1

FY 2013 Financial Results

Announcement

Management Reports

Lion Corporation

Itsuo Hama

Representative Director and President, Executive Officer

February 10, 2014

2

Business Results and Challenges

for the Fiscal 2013

3

１．Qualitative Growth of Domestic Businesses◇Consumer Products Business

■Develop high-value added products and

market creation-type products→ Improved product mix

→ Controlling sales promotion expenses

◇Industrial Products Business

■Develop new applications in strategic fields while

further cultivating overseas customers and new customers

Policies and Measures for FY2013

３．Development of New Business Value

■Expand investment in marketing to win the leading share

in oral care products and laundry detergents ■Expand our area of operations while strengthening our R&D structure

The Most

Essential Issue

Regain

the Profitability

Of Domestic

Business

2.Quantitative Expansion of Overseas Businesses

■Direct-to-consumer business: Create a second pillar that aids

“Quality of Life” (QOL) enhancement

4

96

97

98

99

100

101

102

103

104

2007 2008 2009 2010 2011 2012 2013

95

96

97

98

99

100

101

102

103

104

2007 2008 2009 2010 2011 2012 2013

Trends in Domestic Markets (percentage of previous year’s results)

Unit price

AmountNo. of units

（Source: INTAGE Inc. SDI Survey)

No. of units

Business Environment for FY2013

Market trend of the total of 40 home product markets

in which Lion participates

Market trend of the total of 8 OTC drug markets

in which Lion participates

Year-on-year data for FY2010 and prior years is for the 44

home product markets in which Lion operates. Data for

FY2011-2012 is for 42 such markets.)

(Source: INTAGE Inc. SRI Survey)

Unit price

Amount

5

FY2013 FY2012Y-on-Y

Change

Y-on-Y

Change

(%)

Change from forecast announced

on August, 2, 2013

Change Change(%)

Net Sales 352,005 335,171 16,833 5.0 0.0 0.1

Operating Income% of Sales

10,819

3.1

7,213

2.2

3,605 50.0 819 8.2

Ordinary Income% of Sales

12,300

3.5

8,564

2.6

3,735 43.6 1300 11.8

Net Income% of Sales

6,0971.7

4,2351.3

1,861 43.9 97 1.6

(Million yen)

Financial HighlightsNet Sales and Profits

・Net sales: Reached previous fiscal year levels as well as those set out in the revisedforecasts, due in part to increased sales in the Overseas Business

・Income: Exceeded previous fiscal year levels as well as those set out in forecasts due inpart to improvements to the product mix and competition costs in the Consumer ProductsBusiness.

*Ordinary income reached its highest level ever

6

Financial Highlights

(Billion yen)Y-on-Y Changes in Operating Income

7.2

10.8

＋6.8

(2.0)

(3.0)

+0

+1.8

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Operating income for FY2013

Other expensex

Competition expenses

Crude oil and vegetable oil prices

Total cost reduction efforts

(manufacturing and logistics costs)

Sales, product mix and others

Operating income for FY2012

In addition to increased net sales, primarily in the Overseas Business,

efforts to improve the product mix of the domestic Consumer Products

Business led to significant improvement in operating income

7

(Million yen)Results by business segment

Net sales Segment income (operating income)

FY2013 FY2012Y-on-Y

change

Y-on-Y

change(%)FY2013 FY2012

Y-on-Y

change

Y-on-Y

change(%)

Consumer

Products265,207 266,042 (835) (0.3) 7,289 4,304 2,985 69.4

Industrial

Products51,630 49,784 1,846 3.7 778 360 417 115.8

Overseas 76,865 59,173 17,691 29.9 1,435 1,462 (27) (1.9)

