Rohto Pharmaceutical Co., Ltd. · TSE:4527
Rohto Pharmaceutical — Proxy Contest (April 2026)
75 slides from Rohto Pharmaceutical's proxy contest presentation, Apr 30, 2026
Slide 1: Awakening ROHTO
Awakening ROHTO Asset Value Investors Limited 30th April 2026
Slide 2: About AVI
About AVI Asset Value Investors Limited (AVI) Overview • A listed investment trust manager established in London, UK in 1985 • Managing client funds investing in global equities for over 40 years • Accepted the Principles for Responsible Institutional Investors (Japanese version of the Stewardship C
Slide 3: ROHTO Shareholder Register
ROHTO Shareholder Register AVI is currently the sixth largest shareholder of Rohto Pharmaceutical. Ownership 11 Market Value No. of shares # Shareholders (%) (JPY bn) (mm) 1 MFS International, Ltd. 7.6% 412.1 17.3 2 Yamada family (founder)2 7.6% 408.0 17.1 3 Mitsubishi UFJ Financial Group 6.8% 368.4
Slide 4: Evolution of Rohto's Business Portfolio (1/2)
Evolution of Rohto’s Business Portfolio (1/2) Since its founding in 1899, Rohto has expanded beyond its original business of gastrointestinal medicines to encompass a wide range of products, including eye drops and skincare, and its revenue has grown to 300 billion yen in 2024 Acquired Mentholatum,
Slide 5: Evolution of Rohto's Business Portfolio (2/2)
Evolution of Rohto’s Business Portfolio (2/2) Over the past 15 years, the skincare business has grown to account for >50% of total revenue, contributing significantly to sales growth. The OP margin has generally remained in the low-mid 10% range, but has recently shown a downward trend due to M&A. R
Slide 6: Trends in Sales and Operating Profit by Region
Trends in Sales and Operating Profit by Region Whilst sales in Japan—which had been the mainstay of Rohto’s revenue—have plateaued, Asia, Europe and the U.S. market have expanded. On the other hand, profit margins in Asia have declined following the acquisition of EYS, making it essential to improve
Slide 7: Shareholder returns
Shareholder returns Over the past five years, Rohto Pharmaceutical has consistently underperformed the TOPIX index in terms of shareholder returns Total Shareholder Returns (“TSR”) 1 Last 3yrs Last 3yrs Last 1yr 223% -42%pt 197% 181% 123% 146% 97% -108%pt 81% 46% -43%pt 103% 3% -12% 100% 100% 100% 8
Slide 8: Market valuation
Market valuation Despite the stable business performance, Rohto is significantly undervalued in the stock market, compared to its industry peers. EV/EBITA multiple1 P/E multiple2 NTM 2Y Fwd. NTM 2Y Fwd. 26.2x 20.9x 31.5x 25.4x 14.5x 13.1x 20.6x 18.6x 12.1x 11.1x 28.8x 23.8x 11.6x 10.4x 25.0x 22.2x 1
Slide 9: The Intrinsic Value of Rohto Exceeds Y6,000/share
The Intrinsic Value of Rohto Exceeds Y6,000/share If Rohto takes appropriate measures to enhance its corporate value, such as strengthening IR by appropriately engaging in dialogue with shareholders and clarifying its business focus, then the intrinsic value is at least three times the current share
Slide 10: Suggestions to Enhance Corporate Value
Suggestions to Enhance Corporate Value 4 key levers should contribute to enhance Rohto’s corporate value: accelerating growth in skincare business, realising synergies with EYS, careful strategic review of the regenerative medicine business, and moving away from founder-led management Skincare Busin
Slide 11: Shareholder Proposal Summary
Shareholder Proposal Summary Issues that could impair Rohto’s corporate value have been identified in the management structure under Chairman Kunio Yamada; therefore, his dismissal is proposed: Personal commitment to the regenerative medicine business and continuous investment disregarding the Cost
Slide 12: Agenda
1 Skincare Business 2 Supplements Business A ge n d a 3 Medical Business 4 Governance 12
Slide 13: Suggestions to Enhance Corporate Value: Skincare Business
Suggestions to Enhance Corporate Value: Skincare Business 4 key levers should contribute to enhance Rohto’s corporate value: accelerating growth in skincare business, realising synergies with EYS, careful strategic review of the regenerative medicine business, and moving away from founder-led manage
Slide 14: Overview of the Skincare Business
Overview of the Skincare Business Skincare sales grew steadily, driven by growth in Asia. However, room for business improvement was identified, including in the stagnating Japanese market and the still-small U.S. and European markets Revenue from Skincare Business by Region (Q1–Q3 Cumulative)1 ; JP
Slide 15: Brand Consolidation: Sales by Skincare Brand
