Lion : All Pages (17.5MB)

Corporate Governance

Performance/Data

Message from the President

Page 9

Page 15

Message from the Director

Responsible for Finance

P.52

Message from the Chairman

P.54

Messages from External Directors

Our Purpose
Lion at a Glance	5
Creating Habits and Achieving Business Growth	6
Feature
Generating Social and Economic Value through the
Creation of Oral Care Habits	7
Value Creation Process	8
Our Strategy
Message from the President	9
Message from the Director Responsible for Finance	15
Vision2030 and the Medium-term Management Plans	18
Three Growth Strategies
1. Accelerate Growth in Four Fields of Value Creation
Business Development Aimed at the Evolution
and Expansion of Habit Redesign	19
Oral Health	20
Infection Control	24
Smart Housework	25
Expansion of the Overseas Business	26
Research and Development	29
Intellectual Property	31
2. Transform Our Business Foundations for Growth
Digital Transformation	32
Supply Chain Management	33

3. Generating Dynamism to Realize Innovative Change.

Human Capital

Sustainability
Message from the Director Responsible for Sustainability	40
Sustainability Initiatives
Reinforcing Initiatives to Address the
Sustainability Material Issues	41
Top-Priority Sustainability Material Issues:
Creating Healthy Living Habits	45
Promoting Environmental Initiatives for a
Sustainable Planet	47
Disclosure Based on the TCFD Recommendations	50
Corporate Governance
Message from the Chairman	52
Messages from External Directors	54
Corporate Governance	56
Compliance	62
Risk Management	63
Leadership Team	65
Performance/Data
Results by Business Segment	67
Consumer Products Business (Japan)	68
Overseas Business	69
Industrial Products Business	70
Key Financial Data	71
Key Non-Financial Data	72
External Evaluations and Participation in
External Organizations	73
Corporate Overview and Stock Information	74

Editorial Policy

Lion Integrated Report 2024 is intended to provide Lion's shareholders, investors and other stakeholders with key information about the Company's initiatives for increasing its corporate value over the medium to long term by fulfilling its purpose of "Make a difference in everyday lives by redesigning habits: ReDesign" and facilitating deeper understanding of the Lion Group.

Reporting Period: From January 1 to December 31, 2023 (fiscal 2023) (Some information covers activities in 2024.)

Scope of Report: Lion Corporation and all of its consolidated subsidiaries, in principle.

Note: Where the scope of coverage of reported activities or data differ from the above, a description is provided. Accounting Standards Applied: International Financial Reporting Standards (IFRS)

Referenced Guidelines:

International Integrated Reporting Framework issued by the IFRS Foundation
Guidance for Integrated Corporate Disclosure and Company-Investor Dialogue for Collaborative Value Creation issued by the Ministry of Economy, Trade and Industry

Regarding Forward-Looking Statements

This report contains forward-looking statements on subjects that include matters related to future business plans, corporate strategies and forecasts of performance. Such statements were formulated based on information that was available at the time of the preparation of this integrated report and contain uncertainties regarding such factors as economic conditions, market trends and foreign currency risks. Actual results may differ from the information presented in these forward-looking statements.

Lion's Disclosure

	Financial Information			Non-Financial Information
	• Securities Report	Lion Integrated Report	• Corporate Governance Report
	• Lion's Sustainability: SDG-Related
		2024
	(Japanese only)			Initiatives (Japanese only)
	• Summary of Consolidated				LION's
	Financial Statements
Reports				SUSTAINABILITY
				～より良い生活習慣づくりで取り組むSDGs～
	• Convocation of the Annual				2023

	General Meeting of Shareholders
	• LION LETTER business report
	(Japanese only)
	Investor Relations			Sustainability
Company
Website
	https://www.lion.co.jp/en/ir/			https://www.lion.co.jp/en/sustainability/

Lion Integrated Report 2024

Corporate Governance

Performance/Data

In fulfilling its purpose, Lion has built up a portfolio of management resources over many years of sincere dedication to manufacturing and redesigning habits for the better. We will make every effort to put these resources to work for even more people, regions and situations in daily life. Our aim is to increase corporate value by helping to make daily living and society better.

