Lion Corporation Itsuo HamaRepresentative Director and President, Executive Officer

Financial Results for the First Half of 2016

August 3, 2016

Financial Results for the 1st Half of 2016

Financial Forecast for 2016

Initiatives under Vision2020

Contents

Financial Results for the 1st Half of 2016

4

2016

1st Half

2015

1st Half

Y-on-Y Change

Amount %

Net Sales 188,248 180,283 7,964 4.4

Operating Income

% of Sales

10,430

5.5

5,698

3.2

4,731

2.383.0

Ordinary Income

% of Sales

11,338

6.0

6,647

3.7

4,690

2.370.6

Profit attributable to

owners of parent

% of Sales

7,161

3.8

3,898

2.2

3,262

1.683.7

EPS 24.86 14.53 10.33 71.1

(Millions of yen)

Difference from forecast

Forecast as of the

beginning of the

year

Revised forecast

as of May. 9, 2016

3,248

1.8%

(1,752)

(0.9%)

3,930

60.5%

2,430

30.4%

4,338

62.0%

2,338

26.0%

3,161

79.0%

2,161

43.2%

FY2016 First Half Results

Record-high first-half income

5

(Millions of yen)

Sales Segment income (operating income)

2016

1st Half

2015

1st Half

Y-on-Y change 2016

1st Half

2015

1st Half

Y-on-Y change

Amount % Amount %

Consumer

Products135,714 129,293 6,421 5.0 6,155 2,527 3,628 143.5

Industrial

Products26,614 29,015 (2,400) (8.3) 1,249 691 558 80.7

Overseas 48,749 48,749 6,393 13.1 2,468 1,612 856 53.1

Other 14,320 14,320 (2,176) (15.2) 333 494 (161) (32.6)

Subtotal 229,615 221,378 8,237 3.7 10,207 5,326 4,881 91.7

Adjustment (41,367) (41,094) (272) － 222 372 (149) (40.2)

Consolidated

total188,248 180,283 7,964 4.4 10,430 5,698 4,731 83.0

Results by Business Segment

Profitability up in and outside Japan

6

Y-on-Y Changes in Operating Income

0 5 10 15

Operating income for Jan-Jun 2016

Other expenses

Competition expenses

Total cost reduction efforts(manufacturing and logistics costs)

Crude oil and vegetable oil prices

Sales, product mix and othres

Operating income for Jan-Jun 2015 5.6

10.4

+6.1

+1.5

+1.5

(4.0)

(0.3)

(Billions of yen)

Sales up and costs down, leading to increased income

7

Growth in both units sales and unit prices

outpaced the market

Sales value +4pp

Unit sales +3pp

Average unit price +1pp

Toothpastes ＋3pp

Toothbrushes ＋5pp

Topics: Oral Care

Difference in growth rates of Lion and the market (Oral care business)

Difference by category

(Jan.–June 2016, YoY , Lion survey)

8

（ Lion survey ）

Sales value +23pp

Unit sales +33pp

Entire

Market

Lion

products

Sales

value105% 128%

Unit

sales108% 141%

Entire

Market

Lion

products

Sales

value109% 126%

Unit

sales109% 127%

Driving growth in high-end categories

Sales value +17pp

Unit sales +18pp

Topics: Oral Care

¥500 and up toothpastesJan.–June 2016, YoY (%) Jan.–June 2016, YoY (%)

¥250 and up toothbrushes

Difference in growth rates of Lion and the market Difference in growth rates of Lion and the market

9

Antipyretic Analgesic 115%

Eye drops for middle-aged

and older users 110%

BUFFERIN PREMIUM

127%

Smile40 Premium

123%

Double-digit growth through expansion of high-end product lines

Topics: Pharmaceuticals

Lion’s sales growth rate (Jan.-June 2016, YoY)

10

Dishwashing detergent

CHARMY Ｍagica111%

Super-Concentrated

Liquid Laundry Detergent

TOP SUPER NANOX108%

Reinforced profitability with

New high-value-added productsLion’s sales growth rate

(Jan.-June 2016, vs. planned sales)

