 Dec.31,2021 N

5. Slide 5: Core operating income fluctuation

   Product mix continually improved Profit increased by 7.7 billion yen driven by increased volume from increased sales mainly in China, which absorbed additional costs (100 millions of yen)  Core operating income fluctuation (from Jan. to Dec.) 1,225 1,147 -11 -22 -60 -39 -83 +71 +222 Sales Logistics

6. Slide 6: Geographical segment information

   Strong sales in Wellness Care, Pet Care, Feminine Care Businesses in Japan Stable growth in China and South East Asia, recovery and strong sales in India in Asia  Geographical segment information (100 million yen) FY Ended FY Ended (Ref.) (from Jan. to Dec.) Dec. 31, Dec. 31, gap(yen) gap (%) Actua

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 62.9％ 46.5％ Copyright Copyright (c) (c) Unicharm Unicharm Corporation. Corporation. All All rights rights reserved. reserved. 7

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

   Profitability improved in each area thanks to continuous sales increase effect and advanced product mix  Core operating income margin by geographical segment (from Jan. to Dec. ) Japan Asia Others * Consolidation 21.7% 20.1% 19.7% 19.8% 15.8% 15.8% 15.6% 13.5% 13.8% 12.6% 14.0% 14.0% 11.8% 10.8% 10

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 (100 million yen) FY Ended FY Ended (from Jan. to Dec. ) Dec. 31, Dec. 31, gap (yen) gap (%) 2020 2021 Ne

10. Slide 10: Impacts of foreign exchange fluctuations

    Impacts of foreign exchange fluctuations: Approx. 22.9 billion JPY increase in sales and approx. 3.3 billion JPY increase in core operating income  Rate fluctuations by currency （Jan. to Dec. average rate） Currency Exchange rate for 2020 Exchange rate for 2021 Rate change China(CNY) 15.48 17.03 +10

11. Slide 11: Summary of Performance Forecast FY Ending Dec. 31, 2022

    Summary of Performance Forecast FY Ending Dec. 31, 2022 Copyright (c)2012 Copyright (c) Unicharm Corporation. Unicharm Corporation.All All rights reserved. rights reserved.

12. Slide 12: Summary of Consolidated Performance Forecast

    Fiscal Year Ending December 31, 2022 Summary of Consolidated Performance Forecast Sales 850 billion JPY (YoY +8.6%) Consolidated Core operating income 127 billion JPY (YoY +3.7%)  Achieved a new record high with sales for the sixth consecutive year and core operating income for the third consecutiv

13. Slide 13: Consolidated account highlights forecast

    Achieved a new sales record high for 6 consecutive years Increased incomes mainly overseas absorbed higher costs to secure increased profits  Consolidated account highlights (100 million yen) (from Jan. to Dec.) FY Ended FY (Ref.) Dec. 31, Ending Dec. gap(yen) gap (%) Actual *1 202 31, 2022 gap rat

14. Slide 14: Shareholders Return Policy

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

15. Slide 15: Shareholders return policy

    Through the payment of dividend linking to the business performance and buy-back of our own shares, we are also aiming for total return ratio of 50% in 2022  Shareholders return policy (100 million yen) Dividends Purchase of own shares Total return ratio 600 500 50% 60% 400 40% 300 200 20% 100 0 0%

16. Slide 16: Dividends per share

    Dividend per share Plan to increase dividend for 21 consecutive years (38 yen a year)  Dividends per share (JPY) 36.0 38.0 32.0 28.0 24.0 20.0 14.8 16.0 12.7 12.7 * '14/3 '14/12 '15/12 '16/12 '17/12 '18/12 '19/12 '20/12 '21/12 '22/12E * Irregular accounting period of 9 months Copyright Copyright (c

17. Slide 17: Share buy-back history

    Flexible purchase of own shares depending on the cash condition Plan to purchase up to 17 billion yen, 4.2 million shares, in 2022  Share buy-back history（100 million JPY） 160 170 155 150 130 140 140 120 80 72 * '14/3 '14/12 '15/12 '16/12 '17/12 '18/12 '19/12 '20/12 '21/12 '22/12E * Irregular accou

18. Slide 18: Approach to realize a Cohesive Society (Social Inclusion)

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

19. Slide 19: 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 Copyright (c) Unicharm Corporation. All rights reserved. 19