Clicking on this icon, which can be found at the top right of every page, will take you back to this Integrated Report 2024 Overview. Please use this function to get an overall feel for the content as you read.

Purpose

Make a difference in everyday lives by redesigning habits

Vision2030 Long-term Strategic Framework

Management Vision

Becoming an advanced daily healthcare company

Pages 5-8

This section describes how we create social and economic value by fulfilling our purpose: Make a difference in everyday lives by redesigning habits: ReDesign, incorporating the history of our business growth and our value creation process.

Pages 9-51

Three Growth Strategies

1 Accelerate growth in four fields of value creation

Oral Health	Infection Control
Smart Housework	Well-Being

Expansion of the Overseas Business

Source of Our Competitive Advantage

Research and Development Intellectual Property

2 Transform our business foundations for growth

Digital	Supply Chain
Transformation	Management

3 Generate dynamism to realize innovative change

Human Capital

Reinforcing Initiatives to Address the

Sustainability Material Issues

Top-Priority Sustainability Material Issues

Creating Healthy Living Habits

Promoting Environmental Initiatives for

a Sustainable Planet

Response to TCFD Recommendations

This section examines the medium- to long-term strategies that will enable us to achieve our management vision for 2030 of "Becoming an advanced daily healthcare company." Centered on two main themes- Three Growth Strategies and Reinforcing Initiatives to Address the Sustainability Material Issues-this section describes our strategic approach and progress.

Corporate Governance

Pages 52-66

This section describes our approach, systems and initiatives for corporate governance aimed at improving the transparency of our corporate activities, reinforcing our supervisory functions and expediting decision-making.

Business Segments

Consumer Products Business

Overseas Business

Industrial Products Business

Performance/Data

Pages 67-74

This section includes information on the market environment for each business segment (risks and opportunities), the progress of our medium- to long-term strategies and the Group's financial and non-financial data.

Corporate Governance

Lion Integrated Report 2024

Corporate Governance

Performance/Data

Lion at a Glance

Net Sales by Segment

Core Operating Income by Segment

Employees 7,550 (consolidated)

						Other Business	Industrial
Industrial			0.4%	Products

Products							Business
Business							17.0%
9.5%		Net Sales
		¥402.7billion
		(2023)
Overseas								Consumer	Overseas

Business						Products
					Business
33.3%								Business
							48.3%
	56.8%

Other Business

7.7%

Core

Operating Consumer

Income Products

¥20.1 billion Business

(2023)27.0%

Offices and Other Work Sites

	Domestic	Overseas
OfficesOtherand	12	11
Offices	6	Affiliates
Research	2	9
Centers

Note: Segment sales figures are external sales, net of intersegment sales and adjustments. Page 67: Results by Business Segment

Plants

Consumer Products Business

In Japan, our Consumer Products Business offers a wide range of products and services for total care, from prevention of issues to maintenance and ease-of-use. Products include toothpastes, laundry detergents and over-the-counter (OTC) pharmaceuticals.

Other		Oral Care
22.7%
	27.2%
	Net Sales

Pharmaceuticals	¥267.3 billion
9.9%	(2023)	Beauty Care
Living Care		9.1%

8.3%	Fabric Care 22.8%

Overseas Business

Lion operates businesses in Southeast and South Asia and Northeast Asia, providing products useful for daily living, inclusive of all cultures and languages.

Northeast Asia

38.9%

Net Sales

¥148.0billion (2023)

Southeast and

South Asia

61.1%

Industrial Products Business

Our Industrial Products Business comprises the Chemical Products Business, which handles surfactants, electro- conductive carbon and other chemicals; the Detergents for Institutional Use Business, which sells detergents and hand soaps for hotels and restaurant kitchens; and Other Business.