1 [Brand Consolidation] Sales by Skincare Brand The skincare business has 33 brands, yet ~50% of domestic sales depend on Hada Labo, Melano CC and Obagi. Brands with limited sales contribution should be reviewed to focus manufacturing and promotional resources. Domestic sales by brand; JPY bn, % of
Slide 16: Brand Consolidation: Rohto's Market Share by Price Range
1 [Brand Consolidation] Rohto’s Market Share by Price Range Rohto has traditionally focused on low-price skincare, while also offering some premium brands such as Obagi. Although Blooomio was newly launched in 2023 in the mid-price segment, its market share remains limited. Drug Store Rohto’s produc
Slide 17: Brand Consolidation: Bloomio's Struggles
1 [Brand Consolidation] Bloomio’s Struggles The mid-price segment targeted through Blooomio has proven more challenging than initially expected. Background to penetrate to mid-price Segment Results Following the Launch of Bloomio > • Launched Blooomio in September 2023 to Multiple interviews reveale
Slide 18: Brand Consolidation: Bloomio's Struggles
1 [Brand Consolidation] Bloomio’s Struggles The mid-price segment is experiencing sluggish growth due to polarisation among consumers, and competitors have also announced the withdrawal of their brands Cosmetics market size by price segment¹; JPY tn, 2020–26 The Struggling Mid-Price Segment 2.6 2.6
Slide 19: Bloomio's Struggles, Carecera's Success
1 [Brand Consolidation] Bloomio’s Struggles, Carecera’s Success On review sites, Rohto’s CareCera products launched after Blooomio received higher ratings. Negative comments on fragrance are seen for both old and new Blooomio products, suggesting insufficient product development reflecting consumer
Slide 20: Brand Consolidation: The Success of Carecera
1 [Brand Consolidation] The Success of Carecera Within the body lotion and milk category, Carecera is highly rated compared to competitors’ products; it receives many positive reviews from consumers and is considered a brand with high brand loyalty Body Lotion & Milk Category Review Rankings1 Averag
Slide 21: Expansion of Carecera and Integration with Bloomio
1 [Brand Consolidation] Expansion of Carecera and Integration with Bloomio A consumer survey conducted by AVI has identified demand for new Carecera facial care products. Furthermore, there is potential to expand the new products through integration with Bloomio Suggestions for concentration on Sugg
Slide 22: Collaboration with Drugstores: The Rise of Private Labels
2 [Collaboration with Drugstores] The Rise of Private Labels As consumer awareness of private label products within drugstores grows, the development and launch of collaborative private label products with major brands is progressing Growing recognition of drugstore private products Recent co-develo
Slide 23: Collaboration with Drugstores: IT and Data Utilisation (1/2)
2 [Collaboration with Drugstores] IT and Data Utilisation (1/2) Drugstore product development under the ‘Private Brand 3.0’ initiative is progressing, with a detailed understanding of customer needs based on big data Drugstores are accelerating data-driven product development Recursive can contribut
Slide 24: IT and Data Utilisation (2/2): The Case of Melano CC
2 [Collaboration with Drugstores] IT and Data Utilisation (2/2) The Case of Melano CC Rohto has successfully grown its brand, Melano CC, through collaborations with the Matsukiyo Group, utilising customer data and expanding sales of face mask products. Similar initiatives should be expanded to other
Slide 25: Rohto and Competitor Case Studies
2 [Collaboration with Drugstores] Rohto and Competitor Case Studies Rohto should collaborate with drugstores to boost sales and awareness of their existing brands, as well as to jointly develop new brands Direction of collaboration Examples of Rohto’s products Competitor Success Stories Suggestion M
Slide 26: Expansion of the Global Hair Care Market
3 [Expansion of Hair Care Products in Europe and the US] Expansion of the Global Hair Care Market The global hair care market is forecast to grow at CAGR 7%. As demand for hair care rises, L’Oréal’s hair care brand ‘Kérastase’ has exceeded 1 EUR bn in sales in 2022 Global Hair Care Market; USD bn, 2
Slide 27: Gyutto's Rapid Growth in Japan
3 [Expansion of Hair Care Products into Europe and the US] Gyutto’s Rapid Growth in Japan Rohto’s “Gyutto” hair mask, launched in 2024, achieved sales over 400% of plan within one year and received strong reviews. Given the expanding global haircare market, overseas expansion should be accelerated.
