the 11th mid-term management plan (fy2021-fy2023)

Copyright (c) 2012 Unicharm Corporation. All rights reserved.Copyright (c) Unicharm Corporation. All rights reserved.

The 11th Mid-term Management Plan (FY2021-FY2023)

February 16, 2021Takahisa TakaharaPresident and CEOUnicharm Corporation

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 projections due to risks associated with market

competition, foreign exchange rates, etc. and uncertainties.


Contents

2

Review of 10th Mid-term Management Plan (2017-2020)

Desirable future in 2030

11th Mid-term Management Plan (2021-2023)

Medium-to-Long-term financial goals (2023, 2030)

Capital Policy・Shareholder Return Policy


Review of 10th Mid-term Management Plan (2017-2020)

◆ Notations

WC: Wellness Care Business

FC： Feminine Care Business

BC： Baby Care Business

PC： Pet Care Business

Copyright (c) 2012 Unicharm Corporation. All rights reserved.Copyright (c) Unicharm Corporation. All rights reserved.Copyright (c) Unicharm Corporation. All rights reserved.

300

1300

2300

3300

4300

5300

6300

7300

8300

9300

FY2016 FY2020P FY2020

Sales

604.7

billion yen

Sales

800.0

billion yen

Sales

727.5

billion yen

CAGR

+7.0%

Indicator Plan Achievement Achievement evaluation

CAGR※1 +7.0% +4.7%（+5.6%※2） ×

Core operating income 15.0% 15.8% ◎

ROE 15.0% 10.8% ×

*1 CAGR is Compound Average Growth Rates)

*2 Compound Average Growth Rates excluding impact of fluctuation in exchange rate

10th Mid-term management plan （FY2017/12-FY2020/12）

Review 10th Mid-term Management Plan (2017-2020)

4


Positive

5

New Normal pervades under COVID-19 pandemic

Formulate strategy by backcasting from

the desirable future in 2030

Propose product value to

diverse customers

Market creation in areas that

are estimated to grow

Decline of birthrate beyond expectation

in every country

High growth of HC in Japan and Southeast Asia

High growth of profitable FC in China

High growth of PC in Japan and North America

Slow growth of BC in every country

Strong yen beyond expectation

Negative

Cost improvement

Review 10th Mid-term Management Plan (2017-2020)


Desirable Future in 2030


Rich and warm social community where everyone around the world

is equal and comfortable, respects individuality and

shows mutual support and understanding

7

How we want to be in 2030

Realize “Cohesive Society”

“Cohesive Society” that Unicharm aims to reach

Social Inclusion

Copyright (c) 2012 Unicharm Corporation. All rights reserved.Copyright (c) Unicharm Corporation. All rights reserved. 8

Ideal Form of “Cohesive Society”

Realizing “Cohesive Society”Mission

Life YellowProducts and services

that fit diverse values

and life styles

Human OrangeEliminating

discomfort in health

of all the people

Science BlueCreating new health

and comfort by

life science

SDGsSolving social issues

through business and

succeed the wealthy life

to the next generation


9

Desirable Future in 2030

Toward Realizing “Cohesive Society”

*1 Stands for our corporate philosophy “Necessity of Life with Activities & Dreams of Life with Activities”. With wishes to provide all people of all

ages, from babies to the elderly, with products that support their minds and bodies in a gentle way and make them free from various burdens to allow

them to fulfill their dreams.

*2 A management model.

Management with Resonance*2

Realize Cohesive Society

Pursue “wealth in three aspects” and develop the personnel, who can contribute to the society more widely.

The source of creating wealth in wide society. Its core is non-woven absorbent technology

Practice of

NOLA&DOLA*1

Encourage individual independence and mutual assistance

Mission

Vision

ValueResolution, Will

What do we

want to do？

How to realize？

By using UC Way, integrate vector of all members

SDGsPurpose


11th Mid-term Management Plan（2021-2023）


Formulate strategy by backcasting from

the Desirable Future in 2030

Use DX and strengthen the brand

by exploring the deep psyche of customers

Analyze the principles of

"Monozukuri" (manufacturing excellence)

Thoroughly to build optimal processes

Maximize lifetime value by developing products

that win the hearts and minds of customers

Realize the ultimate GENBA

（Total optimization/smartification/improvement group）

Establish recycling value chainResolve social issues and

coexist with the earth

Strengthen and infiltrate

human resource development

Focus on new growth pillars

Foster resonant personnel around the world to

shift to the management mainly composed of locals

Achieve the top share of nonwoven fabric

absorbent core business in the global market

Strategy 1

Strategy 2

Strategy 3

Strategy 4

Strategy 5

Desirable Future in 2030 11th Mid-term Management Plan


11th Mid-term Management Plan Strategy - Main Targets

Overseas

Sales Ratio2023：65％(2030：70％)

Ratio of national staff in management positionGeneral Manager：65％

Manager：87％

Ratio of female in management position Group:30％ Japan ：18％

HQ female employeeratio：50％

New EntryAchieve 10% market share

（including expansion

to Africa）

Utilize DXPropose the world’s first

optimal discretion care

HC marketKey cities in China

Top Market Share

Used

Disposable DiaperLaunch recycle project

Usage of plastic

in packagingReduce 5％


Organize Project Gen-Z by

inviting public participation,

and lead globally how to use.