20. Slide 20: Kyo-sei Life Vision 2030: 20 key themes

    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

21. Slide 21: Key initiatives, indicators, and target values

    Key initiatives, indicators, and target values ◆Safeguarding the well-being of individuals Key initiatives Indicators Target value Target 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

22. Slide 22: Products and services 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

23. Slide 23: 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 do not Expand restrict people’s activities toward 2030 Rollout Rollout of of prod

24. Slide 24: 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 product to ◆Pants-shaped pad that integrates a pad and pants, be used along with a regular pad heating napkin featuring warm sensation

25. Slide 25: Supporting 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

26. Slide 26: Improving 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

27. Slide 27: Protect everyday health and support safe 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 ◆Pursuing functionality and comfort, developing ◆Boost h

28. Slide 28: 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

29. Slide 29: 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

30. Slide 30: Key initiatives, indicators, and target values

    Key initiatives, indicators, and target values ◆Safeguarding the well-being of our planet Key initiatives Indicators Target value Target 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

31. Slide 31: 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 year 2030 targets 2050 vision Responding to the Reducing usage in relation to packaging 2019* Per unit of

32. Slide 32: 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 ◆ Paper package products using 100% recycled ◆Decl

33. Slide 33: 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 ◆Countries and regions with over 5% ◆Offices w

34. Slide 34: Recycling used disposable diapers

    (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

35. Slide 35: Used disposable diaper recycling using ozone-treatment technology

    (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

36. Slide 36: 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

37. Slide 37: 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

38. Slide 38: Key initiatives, indicators, and target values

    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

39. Slide 39: 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

40. Slide 40: Contribution to Achieve a Cohesive Society

    Utilize digital technology and create absolute value for consumers in order to realize sustainable improvement of corporate value and stronger competitiveness Contribution to Achieve a “Cohesive Society” (Social Inclusion) Utilize digital technology and understand the deep psychology of consumers to

41. Slide 41: Domestic initiatives utilizing digital technology-1

    Domestic initiatives utilizing digital technology-1 ◆"Adult diaper counseling" that helps select the ◆Troubles about doggies and kitties are shared in best choice of disposable diaper DOQAT* * DOQAT https://doqat.jp/ ◆“Sofy menstruation management app” helps to ◆“Online moony-chan class” and “Toilet

42. Slide 42: Domestic initiatives utilizing digital technology-2

    Domestic initiatives utilizing digital technology-2 ◆Support your kitty’s health care in cooperation ◆Accelerate the realization of a healthy childrearing environment through a capital and business alliance with with RABO, Inc.*1 First-Ascent Inc. *2 *1 RABO, Inc. https://rabo.cat/company/ *2 A comp

43. Slide 43: Domestic initiatives utilizing digital technology-3

    Domestic initiatives utilizing digital technology-3 ◆Evolved value transmission through digital ◆Developed “Digital Scrum System” to discover measures outside the store before visiting stores customer insights ◆Promoted visualized factories by installing ◆Promoted labor/energy saving with smart vari

44. Slide 44: Overseas initiatives utilizing digital technology

    Overseas initiatives utilizing digital technology ◆Pet growth recording tool + O2O pet clinic introduction platform “Pet note” Health Health Health Clinic search record consultation checkup ◆ An app “Sofy Girl Talk” that supports women's ◆ “Mamypoko Club” that realizes a unique physiological knowled

45. Slide 45: 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 Copyright (c) Unicharm Corporation. All rights reserved. 45

46. Slide 46: 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

47. Slide 47: 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, Malaysia and Japan etc. acquired the  “Natural moony (tape type)”  Joined as AB member towar

48. Slide 48: Evaluation by external organizations and coordination with them

    Evaluation by external organizations and coordination with them  SOMPO Sustainability Index  Certified as Sports Yell ■ Selected as DX Stock 2021 and Company 2021 by Japan Noteworthy DX companies 2021 Sports Agency  Developed “digital scrum system” that enables remotely observing real-life situat

49. Slide 49: Evaluation by external organizations and coordination with them

    Evaluation by external organizations and coordination with them  Won a special prize in Environment  Won “SDGs Strategy/Economic  Won the 2nd SCA Award Sustainable Corporate category of Value Award” in the 3rd Nikkei - companies creating “next the 2nd ESG Finance Awards Japan SDGs Management Awar

50. Slide 50: We support the Sustainable Development Goals (SDGs)

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

Unicharm — FY2021 Earnings Presentation on 6ix