FANCL CORPORATION has formulated its third Medium-Term Management Plan (FY Mar/2022 to FY Mar/2024), the first year of which is FY Mar/2022.

• Notice regarding 3rd Medium Term Management Plan(FY Mar/2022 to FY Mar/2024)
• Medium Term Management Plan(FY Mar/2022 to FY Mar/2024)

Through our 1st Medium-Term Management Plan starting FY Mar/2016 which focused on an “advertising-led growth strategy” (FY Mar/2016-2018) , the Group made a V-shaped recovery in its earnings, and established a sustainable growth foundation. Subsequently, in 2018, we formulated VISION2030* as our vision for 2030, the 50th anniversary of our founding. In order to realize this vision, we positioned the 2nd Medium-Term Management Plan, “Action 2020" (FY Mar/2019-2021), as a period in which to "enhance profitability and solidify our foundation for the full-scale growth of overseas businesses.”

In the 3rd Medium-Term Management Plan (FY Mar/2022-2024), we have set forth seven challenges under the title "Forward 2023" – Conquer Adversity and Shape our Future. By further building on our initiatives set out in "Action 2020," we will work to eliminate new "negatives" that have arisen as a result of the COVID-19 pandemic, and respond quickly to changes in the social environment to achieve sustainable growth in Japan and overseas.

Cosmetics Business

FANCL Cosmetics	Policy The company will promote brand diversification based on the absolute value ("safety" and "peace of mind") offered by Mutenka cosmetics, launching new, highly effective products and promoting understanding of the ability of Mutenka products to enhance the skin's natural functions. Basic Strategy Seek to develop new target groups by developing a brand system for each target. The FANCL Expand the number of skincare users by renewing one basic skincare line every year. Strengthen the face wash category to become the No. 1 brand in this market. Expand number of serum users by supplementing CORE EFFECTOR with a new, high-function serum. NEO Strengthen the development of Beauty BOUQUET and AND MIRAI by expanding awareness and sales according to their respective brand characteristics. Prestige NEOF CORPORATION established in April 2021, to newly develop the independent "Prestige" brand separate from FANCL during FY Mar/2022. Overseas Strategy Develop e-commerce in the Asian region through diversification of brands.
ATTENIR	Policy Based on the philosophy of "luxury brand quality at one-third of the market price or lower," work to evolve ATTENIR from a domestic brand into a global brand. In Japan, aim to evolve ATTENIR as a "total beauty brand" by strengthening skin care products and renewing and expanding the lineup of beauty supplements. Overseas, develop products adapted to local needs, and supplement cross-border e-commerce in China with general trade sales. In other Asian markets, begin full-scale global expansion through cross-border e-commerce.
boscia	Policy Enhance brand value and increase sales by launching premium lines and by promoting to "national brand" status in the U.S. and "international brand" status in Europe, Australia, China, and other markets. Further strengthen e-commerce for the post-COVID-19 era. Expand sales areas by strengthening ties with leading retailers in each country. Establish a new premium line of products for cosmetics specialty stores and department stores.

Health Food Business

Policy
Based on the three pillars of "strengthening our existing supplement business," "personalization," and "creating trial opportunities (BtoB business) through the development of food formulations," the company aims to create a highly profitable business model that responds to new needs arising from the declining birthrate, aging society, and COVID-19.

Leverage IT to combine the strengths of online and catalogue and direct store channels to achieve OMO that is unique to FANCL, for the purpose of maximizing the value of the customer experience.

Online and Catalogue Sales

• Distribute information over the web to achieve faster and more personalized customer service.
• Strengthen presence on external online and catalogue platforms as a new customer contact point and “experience” vector.

Direct Store Sales

• Strengthen communication and counseling capabilities of store staff to realize high-quality customer service.

Wholesale Sales

• Conduct sales promotion activities that integrate mass advertising of core products with retail store media to maximize sales per store.

• Aim to create synergies in the areas of product development and channel infrastructure.
• Promote the development and launch of supplements that make use of Kirin's proprietary materials in areas for which market needs are increasing due to the COVID-19 pandemic, such as immunity.
• Jointly develop cosmetic ingredients with Kirin with the aim of improving cosmetics products’ functionality.
• Promote joint research in the fields of Immunity, Brain function, and Gut microbiome to cultivate future business growth.

Management Foundation

Promotion of SDGs

In response to a changing world, we have reviewed and adjusted our priorities based on the FANCL Group Sustainable Declaration, "Building a Bright Future Together" (formulated in 2018), and will be promoting the following three priority themes: Environment, Healthy Living, and Local Communities and Employees.

The Company will maintain its performance-linked distribution of profit to shareholders with stable dividend payouts.

We are targeting consolidated net sales of ¥120.0 billion and operating income of ¥15.0 billion for FY Mar/2024, the final year of the Medium-Term Management Plan. In respect to KPIs, we will supplement ROE (Return on Equity) with the introduction of ROIC (Return on Invested Capital), a new indicator; together, these KPIs will help us to promote management based on awareness of the profitability and investment efficiency of each business.

Based on “Accounting Standard for Revenue Recognition” introduced from FY Mar/2022.
Net sales and operating income for FY Mar/2021 are estimates based on above standard.