Slide 28: Historically high advertising expense levels
4 [Marketing Strategy] Historically high advertising expense levels Rohto’s advertising expense ratio is higher than peers, consistently exceeding 10% of sales, likely driven by a skew toward mass advertising in the skincare business. Advertising expenses per revenue1; %, FY2009-24 Rohto has continu
Slide 29: Structural drivers of the high advertising expense ratio
4 [Marketing Strategy] Structural drivers of the high advertising expense ratio High advertising expense ratio likely reflects awareness-heavy TV advertising, mass advertising to secure shelf space, and lower efficiency from many brands and low LTV¹ Details to follow Current state of Rohto Potential
Slide 30: Over-investment in awareness advertising
4 [Marketing Strategy] Over-investment in awareness advertising Rohto has focused on mass advertising since its founding, resulting in a structurally high advertising cost base. While TV commercials historically succeeded in building awareness, the cost-effectiveness of current marketing initiatives
Slide 31: Melano CC: Success without Mass Advertising
4 [Marketing Strategy] Melano CC: Success without Mass Advertising Manufacturers selling through drugstores have historically favoured TV commercials to secure shelf space, but recent cases such as Melano CC have succeeded through word-of-mouth without mass advertising. Shelf-space allocation practi
Slide 32: Reduce ads expenses through horizontal rollout of Melano CC model
4 [Marketing Strategy] Reduce ads expenses through horizontal rollout of Melano CC model While maintaining a certain level of awareness advertising, Rohto should improve margins through an advertising strategy focused on strengthening in-store touchpoints that directly drive purchases. Suggestion Fu
Slide 33: Proactive promotion of M&A in Asia market
5 [Promoting M&A] Proactive promotion of M&A in Asia market Rohto acquired Thai emerging skincare company Thann-Oryza in 2026. As M&A in the cosmetics and personal care market is increasing, particularly in Asia, Rohto should continue to strengthen M&A in the Asian skincare business. Rohtos’s Acquis
Slide 34: Agenda
1 Skincare Business 2 Supplements Business A ge n d a 3 Medical Business 4 Governance 34
Slide 35: Suggestions to Enhance Corporate Value: Supplements Business
Suggestions to Enhance Corporate Value: Supplements Business 4 key levers should contribute to enhance Rohto’s corporate value: accelerating growth in skincare business, realising synergies with EYS, careful strategic review of the regenerative medicine business, and moving away from founder-led man
Slide 36: Eu Yan Sang International Ltd. (EYS) Overview
Eu Yan Sang International Ltd. (EYS) Overview EYS is a rapidly growing Traditional Chinese Medicine (TCM) and natural consumer health company, operating mainly in three countries with various sales channels. Though attractive, Rohto’s acquisition may have been overpriced – PMI efforts are crucial EY
Slide 37: Current status of EYS after the acquisition
Current status of EYS after the acquisition EYS earnings guidance was revised down in Q3 FY2026/3, impacted by the competitive environment in Hong Kong and weaker consumer spending Revised consolidated cumulative Q3 P/L for FY26/3; EYS’s performance remains sluggish JPY bn -228 -206 -73 95 EYS downw
Slide 38: Business expansion from Hong Kong to Shenzhen
Suggestion: Business expansion from Hong Kong to Shenzhen As consumer demand shifts from Hong Kong to mainland China, including Shenzhen, EYS should promptly consider store expansion in mainland China Comments on EYS sales weakness (from past discussions with CFO Saito) ‘Northbound consumption’ tren
Slide 39: Market entry in China (1/3): The Attractiveness of the Chinese Market
Market entry in China (1/3) The Attractiveness of the Chinese Market EYS currently operates primarily in Hong Kong, Malaysia and Singapore, but the Chinese market is highly attractive in terms of market size and product fit Geographical expansion assessment Attractiveness for new entrants (fit with
Slide 40: Market entry in China (2/3): TCM market size and competition