Fabric Care / Living Care

11

Chemical Products category

・Indirect costs down, streamlining

・Synergies through integration

Detergent for Institutional Use category

・Securing new customers for ongoing growth

Topics: Industrial Products Business

Increased profitability by integrating businesses

Segment operating income ratio: 2.4％ → 4.7％

2015 1H 2016 1H

12

Thailand 110%

Oral Care Products：109%

Beauty Care Products：115%

South Korea 109 %

Beauty Care Products：107%

Living Care Products：116%

Topics: Overseas Business

Ongoing profitable growth in key countries

Sales growth rate(Jan.-June 2016, YoY, local currency basis）

13

TaiwanNew sales/marketing company performing favorably 138%

MalaysiaSolidified No. 1 position in laundry detergent 119%

China Strong e-commerce sales 114%

IndonesiaContinued double-digit annualized growth 128%

Topics: Overseas Business

Business growth outpacing GDP growth

Sales growth rate (Jan.-June 2016, YoY, local currency basis）

Financial Forecast for 2016

15

ThailandSystema

Toothbrush

SingaporeTOP NANOX

Indonesiaposh

ChinaSystema

Toothpastes

Dent HealthToothpastes

Interdental Brushhadakara

Body Soap

SYSTEMA Haguki(the Gums) PlusNight Care Gel

Domestic

Overseas

Initiatives for Second Half of 2016

Launch, nurture high-value-added products in growth markets

16

2016 Consolidated Financial Forecast

2016

Revised

Forecast(Jul. 29, 2016)

2015Y-on-Y Change

Amount %

Net Sales 385,000 378,659 6,340 1.7

Operating

Income

% of Sales

21,000

5.5

16,374

4.34,625 28.2

Ordinary Income

% of Sales

22,000

5.7

18,099

4.83,900 21.6

Profit attributable to

owners of parent

% of Sales

13,000

3.4

10,680

2.82,319 21.7

EPS 44.73 39.35 5.38 13.7

V-2 Planfinal targets

(2017)

400,000

20,000

22,000

12,000

(Millions of yen)

Aiming to reach V-2 Plan targets early

17

Fiscal 2016 Dividend Forecast：Annual dividend of ¥11 per share,

up ¥1 year on year

●Basic policy of ongoing, stable returns

●Aiming for consolidated return ratio

of 30% through dividend payments

Shareholder Returns

Initiatives under Vision2020

19

Roadmap to Achieving the Vision

V-1 Plan

V-2 Plan

V-3 Plan

Accelerate profit structure reform,

lay foundation for new business growth

Rebuild the profit

structure

Further accelerate

business growth

2012 2015 2018 2020(Illustration of planned profit growth)

Reforms to achieve

Vision2020

20

Accelerate profit growth ahead of

market changes

Achieve profitable double-digit growth

Quickly establish new profitable businesses

Domestic

Overseas

New

Business

Reform Themes and Key Strategies

Building a strong business base for the future

21

Continuing Growth in Domestic Healthcare Market

0

500

1,000

1,500

2,000

2,500

3,000

2015 2020 2025 2030 2035

（％）

How Seniors Want to Use Money

(Hakuhodo Elder Business Development Division survey)

Toiletries Consumption Forecast by Age of

Head of Household(Spending × No. of households)

29 and

below

30－39

40－49

50－59

60 and over

(Billion yen)

(Toiletries market: The total of kitchen/household detergents, laundry detergents, toothpaste,

toothbrushes, body and facial soap. Lion survey.

Trav

el/l

eisu

re

Ho

bb

ies

Ord

inar

y ea

tin

g

Dis

eas

e a

nd

agi

ng

pre

ven

tio

n

Savi

ngs

/ass

et m

anag

emen

t

Mo

vies

, art

, p

erfo

rman

ces

Mai

nta

inin

g h

eal

th a

nd

yo

uth

fuln

ess

Tre

atin

g d

ise

ase

an

d a

gin

g

Ho

me

and

gar

den

Lear

nin

g an

d s

elf-

dev

elo

pm

ent

Clo

thin

g /

fash

ion

Mas

s m

edia

, in

tern

et u

se,

etc.