Other 28,723 29,798 (1,075) (3.6) 1,016 971 44 4.6

Subtotal 422,427 404,799 17,629 4.4 10,518 7,098 3,419 48.2

Adjustment (70,421) (69,627) (794) － 300 115 184 160.0

Consolidated

total352,005 335,171 16,833 5.0 10,819 7,213 3,605 50.0

Financial Highlights

Consumer Products: Net sales were on-par with those of the previous fiscal year; operatingincome increased significantly

Industrial Products : Year-on-year increases in sales and incomeOverseas: Overall sales growth; operating income remained level year on year

(real net sales, which exclude the influence of exchange rate conversions, rose 5.2%)

8

Consumer products Business Initiatives and Results

Improved the product mix→Increasing income

Cultivating high-value added products Controlling sales promotion expenses

by stabilizing of sales prices of products

in the lower prices range

9

●LOOK Bath Antimold Fogger

●Ban Shower Deodorant

Improved the product mix：Cultivating of market creation-type products

(Million yen)

6000

7000

8000

9000

2009 2010 2011 2012 2013

Y-on-Y 114%

Launched Sep.2012

Consumer Products Business Initiatives and Results

Expanding the market for fungicides

Size of the fungicide market

Cultivating the market for aqueous antiperspirants and deodorantsamong 20-30 year old users

Year-on-year changes in deodorant purchasing pattern by age

10-19: 95%

20-29: 118%

30-39: 109%

(Lion Survey. Feb–Sep 2013 vs. Feb–Sep 2012)

10

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013

Middle-to-high prices range Lower prices range

0%

20%

40%

60%

80%

100%

2009 2010 2011 2012 2013

Forminig type Liquid typeLiquid type Forming type

Lower price range Middle-to-high price range

Consumer Products Business Initiatives and Results

Improved the product mix： Shift to high-value-added products

●Sales ratio of mid-to-high price range products in eye drops

● Sales ratio of foaming products in liquid hand soaps

11

Powder detergent Super-concentrated

liquid detergent

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013

Super-Concentrated Liquid Laundry Detergent Other

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013

Aroma Rich Non-Aroma RichConventional type Long-lasting scent type

Consumer Product Business Initiatives and Results

Improved the product mix： Shift to high-value-added products

● Sales ratio of super-concentrated liquid products in laundry detergents

● Sales ratio of long-lasting scent type products in fabric softeners

12

化学品事業本部 売上推移

0

20

40

60

80

100

120

2008 2009 2010 2011 2012 2013

0

5

10

15

20

Consolidated net sales Total sales of each countries Overseas net sales ratio

Billion yen （％）

Trends of net sales and net sales ratio of overseas business

Overseas Business Initiatives and Results

・ Net sales: Surpassed ¥100 billion(includes sales accounted for by the equity method)

・ Ratio of total consolidated net sales: 17%→21%

13

Oral care products (Toothpaste, toothbrush) Laundry detergent

Start the operation of new joint venture in the Philippines

◇Expanding new business area

Thailand

Indonesia Singapore Singapore Thailand

Overseas Business Initiatives and Results

Strengthening global and local brands

◇Aggressive introduction of new products

Malaysia

14

◇Enhancing production systems

Expanding production capacity of MES（Lion Eco Chemicals, Malaysia）

New plant for liquid laundry detergent（Malaysia）

New plant for oral care products（Thailand）

0%

50%

100%

2009 2010 2011 2012 2013

Overseas Japan

Overseas Business Initiatives and Results

Overseas capital expenditure ratio (monetary amount)

Increased

overseas investment

15

0

2000

4000

6000

8000

10000

12000

2007 2008 2009 2010 2011 2012 2013

Development of New Business Value Direct-to-consumer sales channels

Net sales of mail-order-business(Million yen)

Create a second pillarY-on-Y comparison

110%

・Reached fiscal 2014 sales goal of ¥10 billion ahead of schedule

・More than 150,000 regular customers

16

Financial Forecast for FY2014

17

Business Environment for FY 2014

Crude oil (Dubai) Domestic naphtha Crude palm oil

FY 2014 forecasts USD108/BBL JPY70,000/KL MYR2,600/ton

US Dollar Thai Baht Korean Won

FY 2014 forecasts JPY102.0 JPY3.10 JPY0.1

Domestic market environment

Household products market:

Flat unit prices, slight growth in

volume and revenue

OTC drug market:

Flat unit prices, slight decrease in

volume and slight decrease in revenue

Forecasts for GDP growth rate in 2014

(year on year)

ASEAN 5*: 5.4%

NIEs**: 3.8%

China: 7.3%*Thailand, Indonesia, Malaysia, Philippines and Vietnam

** South Korea, Hong Kong, Singapore and Taiwan

(Mitsubishi Research Institute, Inc. forecasts as of

December 2013 )

Overseas market environment

Forecasts for raw material prices and currency

Currency

Raw material prices

18

Highly unclear economic conditions expected to continue

Business Environment for FY 2014

Factors causing changes in results forecasts

Domestic

consumption

tax hike

Economic

slowdown

in emerging

nations

Rising

materials

costs

Steadily execute strategies while flexibly responding to

changes in the environment

Aim for record-high income (operating income and ordinary income)

19

(Million yen)

FY2014 FY2013Y-on-Y

Change

Y-on-Y

Change

(%)

FY2014

1HFY2013

1H

Y-on-Y

Change

Y-on-Y

Change

(%)

Net Sales 360,000 352,005 7,994 2.3 171,000 166,041 4,959 3.0

Operating

Income

% of Sales

12,000

3.3

10,819

3.1

1,181 10.9 3,000

1.8

2,872

1.7

128 4.4

Ordinary

Income

% of Sales

13,000

3.6

12,300

3.5

699 5.7 3,500

2.0

3,911

2.4

(411) (10.5)

Net Income

% of Sales

7,000

1.9

6,097

1.7

903 14.8 1,600

0.9

2,102

1.3

(500) (23.9)

FY2014 Consolidated Financial Forecast

20

FY2014

ForecastFY2013

Y-o-Y

Change

Y-o-Y

Change

(%)

FY2014

1H

Forecast

FY2013

1H

Y-o-Y

Change

Y-o-Y

Change

(%)

Consumer

Products247,500 242,707 4,793 2.0 116,000 113,617 2,383 2.1

Industrial

Products30,000 31,236 (1,236) (4.0) 14,500 14,846 (346) (2.3)

Overseas 77,000 72,656 4,344 6.0 38,700 35,841 2,859 8.0

Other 5,500 5,404 96 1.8 1,800 1,736 64 3.7

Total 360,000 352,005 7,995 2.3 171,000 166,041 4,959 3.0

【Net sales to external customers】 (Million yen)

FY2014 Consolidated Financial Forecast

By business segment

21

1.Qualitative Growth of Domestic Businesses

2.Quantitative Expansion of Overseas Businesses

3.Development of New Business Value

4.Enhancement of Organizational Learning Capabilities

Basic Policies and Main Measures for 2014

・Develop market-creating products and nurture high-value-added products

(strengthen health care brands, respond to consumption tax hike)

・Business reorganization to improve profitability in chemicals

・Promote group synergy (global brand & local brand strategy)

・Achieve profit from businesses that have been invested in up-front

(The Philippines, Lion Eco Chemicals)

・Expand direct-to-consumer sales business (quickly establish second pillar)

・Cultivate online shopping market

Strengthen foundations for growth

22

Measures for FY2014 Qualitative Growth of Domestic Businesses

BUFFERIN PREMIUM HALIX HOGURELABan Anti-Perspirant Deodorant

(Roll on type)

: Block "Sweat Gland"