Market entry in China (2/3) TCM market size and competition in China The Chinese traditional Chinese medicine market is worth approximately 13.9 trillion yen, boasting a scale roughly 55 times that of Japan’s Kampo market. However, there are no companies with a dominant market share, and the market
Slide 41: Market entry in China (3/3): Considerations when entering the market
Market entry in China (3/3) Considerations when entering the market Since around 2022, Tsumura has aimed at expanding its traditional Chinese medicine business. However, it should take care when selecting local partners, drawing on lessons from the experience of others. Progress of Tsumura’s entry i
Slide 42: Agenda
1 Skincare Business 2 Supplements Business A ge n d a 3 Medical Business 4 Governance 42
Slide 43: Suggestions to Enhance Corporate Value: Medical Business
Suggestions to Enhance Corporate Value: Medical Business 4 key levers should contribute to enhance Rohto’s corporate value: accelerating growth in skincare business, realising synergies with EYS, careful strategic review of the regenerative medicine business, and moving away from founder-led managem
Slide 44: Overview of the Medical Business
Overview of the Medical Business Since 2013, the Medical Business—comprising regenerative medicine and medical ophthalmology—has been designated as a growth investment business, with the aim of achieving sales of over 55 JPY bn by 2035 Rohto is focusing on the Medical Business as a growth investment
Slide 45: Rising R&D expenses since the launch of the medical business
Rising R&D expenses since the launch of the medical business Despite difficulties in regenerative medicine and ophthalmic prescription drugs, Rohto’s consolidated R&D expenses continue to rise. While not explicitly attributed to the medical business, urgent disclosure is required Trajectory of Rohto
Slide 46: Disclosure regarding investment amounts in the Medical Business
Disclosure regarding investment amounts in the Medical Business Rohto’s disclosure on cumulative investment and plans remains company-wide, with no business-level disclosure. Some disclosure has been made for regenerative medicine, but details such as capex remain undisclosed. Cash allocation plan a
Slide 47: Likelihood of investment recovery in the regenerative medicine business
Likelihood of investment recovery in the regenerative medicine business Considering past acquisitions / investments, cumulative losses, R&D expenses and capex, recovering investment in regenerative medicine appears difficult even if peer-level operating margins are achieved. Regenerative Medicine Bu
Slide 48: Recent Strengthening Business & Capital Alliance with Wakamoto
Medical Ophthalmology Recent Strengthening Business & Capital Alliance with Wakamoto Rohto Pharmaceutical and Wakamoto formed a business alliance in 2020 and have since collaborated closely, including joint product sales, and in 2025, Rohto acquired 11.46% of Wakamoto’s voting rights. Collaboration
Slide 49: Carve-out of ophthalmic prescription drug business through JV formation
Medical Ophthalmology Carve-out of ophthalmic prescription drug business through JV formation To demonstrate management that is conscious of capital efficiency in the future, amid intense competition in the ophthalmology sector, Rohto and Wakamoto should establish a JV for medical ophthalmology and
Slide 50: Rohto's Investment History in Regenerative Medicine (1/3)
Regenerative Medicine Rohto’s Investment History in Regenerative Medicine (1/3) Rohto has been actively investing in regenerative medicine, leading multiple joint research projects, conducting clinical trials, establishing joint ventures, and acquiring regenerative medicine research companies... 201
Slide 51: Rohto's Investment History in Regenerative Medicine (2/3)
Regenerative medicine Rohto’s Investment History in Regenerative Medicine (2/3) ...However, despite 13 years of continuous investment, the regenerative medicine business is yet to directly deliver profits. 2018 2019 2020 2021 2022 2023 2024 Succeeded in Clinical trial for Founded a joint- Invested a
Slide 52: Rohto's Investment History in Regenerative Medicine (3/3)
