A Quick Guide to Unicharm
(Chapter 3: Unicharm’s objectives)

Unicharm aims to achieve a prosperous, cohesive society where people all over the world can live in equality and comfort, their unique traits are respected, they support one another with kindness, and everyone’s hearts are as one. To this end, we formulated our 11th Medium-term Management Plan for the period from January 1, 2021 to December 31, 2023. In accordance with management with resonance, we revise our medium-term management plans—which we formulate once every three years—on a rolling basis, analyzing current conditions and predicting changes in the operating environment annually to determine our next course of action in response to such changes and revise our policies. When carrying out such reviews and revisions, we revise our strategies using the feedforward concept, asking ourselves what actions must be taken to achieve our future goals, without wedding ourselves to our initial plan.

To achieve the top share of the nonwoven fabric and absorbent material businesses in the global market by 2030, Unicharm must continuously grow its net sales at a compound annual growth rate (CAGR) of approximately 7%. The Company has set forth targets of 17% for both core operating income ratio and return on equity (ROE) to achieve such business expansion using finite management resources. Accordingly, it must further improve its profitability and efficiency. However, the operating environment is becoming increasingly uncertain due to several factors,such as COVID-19, the emergence of geopolitical risks, rising inflation worldwide, and the accelerating global trend toward emphasizing initiatives for achieving the Sustainable Development Goals (SDGs) due to the spread of digital technology. As a result, along with strategic business investments, it is becoming extremely difficult to accomplish the strategies we projected in 2020 while balancing sales growth with profitability and efficiency.

Amid such circumstances, Unicharm has been implementing strategies tailored to addressing changes in each of its operating environments and accelerating the creation of new markets by making new value proposals during the period of the 11th Medium-Term Management Plan. In Asia,where the nursing care market is emerging, these efforts have included driving forward business development that contributes to the extension of healthy life expectancy, and promoting pet care products in step with an increase in the number of dogs and cats being kept as pets. In this way, we are establishing a foundation for transforming our business and area portfolios into ones that anticipate changes in consumer behavior due to demographic dynamics and trends. In existing categories, for example, we are promoting and expanding period underwear and other new products in feminine care products globally, while in baby care and childcare products we are driving market growth through the provision of value-added products catering to the characteristics of customers in various countries and regions, such as mosquito-repellent disposable baby diapers and disposable baby diapers containing olive oil that are closely attuned to local lifestyle habits. In November 2022, we also formed a capital and business alliance with Jiangsu Jijia Pet Products Co., Ltd. (JIA PETS), a major pet food manufacturer in China, to promote the creation of new markets. With this alliance, the Company is establishing a foundation for the growth of the Pet Care Business in China.

We will continue to establish a foundation for continuous sales growth by making proactive investments to deliver new value and create new markets in accordance with the growth scenarios of each category in each country and region.