Co

smet

ics,

bea

uty

sal

on

s,

etc.

Rai

sin

g ch

ildre

n

Short term:

Ongoing market growth・Gradual rise in number of

households

・Firm demand for

healthcare products

from visitors to Japan

Long term:

Market structure changes

・Rising consumption by

seniors

・Growing demand for

high-value-added

healthcare products

22

• Launch high-value-added products

• Strengthen R&D and new development

Healthcare

• Concentrate investment on key markets

• Streamline business

Home care

Capture

demand

from seniors

Boost

profitability

Accelerating Profit Growth Ahead of Market Changes

23

Expand high-profit businesses

Speeding up Reinforcement of Domestic Profitability

• Stay ahead of structural changes in logistics

Build SCM framework

• Move into new channels

Improve sales framework

• More advanced digital marketing

Reinforce marketing

24

429 541 600 648

0

300

600

900

1,200

2010 2015 2020 2025

(Millions of households)

Growing populations, graying, growing middle class

Households in Asia by Income

(Lion survey)

High-income

Annual income: Over USD35k

Middle-income

Annual income: USD5–35k

Low-income

Annual income: Below USD5k

(“Asia”: China, Hong Kong, Taiwan, South Korea, India, Indonesia, Thailand, Vietnam, Singapore, Malaysia, the Philippines)

Additional Business Opportunities Overseas

Percent of Population Over 65 y/o by Country

(Source: Ministry of Land,

Infrastructure, Transport and

Tourism Statistics Bureau)

Japan 35.7%South Korea 34.5%

Singapore 31.3%

China 23.6%Thailand 21.4%

Indonesia 17.4%Malaysia 16.1%India 14.8%Philippines 14.2%

25

Aiming for Profitable Double-Digit Growth Overseas

Expanding businesses in areas with growth potential

Southeast Asia

Growing middle class

Expansion of

high-value-added

products

that raise QOL

Northeast Asia

Accelerating graying

Penetration and expansion

of healthcare products

26

Increase presence in Asia

Strengthen R&D and marketing in each area

Develop global brands

Shift toward personal care field

Accelerating Overseas Business Growth

Horizontal development of know-how with action tailored to each region

27

Quickly Establish New Profitable Businesses

Expanding the Wellness Direct business

Expand products labeled as functional foods

Secure new customers

Enhance products for cross-selling

Activate existing customers

Target further business expansion

Enhance business infrastructure

・Preventing

lifestyle

diseases

・Raising QOL

Providing value

for aging-related

needs

28

Growing from Oral Care to Oral Health Care

New oral

healthcare

business

●Raising awareness and

providing information

● Enhancing

coordination with

academia and

communities

●Salivary test system

●Support for preventive

dentistry clinics

●Enhance products for

dentistry clinics

Existing oral

care business

Professional care

Self-carePreventive dentistry

initiatives

29

Domestic business

Accelerate profit

growth ahead of

market changes

New businessQuickly

establish new

profitable

businesses

Overseas business

Achieve

profitable

double-digit

growth

V-2 Plan V-3 PlanV-1 Plan

Aiming for Further Success

Achieve

Vision2020

The forecasts and projected operating results contained in this

report are based on information available at the time of

preparation, and thus involve inherent risks and uncertainties.

Accordingly, readers are cautioned that actual results may differ

materially from those projected as a result of a variety of factors.

Note: Figures are rounded down to the digits that are displayed.