Regenerative Medicine Rohto’s Investment History in Regenerative Medicine (3/3) Even after 2025, when AVI called for a strategic review of regenerative medicine business—including potential downsizing— through a public campaign, expenditure has been continued AVI launched a public campaign and sugge
Slide 53: Rohto's regenerative medicine business overview
Regenerative medicine Rohto’s regenerative medicine business overview Limited synergy with existing businesses and unclear competitive advantage. Given reputational and other risks, Rohto should justify continued investment and consider scale-back or withdrawal Overview Value Chain Assessment 1 Cell
Slide 54: Private Treatment: Market Overview
1 Regenerative Medicine Private Treatment: Market Overview Private medicine is growing moderately, but revenue growth at major players has stalled. As medical institutions appear to be increasingly insourcing, the outsourced market is expected to stagnate Regenerative medicine private Revenue trends
Slide 55: Private Treatment: Price Range
1 Regenerative medicine Private Treatment: Price Range Private-practice regenerative medicine is difficult to cover under insurance and offered to patients at high prices, potentially diverging from Rohto’s vision and purpose of “delivering Well-being to people around the world" Costs by treatment t
Slide 56: Private Treatment: Serious incidents and capital market sanction risk (1/2)
1 Regenerative medicine Private Treatment: Examples of serious incidents and risk of capital market sanction (1/2) Kohjin Bio’s share price declined following a fatal incident involving administration of its self-manufactured autologous adipose- derived mesenchymal stem cells KohJin Bio Share Price
Slide 57: Private Treatment: Serious incidents and capital market sanction risk (2/2)
1 Regenerative medicine Private Treatment: Examples of serious incidents and risk of capital market sanction (2/2) Rohto has previously experienced a medical incident at a client medical institution. In private-practice medicine, medical incidents at clinics could potentially impair Rohto’s overall
Slide 58: CDMO/CMO: Market Overview and Competitive Landscape
2 Regenerative medicine CDMO/CMO: Market Overview and Competitive Landscape The domestic CDMO market is growing steadily, but remains small at one-tenth of the global market. In an already concentrated market led by major players, Rohto has a limited track record and has yet to gain traction with ph
Slide 59: Prescription Drugs: Difficulty of Reaching Market (1/2) R&D Pipeline
3 Regenerative medicine Prescription Drugs: Difficulty of Reaching Market (1/2) R&D Pipeline From August 2024 to September 2025, only two products advanced in clinical stage. Given delays in some P1–2 products, delivering the more challenging P3-to-launch process on schedule appears difficult Rohto’
Slide 60: Prescription Drugs: Capital market risks due to development failure
3 Regenerative medicine Prescription Drugs: Difficulty of reaching market launch (2/2) Capital market risks due to development failure Australia-based Mesoblast, which developed bone marrow-derived mesenchymal stem cell therapy, experienced a ~60% share price decline after FDA rejection. Rohto also
Slide 61: Difficulty of sustaining commercialisation and recovering investment (1/3)
3 Regenerative medicine Prescription drugs: Difficulty of sustaining commercialisation and recovering investment (1/3) Only 19 regenerative medicine products have received MHLW approval. Some products were discontinued after launch, highlighting the high difficulty of sustained commercialisation and
Slide 62: Difficulty of sustaining commercialisation and recovering investment (2/3)
3 Regenerative Medicine Prescription Drugs: Difficulty of sustaining commercialisation and recovering investment (2/3) Even Takeda, with extensive clinical experience, discontinued Alofisel after achieving launch following prolonged investment, due to trial failure. This illustrates the difficulty o
Slide 63: Difficulty of sustaining commercialisation and recovering investment (3/3)
3 Regenerative medicine Prescription drugs: Difficulty of sustaining commercialisation and recovering investment (3/3) The adipose-derived stem cell field, where Rohto is particularly focused, faces significant difficulty in proving efficacy. Investment recovery appears extremely challenging; early