Chemical Products

Mobility	Electronics	Eco Chemicals	Care Chemicals
• Rubber processing	• Electro-conductive	• Concrete admixtures	• Surfactants
agents	carbon		• Cosmetics ingredients
• Rubber additive agents	• Pressure-sensitive
	adhesives

Detergents for Institutional Use

Dishwasher	Alcohol sanitizers	Hand soaps	Vegetable-washing
detergents			detergents

Lion Integrated Report 2024

Corporate Governance

Performance/Data

Creating Habits and Achieving Business Growth	2023

Lion's origins lie in soap and toothpaste. "Fulfilling a spirit of love" since our founding, we have sought to support mental and		Net sales: ¥402.7billion

physical health by providing consumers with superior products while engaging in communication and educational activities aimed		Overseas sites: 11

at promoting better living habits. We recognized long ago that global environmental conservation is an issue that the whole world
Make a difference in everyday lives by redesigning habits
shares and have continuously worked to develop and propose environmentally friendly products and habits. By addressing lifestyle
and social issues through better living habit proposals, we aim to contribute to consumers' everyday lives while achieving			IFRS
sustainable business growth.

			Hand
Net Sales		Dishwashing	washing
Vegetable

	washing
	Laundry
	Tooth
	brushing
Lion founder
Tomijiro Kobayashi	1950	1990	2000	2010	2020
1891

Prevalence of cavities among children	Diversifying oral health issues	From oral to overall health
Lifestyle and	Laundry habits	Health hazards caused by E. coli	Global COVID-19 pandemic
Social Issues

Environmental problems

Main Initiatives for Creating Habits

Commencement of activities to promote and instill tooth brushing habits	Response to increasingly diverse oral health issues
Hosting of events to teach children correct	Lion F Cream
tooth brushing techniques	Japan's first toothpaste containing
(Currently called the Oral Health Event of	fluoride for the prevention of cavities
Tooth Brushing for Children)
Oral Care	Dentor Systema Lion Series
	For the prevention of gum disease

Spreading awareness of and education about correct laundry techniques	Response to diverse consumer needs and rising awareness of cleanliness
Hosting laundry workshops to teach	Mama Lemon	KireiKirei
correct techniques for washing clothes	Dishwashing soap	A hand soap
using soap	that is gentle on the	containing
Cleanliness and	hands and can also	antibacterial
be used to wash	ingredients
Hygiene	vegetables

Promotion of oral healthcare that leads to overall health

CLINICA	Activities to spread
Advantage	awareness of and
Series	educate people in
For preventive	Asia about oral care
dentistry	habits

Contribution to clean and hygienic lifestyles in Asia

Rollout of KireiKirei across Asia and activities to spread awareness of and educate people about handwashing habits

Use of plant-based raw materials

Addressing various environmental issues using advanced technologies

Establishing environmentally friendly habits through products and communication

Environmental

Protection

Plant-derived Lion Laundry Soap

Japan's first plant-based household laundry soap

Dash

Addressing the issue of foaming, polluted rivers using a highly biodegradable surfactant

Murin TOP Addressing the issue of eutrophication with the launch of the industry's first phosphate-free detergent

Promoting refill habits

NANOX one

A powerful laundry detergent that cleans thoroughly while extending the lifespan of clothes

Lion Integrated Report 2024

Corporate Governance

Performance/Data

Generating Social and Economic Value through the Creation of Oral Care Habits

Instilling Tooth Brushing Habits

When Lion was founded in the late 1800s, tooth brushing was not yet widely practiced in Japan, and around 96% of children had cavities. Senior management at the time felt that the situation presented a real crisis with regard to the nation's future, so in addition to developing and marketing oral care products, Lion began carrying out activities to spread awareness and educate people about oral health. Over the years, Lion has continued to conduct activities to firmly instill oral

care habits in society. These activities include the Oral Health Event of Tooth Brushing for Children, which has taught children correct tooth brushing methods for more than 80 years; the establishment of the Lion Foundation for Dental Health, which spreads awareness of and educates people about oral health; and the use of advertising to raise awareness of the importance of tooth brushing. As a result, approximately 80% of consumers brush their teeth at least twice a day, a fivefold increase over the past 50 years.

Concurrently, the proportion of elementary school children with cavities- previously an issue-has fallen to around one in three, thus indicating that the establishment of correct oral care habits has significantly helped to improve people's oral health. Meanwhile, the size of the toothpaste market has increased fourfold. In this way, creating habits that contribute to better consumer health while revitalizing product markets has driven the growth of Lion's businesses.