Clinica series

Oral care products

ＯＴＣ drugs Antiperspirants and deodorants

◇Strengthen health care brands

23

Oral careCultivate middle- or high-pricedtoothpaste

Fabric care

Reinforce super-concentrated liquid

laundry detergent

and Long-lasting scent softener

Beauty careCultivate high-value-added products

Measures for FY2014 Qualitative Growth of Domestic Businesses

◇Cultivate high-value-added products

OTC Drugs

Enhance lineup of

mid-to-high price range products

Living care

Cultivate household cleaners

targeting unmet needs

24

◇Promoting group synergy

KODOMO Project

Thailand

IndonesiaSingapore

Malaysia

China

Philippines

Taiwan

South Korea

Hong Kong

Measures for FY2014 Quantitative Growth of Overseas Businesses

Developing global brands

Systema is in 9 countries and regions

Now expanding to all areas

Strengthen product lineup going forward

24

25

Measures for FY2014 Quantitative Growth of Overseas Businesses

Shokubutsu Monogatari ＨＡＮＡ Systema

MES=Methyl ester sulfonate

Lion Eco Chemicals: Expand the MES user base

Expand business in the Philippines

◇Achieve profit from businesses that have been invested in up-front

26

Measures for FY2014 Development of New Business Value

For increased disease resistance

For fulfilling,

radiant living

QOL CareMetabolic Care

◇Direct-to-consumer sales products business:

Rapid development and cultivation into Lion’s second pillar

27

Measures for FY2014 Development of New Business Value

Consumer

◇Expansion of online shopping market

Retailers’ online shopping sites

Specialized online direct-to-consumer

sales contractors

Online supermarkets

Lion’s website

Product salesProvision of daily

living information

28

(Million yen)

Original target

of FY2014

(announced

FY2012)

2014 revisions

Comparison with

original targets

ChangeChange

(%)

Net Sales 365,000 360,000 (5,000) (1.4)

Operating Income

% of Sales

20,00

5.5

12,000

3.3(8,000) (40.0)

Ordinary Income

% of Sales

21,000

5.8

13,000

3.6(8,000) (38.1)

Net Income

% of Sales

11,500

3.2

7,000

1.9(4,500) (39.1)

Divergence from“V-1 Plan” Consolidated Performance Targets

29

Progress through 2013

2014:

Strengthening foundations

toward “Vision 2020”

DomesticGrowth of new high-value-added

and market-creating products

Rapidly recovered

profitability by improving

the product mix

Divergence from initial targets

could not be sufficiently

compensated for

Nurture health care

brands/increase share of high-

value-added products

Profit structure reforms in

household and chemicals areas

OverseasExpand areas where Lion is

present

Reinforce production systems

Achieve profit from businesses

that have been invested in up-front

Strengthen group synergy

NewMet goals for direct-to-consumer

sales

Make direct-to-consumer sales

products a second pillar

Progress of the “V-1 Plan”

30

Strengthen

foundations

For

growth

Vision

2020

Qualitative Growth of Domestic Businesses

•Continued cultivation ofhigh-value-added products•Business reorganization in chemicals

Quantitative Expansion of

Overseas Businesses

•Promote group synergy

•Enter new areas

Development of New Business Value

•Expand direct-to-consumer sales

products business

•Utilize online shopping platforms

Enhancement of Organizational

Learning Capabilities

To Achieve “Vision 2020”

31

Dividends per share (annual)

Cash Dividends Paid to Shareholders

※120th Anniversary Commemorative Dividend Paid

In FY2011 as of the year-end: ¥1

2005 2006 2007 2008 2009 2010 2011 2012 2013

Consolidated 47.1 51.0 49.9 89.0 49.5 44.6 72.4 63.4 44.0

Non-

consolidated

54.7 47.2 53.2 93.0 65.4 46.1 82.4 86.9 52.6

45 5 5 5

5

5 5 5 5

(5)5 5 5 5

(5)5 5 5 5

0

2

4

6

8

10

12

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

year end dividend

Interim dividend

（yen）

（Plan）

１０

９

(１０)１０１０ １０ １０１1

１０※1 １０

Dividend payout ratio(％）

32

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.