Slide 64: Suggestion: Strategic review of the Medical Business
Suggestion: Strategic review of the Medical Business Medical business initiatives should be reassessed from a capital cost perspective, with an early decision on the policy, including potential scale-back or withdrawal Current situation Suggestion • The regenerative medicine business lacks a clear p
Slide 65: Agenda
1 Skincare Business 2 Supplements Business A ge n d a 3 Medical Business 4 Governance 65
Slide 66: Suggestions to Enhance Corporate Value: Governance
Suggestions to Enhance Corporate Value: Governance 4 key levers should contribute to enhance Rohto’s corporate value: accelerating growth in skincare business, realising synergies with EYS, careful strategic review of the regenerative medicine business, and moving away from founder-led management Sk
Slide 67: Share ownership and management by Rohto's founding family
Share ownership and management by Rohto’s founding family Despite the Yamada founding family holding less than ~8% of Rohto shares, the Chairman and President roles have historically been passed down within the family, leaving the founding family in effective control of management Rohto Major Shareh
Slide 68: TSE requests and Rohto's disclosure
TSE requests and Rohto’s disclosure Achieving TSE-requested capital-cost-conscious management requires portfolio optimisation. However, Rohto has not disclosed any scale-back / withdrawal policy or criteria for regenerative medicine TSE examples of “gaps with investor expectations” Rohto’s regenerat
Slide 69: Chairman Kunio Yamada's management philosophy lacking corporate governance (1/2)
Chairman Kunio Yamada’s management philosophy lacking corporate governance (1/2) Chairman Kunio Yamada has expanded new businesses under a management philosophy favouring diversification over “selection and focus,” yet no exit criteria have been set, diverging from the TSE’s request for “management
Slide 70: Chairman Kunio Yamada's management philosophy lacking corporate governance (2/2)
Chairman Kunio Yamada’s management philosophy lacking corporate governance (2/2) Moreover, the mid- to long-term management plan is described as “more of an outlook than a plan,” lacking commitment to budget targets and falling well short of compliance with the Corporate Governance Code Comments by
Slide 71: Chairman Kunio Yamada's unilateral promotion of the regenerative medicine business
Chairman Kunio Yamada’s unilateral promotion of the regenerative medicine business Regenerative medicine appears to have been launched from Chairman Kunio Yamada’s personal experience, with budgets reportedly agreed directly between the Chairman and the business division Rohto’s budget planning proc
Slide 72: Internal and external views on Chairman Kunio Yamada's management structure
Internal and external views on Chairman Kunio Yamada’s management structure In a media feature on centralised management, Chairman Yamada ranked within the top 100 for executive compensation concentration and tenure. Employee reviews also include criticism of one-man management ‘Real-name ranking of
Slide 73: Outside directors supporting Chairman Kunio Yamada's management structure
Outside directors supporting Chairman Kunio Yamada’s management structure External Director Akie Iriyama supports family management, long-tenured leadership and long-term new business investment, broadly aligning with Chairman Kunio Yamada’s philosophy. If the current structure desired by Mr Iriyama
Slide 74: Shareholder Proposal Summary
Shareholder Proposal Summary Issues that could impair Rohto’s corporate value have been identified in the management structure under Chairman Kunio Yamada; therefore, his dismissal is proposed: Personal commitment to the regenerative medicine business and continuous investment disregarding the Cost
Slide 75: Disclaimer
Disclaimer ▪ This document (including all information contained herein; hereinafter the same) was prepared solely for the purpose of providing information to shareholders of ROHTO Pharmaceutical Co., Ltd. (the “Company”). Asset Value Investors Limited (“AVI”) is the investment manager of AVI Japan O