Social valueEconomic value

Toothpaste Market Scale, Percentage of Consumers Who Brush At Least Twice a Day and Percentage of Children Aged 10 to 14 Years with Cavities (Japan)

Toothpaste market scale Percentage of people brushing at least twice a day Percentage of children aged 10 to 14 years with cavities

(Billions of yen)			(%)
140			100
120			80

100
80			60

60			40

40
20			20

0			0
1969	1981	2011	2022

	Percentage of
Fostering tooth	Consumers Who Brush
At Least Twice a Day
brushing habits	Approx. fivefold

	increase*

Improved oral health	Expansion and vitalization
	of the toothpaste market
Proportion of children aged	The toothpaste market
10 to 14 with cavities		Approx.
Approx. 1in 3*
fourfold increase*

		*Comparison between 1969 and 2022

Sources: Market size from a Lion Corporation survey; tooth brushing frequency and percentage of children aged 10 to 14 years with cavities (treated and untreated) from Survey of Dental Diseases by the Ministry of Health, Labour and Welfare.

Lion Integrated Report 2024

Corporate Governance

Performance/Data

Value Creation Process

In fulfilling its purpose, Lion has built up a portfolio of management resources over many years of sincere dedication to manufacturing and redesigning habits for the better.

To achieve our management vision for 2030, "Becoming an advanced daily healthcare company," we will create "Positive Habits" for even more people, regions and situations in daily life, with a focus on our four fields of value creation, which emphasize such habits. Our aim is to increase corporate value by helping to make daily living and society better.

Inputs

Management resources

cultivated over many

years of creating habits

Consumer research and technological development capabilities

Stable

A sincere commitment supply

chain

to manufacturing

		Trust of
		suppliers
	Products and

Make a difference in everyday lives by redesigning habits
		brands that are
		widely loved by
		customers
Creation of better	Diverse
living habits	human
resources
	Stable
	financial
	base

Business Activities

Redesigning habits for

even more people,

regions and situations

in daily life

Vision2030

Advance our three growth

strategies

Accelerate growth in four fields of value creation
Transform our business foundations for growth
Generate dynamism to realize innovative change

Reinforcing initiatives to address the Sustainability Material Issues

Becoming an advanced daily healthcare company

Outputs

Creation and proposal of

"Positive Habits"

Value creation through habits	Social
Benefit/quality of habit	value

×
Frequency of engaging in habit
×
No. of people adopting habit

Priority Fields

Oral Health	Infection Control
		Economic
Smart	Well-Being	value
Housework

Outcomes

Improvement of daily

living and society

Vision for 2030

Enhance consumer QOL

Total number of persons provided with
products, services and information aimed at creating healthy living habits: 1 billion
Oral care habits: 500 million people
Cleanliness and hygiene habits: 500 million people

Contribute to the realization of a decarbonized,

resource circulating society

Lifecycle CO2 emissions: 30% reduction1
Petrochemical-derivedplastic usage: 70% or less
Lifecycle water usage: 30% reduction2

Compared with 2017, absolute quantity
Compared with 2017, per unit of net sales

Envisioned Financial Performance

in 2030

Net sales Approx.¥600 billion

(Approx. 50% from the Overseas Business)

EBITDA1	Approx.¥80 billion
Core operating	Approx.¥50 billion
income2
ROIC3	8-12%
ROE	10-14%

A higher level of corporate governance

Capital reinvestment and distribution

	Diversifying	Aging	Environmental	Infectious	Digital
Changes in	values	population	problems	disease risk	transformation

society

1.	Calculated as the sum of core operating income and depreciation
	and amortization (excluding that of right-of-use assets)
2.	Calculated by subtracting selling, general and
	administrative expenses from gross profit
3.	Calculated as net operating profit after tax (NOPAT)
	divided by the average invested capital (total equity plus
	interest bearing liabilities) during the period

Lion Integrated Report 2024					Performance/Data
Contents	Our Purpose	Our Strategy	Corporate Governance

Message from the President

Evolving into an Organization That Consistently Creates Positive Habits