33

Reference Materials

34

Statements of Income (Consolidated)

(Million yen)

FY2013 FY2012Y-o-Y

ChangeY-o-Y

Change(%)

Net sales 352,005 335,171 16,833 5.0

Cost of sales 153,336 145,385 7,950 5.5

Gross profit 198,668 189,785 8,882 4.7Selling, general and administrativeexpenses 187,849 182,572 5,276 2.9

Operating Income 10,819 7,213 3,605 50.0

Non-operating income 2,357 2,268 88 3.9

Non-operating expenses 876 917 (41) (4.5)

Ordinary income 12,300 8,564 3,735 43.6

Extraordinary income 1,552 367 1,185 322.2

Extraordinary loss 2,926 337 2,589 767.3

Net income before income taxes 10,925 8,594 2,331 27.1

Income taxes 4,053 2,044 2,009 98.3

Adjustment of income taxes 159 1,654 (1,495) (90.4)Minority interests in earnings ofconsolidated subsidiaries 615 659 (44) (6.7)

Net income 6,097 4,235 1,861 43.9

35

FY2013 FY2012 Change

Million

yen

% of

sales

Million

yen

% of

sales

Million

yen

% of

sales

Selling, general and

administrative expenses187,849 53.4 182,572 54.5 5,276 2.9

Sales commission 11,960 3.4 16,673 5.0 (4,712) (28.3)

Promotion expenses 78,384 22.3 71,229 21.3 7,154 10.0

Transportation and

warehousing expenses15,979 4.5 15,810 4.7 169 1.1

Advertising expenses 24,273 6.9 24,724 7.4 (450) (1.8)

Salaries and allowances 13,665 3.9 12,999 3.9 666 5.1

Research and

development expenses9,618 2.7 8,989 2.7 629 7.0

Other 33,966 9.7 32,146 9.6 1,819 5.7

Selling, General and Administrative Expenses (Consolidated)

36

Significant Extraordinary Income or Loss (consolidated)

FY2013 FY2012

Extraordinary

income

Gain on disposal of

noncurrent assets

Gain on sales of

investment securities

Other

41

1,428

83

Gain on disposal of

noncurrent assets

Gain on sales of

investment securities

299

67

Total 1,552 Total 367

Extraordinary

loss

Loss on disposal of

noncurrent assets

Impairment loss

Loss on valuation of

investment securities

Other

899

1,962

40

24

Loss on disposal of

noncurrent assets

Impairment loss

205

131

Total 2,926 Total 337

(Million yen)

37

Consolidated Balance Sheets (Selected) I

FY2013 FY2012 Change

Current assets 148,150 131,047 17,102

Cash and deposits 25,559 26,149 (590)

Notes and accounts receivable-trade

57,246 51,218 6,027

Short-term investments 25,429 16,358 9,070

Inventories 35,086 31,834 3,252

Noncurrent assets 133,948 126,547 7,400

Property, plant and equipment 68,989 61,955 7,034

Intangible assets 12,606 17,754 (5,147)

Investments and other assets 52,351 46,837 5,513

Total assets 282,098 257,595 24,502

(Million yen)

38

Consolidated Balance Sheets (Selected) II

FY2013 FY2012 Change

Current liabilities 131,656 96,142 35,513

Notes and accounts payable-trade 49,918 40,530 9,388

Short-term loans payable 9,611 5,943 3,667

Current portion of long-term loans payable 22,466 2,416 20,050

Accounts payable-other and accrued expenses 39,087 39,650 (563)

Noncurrent liabilities 26,208 47,288 (21,080)

Long-term loans payable 204 22,670 (22,466)

Provision for retirement benefits 19,353 19,231 122

Capital stock 34,433 34,433 －

Retained earnings 61,410 57,996 3,413

Treasury stock (16,755) (16,656) (99)

