FANCL REPORT 2022

9/64

¥9.7 billion15.6% down YoY¥103.9 billion¥58.8 billion0.7% down YoY¥7.5 billion4.7% down YoY¥38.4 billion1.6% up YoY¥3.9 billion22.6% down YoY¥6.7 billion16.9% down YoYwtiCosmetics BusinessNutritional Supplements BusinessOther BusinessesIntroductionSalesOperating incomeSalesOperating incomeSalesOperating lossSalesOperating income07Note:FANCL has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29) effective from FY Mar.2022. Comparison with the previous fiscal year is based on estimated values if the same standard had been applied from the previous fiscal year.-¥0.02 billion¥0.2 billion operating incomePrevious period Hatsuga genmai KIN-no-IBUKIManagementAlthough results have been strong for ATTENIR in Japan and overseas, sales fell for FANCL Cosmetics and boscia mainly due to the impact of COVID-19, which led to a decline in overall business sales. Against this backdrop, sales have been brisk for FANCL’s corecosmetics products such as the renewed ENRICH+ and MILD CLEANSING OIL. For ATTENIR, sales have been strong for our new basic skincare product Dress Snow and SKIN CLEAR CLEANSE OIL, while cross-border e-commerce targeting China contributed to this strength. For boscia, wholesale sales to real stores were sluggish, whereas sales were brisk in U.S. Amazon and overseas markets such as China and Europe.Operating income declined due to a variety of factors including the decrease in gross profit on the back of lower sales as well as aggressive advertising spending in the second half of the fiscal year despite efforts to utilize sales promotion expenses efficiently.In Japan, sales were weak for Calolimit® and Naishi Supportdue to changes in diet market conditions and fiercer competition. Overseas, however, cross-border e-commerce salesgrew significantly to China centered on age bracket-based supplements, resulting in anincrease in sales for the overall business.Operating income declined due to a variety of factors. In addition to a deterioration in the cost of sales ratio as a result of the increase in depreciation expenses for the newly established Mishima Factory (supplements plant), these factors included an upswing in depreciation expenses following the launch of operations at the Kansai Logistics Center,and an increase in research and development expenses.Overall business sales decreased due to lower sales of Hatsuga genmaiand Kale Juice, as well as the absence of sales of non-woven masks that were sold in the previous fiscal year.Operating income declined due to the decrease in gross profit on the back of lower sales.1.1% down YoYBusiness ModelSustainabilityData SectionFY Mar/2022 ResultsENRICH+Naishi SupportSleep & Fatigue CareKale Juice contains vegetables, lactic acid bacteria, and bifidobacteriaSKIN CLEAR CLEANSE OILPersonal ONEFANCL original cutting boards