Reference Materials

32

Consolidated Statements of Income

(Millions of yen)

2016

1st Half

2015

1st Half

Y-o-Y Change

Amount %

Net sales 188,248 180,283 7,964 4.4

Cost of sales 77,460 78,846 (1,385) (1.8)

Gross profit 110,787 101,437 9,350 9.2

Selling, general and administrative expenses 100,357 95,738 4,618 4.8

Operating Income 10,430 5,698 4,731 83.0

Non-operating income 1,180 1,338 (157) (11.8)

Non-operating expenses 273 390 (116) (30.0)

Ordinary income 11,338 6,647 4,690 70.6

Extraordinary income - 755 (755) -

Extraordinary loss 731 955 (224) (23.5)

Profit before income taxes 10,607 6,447 4,160 64.5

Income taxes 2,989 1,300 1,689 129.9

Adjustment of income taxes (125) 613 (738) -

Profit 7,743 4,533 3,209 70.8

Profit attributable to owners of parent 7,161 3,898 3,262 83.7

33

Selling, General and Administrative Expenses

2016 1st Half 2015 1st Half Y-o-Y Change

Amount % of sales Amount % of salesMillions of

yen%

Selling, general and

administrative expenses100,357 53.3 95,738 53.1 4,618 4.8

Sales commission 4,032 2.1 3,890 2.2 142 3.7

Promotion expenses 44,363 23.6 42,221 23.4 2,141 5.1

Advertising expenses 14,196 7.5 12,502 6.9 1,693 13.5

Transportation and

warehousing expenses8,617 4.6 8,244 4.6 373 4.5

Salaries and allowances 7,322 3.9 7,266 4.0 55 0.8

Research and

development expenses4,777 2.5 4,761 2.6 15 0.3

Other 17,046 9.1 16,851 9.3 195 1.2

(Millions of yen)

34

Significant Extraordinary Income or Loss

2016 Jan-Jun 2015 Jan-Jun

Extraordinary

income

Gain on disposal of noncurrent

assets-

Gain on disposal of noncurrent

assets615

Gain on sales of investment

securities-

Gain on sales of investment

securities139

Total - Total 755

Extraordinary

loss

Loss on disposal of noncurrent

assets436

Loss on disposal of noncurrent

assets781

Impairment loss 59 Impairment loss 173

Other 235 Other -

Total 731 Total 955

(Millions of yen)

35

Consolidated Balance Sheets (Selected) I

2016 1st Half（Ended Jun. 30, 2016)

2015（Ended Dec. 30, 2015) Change

Current assets 153,756 166,830 (13,074)

Cash and deposits 19,132 18,584 548

Notes and accounts receivable-trade 50,597 58,655 (8,058)

Short-term investments 37,889 45,919 (8,030)

Inventories 40,424 37,554 2,869

Noncurrent assets 111,047 115,603 (4,555)

Property, plant and equipment 72,338 75,060 (2,722)

Intangible assets 4,312 5,921 (1,608)

Investments and other assets 34,396 34,622 (225)

Total assets 264,804 282,434 (17,630)

(Millions of yen)

36

Consolidated Balance Sheets (Selected) II

2016 1st Half（Ended Jun. 30, 2016)

2015（Ended Dec. 31, 2015) Change

Current liabilities 102,593 121,247 (18,654)

Notes and accounts payable-trade 41,716 49,620 (7,903)

Short-term loans payable 6,091 9,772 (3,680)

Current portion of long-term loans payable 269 226 43

Accounts payable-other and accrued expenses 43,164 47,521 (4,357)

Noncurrent liabilities 15,759 18,455 (2,696)

Bonds with subscription rights to shares - 2,426 (2,426)

Long-term loans payable 1,685 2,082 (396)

Provision for retirement benefits 9,028 8,751 277

Total net assets 146,452 142,730 3,721

Retained earnings 75,142 69,414 5,728

Treasury stock (4,642) (6,800) 2,157

Accumulated other comprehensive income (127) 3,375 (3,503)

Total liabilities and net assets 264,804 282,434 (17,630)

(Millions of yen)

37

Consolidated Cash Flow

2016

1st Half

2015

1st HalfChange

Net cash provided by (used in) operating activities 4,520 4,697 (177)

Net cash provided by (used in) investing activities (5,317) (2,775) (2,542)

Net cash provided by (used in) financing activities (5,061) (1,966) (3,095)

Effect of exchange rate change on cash and cash equivalents (1,776) (28) (1,748)

Net increase (decrease) in cash and cash equivalents (7,636) (72) (7,564)