13

Mid-term Management Plan (2021-2023)

Strategy 1

Globally develop “Resonant Personnel” who will be the driving force to be the best in the world

Needs for Independent, issue-raising

“Resonant Personnel” to realize

cohesive society and the best in the world

Global personnel development

is top priority

HR Dept in every country uses the same

system for personnel development, and

gather successful examples

Released in 1986

Establishing Global personnel data base to place right

personnel in the right position is under consideration

Move from paper to multi media.

Develop “search, memo, tag” features

Introduce and utilize HR system “KYOSHIN” to

accelerate personnel development

Introduced to 16 companies

by the end of 2020

Cultivate shared values through “UC Way” Foster independence and growth globally

11th Mid-term Management Plan 2021-2023


New Sustainable Growth Strategy with SDGs as a purpose

Strategy 2,3

Kyo-Sei Life Vision 2030

Mature Market

20302023

Sales

CAGR

+6.9%

Sales

CAGR

+6.8%

COPM*

15.5%COPM

17%

Growing Market

Sales

CAGR

+5%

Profitability

High

Sales

CAGR

+10%

Profitability

Low

Marketing, R& D, Smartification ＤＸ

Safe and Secure Happiness PropositionAdded value

Establish Recycling BusinessRecycle

Concentrated Investing in HC and PCConcentrated

Investing

Globally develop “Resonant Personnel” who will be the driving force to be the best in the world

New customer

developmentPrior Investment to Attractive Markets

* COPM stands for Core Operating Profit Margin



Mature Market Marketing・R&D・SmartificationDX

Mid-term Management Plan (2021-2023)Strategy 2,3

Drastic reform on how to provide products, services, and values

through DX

Marketing (digital×customer+α)

• Brand penetration strategy by country and category

• Consumer channel strategy utilizing digital finance

• Customer data accumulation and analysis through products

and apps

R&D (Data science. Smart lab)

• Product development through researching new life style

• Research resource processing that reduces

environmental impact

• Product development that solves social issues by

country

Smartification (digital×things+α)

• Accelerate development of smart factories

• Things×digital evolve how to deliver/provide




Marketing(Digital×Customer＋α)

R&D(Data Science/Smart Lab)

Smartification(Digital×Things＋α)

Unicharm

Digital

Innovation

Center

DIC

DIC

・New value proposition with

pearl essence added,

silky feel cotton

disposable diaper

・”Heating napkin” focusing on

menstrual pain

Built-in heating area realizes

“leakproof” and “warming the

body” features

・Health promoting food for

cats. “Muscle health promotion

for neutered/ spayed cats”

“Kidney health promotion”

Digital infrastructure is utilized at Digital

Innovation center when collecting,

accumulating, and integrating word-of-

mouth and posts for SNS and e-commerce. ・Kyushu Factory

Cutting-edge smart factory in Japan

Aim to achieve improved speed in discovering opportunities for new markets

by speeding up validation for consumer insights, by increasing success rate of product strategy,

and by utilizing data from wider generation.

11th Mid-term management plan 2021-2023


Mature Market Safe and Secure which bring Happiness PropositionAdded Value


Add high-value ・ create comfort ・ contribute to reduce burden ・ propose solution to social issues

Total support of “healthy longevity society” and “pet’s life”・ Expand positive margin mix

Realize to become synonymous with the best brand

in “with Corona society”

Examine the possibility of“visible face mask” with Unicharm technology

Happiness proposition by utilizing DX that wins the hearts and minds of customers



0

200

400

600

800

1000

1200

1400

1600

2020 2030 2040 2050

World Asia China

18

Mid-term Management Plan (2021-2023)Strategy 4

0-4 population 65+ population PC market

Continually increasing

in Africa

Rapidly increasing

worldwide

(million people)

Rapidly expanding

China/Asian markets

(billion yen)

