Unicharm Corporation · TSE:8113

Unicharm — H1 FY2014 Earnings Presentation

39 slides from Unicharm's earnings presentation, Oct 31, 2013

1. Slide 1: First Half of Fiscal Year 2014 Presentation Materials for Investors' Meeting

   First Half of Fiscal Year 2014 Unicharm Presentation Materials for Investors’ Meeting October 31, 2013 Takahisa Takahara President and CEO Unicharm Corporation Projections stated herein include those based on the Company’s assumptions, forecasts and plans as of October 31, 2013. Therefore, actual re

2. Slide 2: A business presence in about 80 countries and regions around the world

   A business presence in about 80 countries and regions around the world Position in absorbent products market: No. 3 worldwide, No. 1 in Asia Market share 2012 Worldwide No.3 8.1% Asia No.1 26.2% Netherlands Russia China USA Egypt India Korea Japan Taiwan Saudi Arabia Vietnam Myanmar Thailand Philipp

3. Slide 3: The World's Most Innovative Companies

   The World’s Most Innovative Companies Unicharm ranked No. 14 on Forbes’ list of “The 100 Most Innovative Companies” #14 Unicharm (JP) #15 Estee Lauder (US) ・ #24 Beiersdorf (GE) ・ #28 Hershey (US) #29 Danone (FR) #30 Procter & Gamble (US) ・ ・ #32 Colgate-Palmolive (US) ・ ・ #35 Reckitt Benckiser (US)

4. Slide 4: 1. Overall Financial Performance Review: 1H of FY2014

   1. Overall Financial Performance Review: 1H of FY2014 Copyright (c) Unicharm 2012 Unicharm Corporation. Corporation. All rights All rights reserved. reserved.

5. Slide 5: Overall financial performance review

   Overall financial performance review  Net sales and operating income reached the record highs for 12th and 6th consecutive periods, respectively.  Net sales ¥286.6 billion (UP 22.0%↑)  Operating income ¥32.0 billion (UP 15.5%↑)  Sales contribution of overseas business again reached a record high

6. Slide 6: 2. Financial Performance Review: 1H of FY2014

   2. Financial Performance Review: 1H of FY2014 Copyright (c) Unicharm 2012 Unicharm Corporation. Corporation. All rights All rights reserved. reserved.

7. Slide 7: Year-on-Year Comparison

   Net sales and operating income has continued to establish all-time highs with year-on-year growth of 22.0% and 15.5%, respectively  Year-on-Year Comparison (Millions of yen） 1H FY2014 1H FY2013 Difference Difference Note 22.0％ Asia Net sales 286,618 234,859 51,758 Up ¥36.0 billion Operating income

8. Slide 8: Changes in Operating Income

   Operating income increased approximately ¥4.3 billion, with higher gross profit due to the increased sales absorbing sales promotion costs, etc. ■ Changes in Operating Income 32.0 27.7 billion yen Increase in gross profit due to sales increase billion yen Increase in of ¥51.7 billion Impact of raw d

9. Slide 9: Geographical Segment Information

   Sales and income growth over 40% in Asia/Middle East  Geographical Segment Information （Millions of yen） Elimination/ Japan Asia Other Total Consolidated Companywide 1H FY2013 Net sales 114,371 87,405 33,082 234,859 ‐ 234,859 Operating income 13,683 12,208 2,036 27,929 -194 27,735 1H FY2014 Net sal

10. Slide 10: Operating Income Margin by Geographical Segment

    Maintaining high operating income margin while allocating marketing costs to expand sales channels in Asia  Operating Income Margin by Geographical Segment 20% 15.3% 15.2% 13.9% 14.0% 13.9% 15% 12.1% 12.4% 13.0% 12.2% 12.0% 11.9% 10.9% 10.7% 9.2% 12.4% 12.8% 12.0% 11.8% 10% 11.2% 10.5% 9.4% 9.2% 9.

11. Slide 11: Business Segment Information

    Sales and profits expanded mainly in Asian personal care  Business Segment Information （Millions of yen） Personal Elimination/ Pet Care Others Total Consolidated Care Companywide 1H FY2013 Net sales 196,143 36,006 2,710 234,859 － 234,859 Operating income 25,309 2,279 134 27,723 12 27,735 1H FY2014

12. Slide 12: Changes in Domestic and Overseas Net Sales

    Sales contribution of overseas business reached an all-time high of 58.5% driven by the steady sales growth in Asia  Changes in Domestic and Overseas Net Sales (Billions of yen) 58.5% 400 60% 51.7% 350 50% 44.1% 43.1% 42.0% 300 38.8% 38.3% 37.2% 36.9% 40% 32.2% 34.0% 250 31.2% 25.2% 26.2% 30% 200 2

13. Slide 13: 3. Operating Environment Review: 1H of FY2014

    3. Operating Environment Review: 1H of FY2014 Copyright (c) Unicharm 2012 Unicharm Corporation. Corporation. All rights All rights reserved. reserved.