Valuation difference on available-for-sale securities 5,590 4,772 817

Minority interests 124,232 114,163 10,069

Total liabilities and net assets 282,098 257,595 24,502

(Million yen)

39

Capital expenditures Depreciation expenses

Plan Plan

Capital Expenditures and Depreciation Expenses (consolidated)

（Million yen）

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

3 ,9002 ,600

3 ,2004 ,300

7 ,2006 ,000 5 ,900 5 ,900 5 ,700 5 ,400

4 ,000

4 ,400

5 ,100

6 ,400

6 ,900

6 ,300 6 ,300 6 ,000 6 ,1005 ,800

11 ,000 11 ,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014

Jul-Dec

Jan-Jun

10 ,800

11 ,80012 ,300 12 ,400

11 ,200

7 ,900

14 ,100

12 ,000

7 ,000

8 ,300

40

FY2013 FY2012 Change

Net cash provided by (used in) operating activities 22,910 18,762 4,147

Net cash provided by (used in) investment activities (12,819) (9,172) (3,647)

Net cash provided by (used in) financing activities (2,772) (4,923) 2,151

Effect of exchange rate change on cash and cash

equivalents 709 602 106

Net increase (decrease) in cash and cash equivalents 8,027 5,273 2,754

Cash and cash equivalents at beginning of period 40,913 35,640 5,273

Cash and cash equivalents at end of period 48,941 40,913 8,027

Cash Flow (Consolidated)

(Million yen)

41

(Million yen)

Net Sales

FY2013 FY2012Y-on-Y

Change

Y-on-Y

Change(%)

Consumer Products265,207 266,042 (835) (0.3)

242,707 244,285 (1,577) (0.6)

Industrial Products51,630 49,784 1,846 3.7

31,236 30,159 1,077 3.6

Overseas76,865 59,173 17,692 29.9

72,656 56,093 16,563 29.5

Other28,723 29,798 (1,075) (3.6)

5,404 4,633 771 16.6

Net sales total 422,427 404,799 17,627 4.4

Sales to external customers total 352,005 335,171 16,833 5.0

Upper line: Net sales; Lower line: Sales to external customers

Net sales include internal net sales within and among segments.

Results by business segment

Net sales and sales to external customers

42

（USD/BBL） （MYR/ｔ）

Raw materialExpected average

annual price at the

beginning of FY2013FY2013 (actual) FY2012 (actual)

Y-on-YChange(%)

Crude oil USD115/BBL USD106/BBL USD109/BBL (2.8%)

Crude palm oil MYR3,300/ton MYR2,420/ton MYR2,890/ton (16.3%)

1. Trends in raw material prices

Crude oil (Dubai) Crude palm oil (Malaysia)

Business Environment for FY2013

0

500

1000

1500

2000

2500

3000

3500

4000

4500

08/1 09/1 10/1 11/1 12/1 13/1

0

20

40

60

80

100

120

140

08/1 09/1 10/1 11/1 12/1 13/1

43

Business Environment for FY2013

2. Exchange rate fluctuations

Stronger yen

Weaker yen

Jan 2011 = standard

CurrencyExpected average annual

price at the beginning of

FY2013

FY2012

(actual)

FY2011

(actual)

Y-on-Y

Change(%)

USD JPY85.0 JPY98.0 JPY80.1 22.3% (weak yen)

Thai Baht JPY2.70 JPY3.18 JPY2.58 23.3% (weak yen)

Korean Won JPY0.0750 JPY0.0898 JPY0.0715 25.6% (weak yen)

-30

-20

-10

0

10

20

30

40

Jan-11

Mar-

11

May-

11

Jul-

11

Sep-11

Nov-

11

Jan-12

Mar-

12

May-

12

Jul-

12

Sep-12

Nov-

12

Jan-13

Mar-

13

May-

13

Jul-

13

Sep-13

Nov-

13

US$

Thai Baht

Korean Won

44

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.