*1 *1 *2

*1 UN：World Population Prospects 2019 *2 Euromonitor / Survey by Unicharm


0

50

100

150

200

250

300

350

400

2020 2030 2040 2050

Asia Africa China

0

200

400

600

800

1000

1200

1400

1600

2020 2025 2030

Asia Japan China

Asia

Africa

China

World

Asia

China China

Asia

Japan


Aggressive investment in IoT related product,

with possibility of M&A

Growing Market Concentrated Investing in HC and PCConcentrated

Investing

Mid-term Management Plan (2021-2023) Strategy 4

HC PCFurther penetration of convenient

Japanese care model

Improve margin mix by penetration

and premiumization

Expansion of pet food and toiletries to Asia


19

UC

Group

Market

Development

in China and

Lead

Southeast Asian

Market


Growing Market Prior investment to attractive marketsNew customer

development

Set new priority countries in Africa

Establish global supply system

New

priority countries

including Africa

• Set new priority countries considering market size

and distribution structure

• Establish original optimum global supply system


Rapid expansion of area

• Overwhelming share in urban area by brand strength

/ Expand rapidly to countryside

Rapidly expand

the share in urban areas

to countryside



Mature Market Establish recycling businessRecycle


Population decline

Aging

Decarbonization

Increase in ratio of

disposable diaper in waste

Increasing waste

problem of adult diaper

Accelerate measures for

decarbonization

in every country and

company

Operationalize recycling of disposable diaper

Promote transition to renewable energy

Promote plastic reduction

• Establish original recycle technology that is

both eco-friendly and profitable

• Strengthen partnership with municipalities

• Cost stabilization through generating own

energy, transition to resource recycling model

• Avoid cost rise by reducing fossil fuel

resources

• Reduce plastic in packaging materials while

maintaining customer benefit

Profit increase

from recycling

business

Increase

corporate value

New business

model that

solve social

issues




Unicharm’s”Disposable diaper recycling model”

Aims to realize the future where used diaper recycling is the norm,

by strengthening partnership with

disposable diaper users and municipalities

Recycleall materials

Used disposable diaper

to sanitary materialof clean quality

No pollution

to water and airby ozone bleach and

sterilization

Approaching

the future where

recycling is

the norm

over - 90% over - 80% over 100Kg /1t

used diaper

Amount of CO2 emitted from

burning disposable diapers Amount of waste generated

from disposable diaper Amount of recycling recycled pulp

* 1 Ministry of Environment Guidelines for recycling used disposable diaper

* 2 Survey by Unicharm

* 3 Journal of Environmental Information Science Vol.33 (2019)

*1 *3*2



Toward safe and secure material

without stressing the environment

Unicharm’sRecycling model for disposable diaper


Medium-to-Long-term Financial Goals （2023, 2030）

Copyright (c) 2012 Unicharm Corporation. All rights reserved.Copyright (c) Unicharm Corporation. All rights reserved.Copyright (c) Unicharm Corporation. All rights reserved.

300

2300

4300

6300

8300

10300

12300

14300

16300

FY2020 FY2023P FY2030P

0

Kyo-Sei Life Vision 2030

Medium-to-Long-term Financial Goal （2023, 2030）

11th Mid-term Management Plan

Sales

727.5

billion yen

Sales

888

billion yen

Sales

1.4

trillion yen

Indicator FY2023 Plan

FY2030Desirable Future

FY2020(Reference)

Sales 888 billion yen 1.4 trillion yen 727.5 billion yen

CAGR +6.9% +6.8% －

Core operating income rate 15.5% 17.0% 15.8%

ROE 15.0% 17.0% 10.8%

25


Capital Policy・Shareholder Return Policy


0%

50%

ROE

Consolidated dividend payout ratio

Total payout ratio

27

Capital Policy・Shareholders Return Policy

Cash flow from sales activities

Business investment to achieve

sustainable growth (including M&A)

Investment to promote SDGs

Shareholders return

(We are aiming at returning profits to our shareholders with a goal of total payout

ratio of 50% by paying dividends on a consistent and continuous basis and acquiring

treasury shares, upon necessity, on a flexible manner.)

Divided

596 688957

689 8501,036 981 1,109

849

1,503

0

500

1,000

1,500

2,000 Operating cash flow (100 Million yen)


Investment for Sustainable Growth

28

Capital

Investment

M&A

R & D

Expenses

10th Mid-term

Management Plan

（FY`17～FY`20 4 years）

11th Mid-term Management

Plan

（FY`21～FY`23 3 years）

153.2 billion yen(38.3 billion yen/

annual average)

120-150 billion yen(40-50 billion yen/

annual average）

59.9 billion yen Under consideration

2.2 billion yen 6 billion yen

28.6 billion yen（Sales ratio 1.0%）

25-37 billion yen（Sales ratio1.0%〜1.5%）

DX-related

Investment


We support the Sustainable Development Goals (SDGs)

the 11th mid-term management plan (fy2021-fy2023)

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