14. Slide 14: Impact of exchange rate fluctuations

    Impact of exchange rate fluctuations (year-on-year comparison) Net sales increased approx. ¥28.8 billion year on year, while operating income increased approx. ¥2.0 billion Exchange rate Exchange rate Currency Change in rate 1H FY2013 1H FY2014 Taiwan (TWD) 2.67 3.32 24.3% Thailand (THB） 2.54 3.23 2

15. Slide 15: Foreign exchange rate sensitivity

    Foreign exchange rate sensitivity to a 1% depreciation of the yen vis-à-vis local currencies increases net sales and operating income approx. ¥3,400 million and ¥300 million, respectively Impact of a 1% change (Depreciation of yen) Assumed rate for (Millions of yen) Currency FY2014 Net sales Operati

16. Slide 16: Retail prices of disposable diapers in Asia remained stable

    Retail prices of disposable diapers in Asia remained stable  Disposable Diapers: Changes in Retail Price per Piece (Average of All Manufacturers) China Thailand (RMB) (Baht) Indonesia Japan (Rupiah) (Yen) Copyright (c) Copyright (c) Unicharm 2012 Unicharm Corporation. Corporation. All rights All ri

17. Slide 17: Retail prices for feminine sanitary products trending upward

    Retail prices for feminine sanitary products in Japan and Asia trending upward with shift toward higher added value  Sanitary Products: Changes in Retail Price per Piece (Average of All Manufacturers) China Thailand (RMB) (Baht) Indonesia Japan (Rupiah) (Yen) Copyright (c) Copyright (c) Unicharm 20

18. Slide 18: 4. Financial Results Forecasts & Progress for FY2014

    4. Financial Results Forecasts & Progress for FY2014 Copyright (c) Unicharm 2012 Unicharm Corporation. Corporation. All rights All rights reserved. reserved.

19. Slide 19: Achievement Rates for 1H and Full Year Forecasts

    Achieved first-half targets for net sales and all income levels  Achievement Rates for 1H of FY2014 (Millions of yen) 1H FY2014 1H FY2014 Achievement rate Forecast Results (%) Net sales 271,000 286,618 105.8% Operating income 29,800 32,045 107.5% Operating income margin 11.0% 11.2% Ordinary income

20. Slide 20: 5. Overview: Corporate Strategy

    5. Overview: Corporate Strategy Copyright (c) Unicharm 2012 Unicharm Corporation. Corporation. All rights All rights reserved. reserved.

21. Slide 21: New products with improved absorbency in China's baby care market

    Launched new products with dramatically improved absorbency in China’s baby care market Double-digit sales growth on average, expanded share in regional cities  Unicharm’s Baby Care Business:  Introduced New Diaper with Higher Quality Net Sales (Local Currency Basis) into the Best-Selling Standard

22. Slide 22: Feminine care took No. 2 position in China

    Feminine care business took No. 2 position (15.7%) in the market and achieved CAGR of 29% in net sales, thanks to functional innovations and advanced product designs  Unicharm’s Feminine Care Business:  Overwhelming Popularity Net Sales (Local Currency Basis) Among Young Women CAGR 168 29% 130 100

23. Slide 23: Expanding presence in inland China

    Expanding presence—number of cities—matched to growing demand in inland China Expanding distribution channels can help overtake competition  China: Number of Cities Where Unicharm Has Businesses 1,200  Number of Chinese cities in which Unicharm has 1,000 businesses is planned to be increased to ov

24. Slide 24: Indonesia: accelerated penetration across archipelago

    In Indonesia, accelerated penetration across archipelago and achieved CAGR of 37% in net sales of baby care products, supported by growth in market share to 67.9%  Unicharm’s Baby Care, Feminine Care and  Baby Care Market Share Other Businesses in Indonesia: Net Sales (Local Currency Basis) Unicha

25. Slide 25: Overwhelming shares in Thailand's baby and feminine care

    Captured overwhelming shares in Thailand’s baby care and feminine care markets through enriched product lineup Achieved CAGR of 15%, beating the industry average  Unicharm’s Baby Care, Feminine Care and  Baby Care Market Share Other Businesses in Thailand: Net Sales (Local Currency Basis) Unicharm