Cash and cash equivalents at beginning of period 61,278 38,150 23,128

Cash and cash equivalents at end of period 53,642 38,077 15,564

(Millions of yen)

38

Results by business segment(Millions of yen)

Sales Segment income (operating income)

2016

1st Half

Y-on-Y change 2016

1st Half

Y-on-Y change

Amount ％ Amount ％

Consumer

Products

135,714 6,421 5.06,155 3,628 143.5

122,597 6,051 5.2

Industrial

Products

26,614 (2,400) (8.3)1,249 558 80.7

15,202 309 2.1

Overseas55,142 6,393 13.1

2,468 856 53.149,182 3,658 8.0

Other12,143 (2,176) (15.2)

333 (161) (32.6)1,265 (2,054) (61.9)

Subtotal 229,615 8,237 3.7 10,207 4,881 91.7

Consolidated

total188,248 7,964 4.4 10,430 4,731 83.0

Sales: The upper row for each segment shows gross sales, while the bottom row shows sales to external customers.

Operating income: “Subtotal” shows segment income before the elimination of intersegment transactions, while

“Consolidated total” shows the total income of all consolidated segments after adjustments.

39

Overseas Sales Results by Region

2016

1st Half

2015

1st HalfY-on-Y

Change

Y-on-Y

Change(%)

Southeast

Asia 37,811 31,922 5,888 18.4

Northeast

Asia17,331 16,826 504 3.0

Total 55,142 48,749 6,393 13.1

Southeast Asia ：Thailand, Malaysia, Singapore, Philippinesand Indonesia (PT. IPPOSHA INDONESIA)

Northeast Asia ：South Korea, China, Taiwan and Hong Kong

(Millions of yen)

40

2016Revised Forecast

(Aug. 3, 2016)

2015Y-o-Y Change

Amount %

Consumer

Products258,500 247,978 10,521 4.2

Industrial

Products30,000 30,805 (806) (2.6)

Overseas 94,000 93,903 96 0.1

Other 2,500 5,972 (3,473) (58.1)

Total 385,000 378,659 6,340 1.7

By business segment

Net sales to external customers

2016 Consolidated Financial Forecast

(Millions of yen)

41

3.24.3

7.2 7.8

3.95.9 5.7 5.4 4.9 5.4

8.3

13.5

6.0 6.1 5.8

5.45.7

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016

Jul-DecJan-Jun

10.8

12.0

10.3

11.2

13.7

11.1

11.8

8.8

11.0 11.0

6.4

6.5 5.7

4.9

3.85.1

5.1

Capital Expenditures and Depreciation Expenses

plan

Capital expenditures Depreciation expenses(Billion yen)

Note: Both capital expenditures and depreciation expenses include amounts for intangible assets.

plan

42

Market trend of the total of 38 home product markets in which Lion participates. (percentage change over the year-ago period.)

2011 2012 2013 2014 20152016

Jan-Jun

Sales value 101 101 102 102 103 105

Unit sales 101 102 102 100 100 102

Average unit price 99 99 100 102 102 102

OTC Drug Market Data

2011 2012 2013 2014 20152016

Jan-Jun

Sales value 98 98 99 100 102 100

Unit sales 98 99 99 98 101 99

Average unit price 100 99 100 102 101 101

Market trend of the total of 8 OTC drug markets in which Lion participates. (percentage change over the year-ago period.)

Home Products Market Data

Source: INTAGE Inc. SDI Survey

Year-on-year data for 2011-2012 is for the 42 home product markets in which Lion operates. Data for 2013-2014 is for 40 and

2015 is for 39 such markets

Changes in Home Products and OTC Drug Markets

43

Assumptions for Raw Material Prices and Currency

Crude oil (Dubai) Domestic naphtha Crude palm oil

2016 Jul-Dec

forecastsUSD45/BBL JPY35,000/KL MYR2,600/ton

US Dollar Thai Baht Korean Won

2016 Jul-Dec

forecastsJPY105.0 JPY3.0 JPY0.092

Raw material prices

Currency