26. Slide 26: Vietnam: high growth in net sales

    In Vietnam, achieved high growth in net sales—at 48% over previous year Captured No. 1 spot in baby care market, expanded share of feminine care market (Source: Unicharm)  Unicharm’s Baby Care and Feminine Care  Baby Care Market Share Businesses in Vietnam: (Ho Chi Minh City, Hanoi) Net Sales (Loc

27. Slide 27: India: economy pant diaper sold by piece

    In India’s baby care market, introduced economy pant diaper sold by piece, and achieved high CAGR of 96% in net sales, with a market share of 16.1% (Source: Unicharm)  Unicharm’s Baby Care Business in India:  Baby Care Market Share Net Sales (Local Currency Basis) 384 70 CAGR Competitor A 54.1%→61

28. Slide 28: Expanding presence in cities in India

    Rapidly expanding presence in cities, and expect to be selling products in 1,200 cities by March 2014 9 Rupee Diaper makes impression, and pants-type diaper promoted by shop displays linked to commercials  Unicharm’s Market Presentation Currently Covers  9 Rupee Diaper Makes Impression, and about

29. Slide 29: Myanmar growth potential after MYCARE acquisition

    Number of births in Myanmar 1.1 times higher than in Japan, and menstruating population about the same as in Thailand, presenting solid latent growth potential Achieved market share exceeding 50% for both baby care and feminine care products in Myanmar through acquisition of MYCARE  Number of Birth

30. Slide 30: Pet care: new products with non-woven fabric technologies

    Actively promoting new products featuring Unicharm’s original non-woven fabric technologies Expanded market share for dog pads and flea and tick control products  Actively and Continuously Launching New Products  Dog Pad Market Share Competitor A  Dog pads: Began sales of 47.7%→40.7% Ultra Guard

31. Slide 31: Japan health care market outperformed baby care market

    Japan’s health care market and net sales outperformed baby care market Product differentiation led to 8% CAGR and retail share exceeding 50%  Recent Trends in Unicharm’s Health Care  Unicharm’s Health Care Business: Business in Japan Net Sales Both market scale and net sales of baby care has shrun

32. Slide 32: Japan baby care: innovative value in diapers

    In Japan’s baby care market, offered innovative value in diapers for newborns and bed-wetters Promoted higher sales and stronger affinity among products  Unicharm’s Baby Care: Net Sales  Moony Brand Diapers: Net Sales  World’s first diapers featuring  High growth in shrinking market Up 29% curve

33. Slide 33: Higher value feminine care products in Japan

    Accelerating efforts to add higher value to feminine care products in Japan Realized bigger share and higher operating income margin (up about 3 points)  Unicharm’s Net Sales by Product Category Sensitive Skin For Nighttime Panty Liners  Unicharm’s Feminine Care  Improved Profitability Market Sha

34. Slide 34: 6. Shareholder Return Policy

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

35. Slide 35: Changes in Dividends

    Interim dividend for first half of fiscal 2014 up ¥1 per share, to ¥18 Expect year-end dividend to also increase ¥1 per share, to ¥18  Changes in Dividends (Yen) 40 Forecast 12th consecutive year of increase 36 35 34 32 30 28 25 23 20 18 15 14 15 10 11 10 8 8 9 7 5 0 2001/3 2002/3 2003/3 2004/3 200

36. Slide 36: 7. Change in Fiscal Period

    7. Change in Fiscal Period Copyright (c) Unicharm 2012 Unicharm Corporation. Corporation. All rights All rights reserved. reserved.

37. Slide 37: Change in fiscal year-end from March 31 to December 31

    Change in fiscal year-end from March 31 to December 31  Unicharm plans to change its fiscal year-end from March 31 to December 31 each year*, so the fiscal year ending December 31, 2014 will be a transitional period.  The change is intended to unify the fiscal period for all consolidated subsidiar

38. Slide 38: Unicharm ideals

    Unicharm ideals We contribute to creating a better quality of life for everyone by offering only the finest products and services to the market and customers, both at home and abroad. We strive to pursue proper corporate management principles which combine corporate growth, associate well-being, and

39. Slide 39: Copyright (c) (c) Unicharm 2012 Unicharm

    Copyright (c) Copyright (c) Unicharm 2012 Unicharm Corporation. Corporation. All rights All rights reserved. reserved. 39

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