TRANSLATION Following is an English translation of the Report pursuant to Article 24, Paragraph 1 of the Financial Instruments and Exchange Act. This Report is presented merely as supplemental information. Securities Report (For the 60th fiscal year, from January 1, 2019 to December 31, 2019) Unicharm Corporation (E00678) The 60th Fiscal Year (from January 1, 2019 to December 31, 2019) Securities Report 1. This report is the Securities Report submitted pursuant to Article 24, Paragraph 1 of the Financial Instruments and Exchange Act via the Electronic Disclosure for Investors’ Network (“EDINET”) as set forth in Article 27-30-2 of the same Act, generated and printed with a Table of Contents and page numbers added. 2. The end of the report contains the Independent Auditor’s Reports that were attached to the above Securities Report submitted via the above method and the Internal Control Report and Confirmation Note that were submitted with the Securities Report. Unicharm Corporation Table of Contents The 60th Securities Report Page Cover ................................................................................................................................................................... 1 Part 1. Information on the Company ........................................................................................................ 2 I. Overview of the Company .................................................................................................................... 2 1. Key financial data and trends .......................................................................................................................................... 2 2. History ............................................................................................................................................................................ 5 3. Description of business ................................................................................................................................................... 6 4. Information on subsidiaries and affiliates ....................................................................................................................... 8 5. Employees ..................................................................................................................................................................... 10 II. Business Overview ................................................................................................................................ 11 1. Management policies, management environment, and issues facing the Group ........................................................... 11 2. Business and other risks ................................................................................................................................................ 12 3. Management’s analysis of financial position, operating results and cash flows............................................................ 14 4. Important business contracts ......................................................................................................................................... 22 5. Research and development activities ............................................................................................................................ 23 III. Equipment and Facilities .................................................................................................................... 27 1. Overview of capital investments ................................................................................................................................... 27 2. Major facilities .............................................................................................................................................................. 27 3. Plans for new additions or disposals ............................................................................................................................. 28 IV. Corporate Information ........................................................................................................................ 30 1. Information on the Company’s shares .......................................................................................................................... 30 2. Acquisition of treasury shares ....................................................................................................................................... 39 3. Dividend policy ............................................................................................................................................................. 41 4. Corporate governance ................................................................................................................................................... 42 V. Financial Information .......................................................................................................................... 64 1. Consolidated financial statements ................................................................................................................................. 65 2. Non-consolidated financial statements ........................................................................................................................ 132 VI. Information on Transfer and Repurchase of the Company’s Shares ................................. 146 VII. Reference Information on the Company ..................................................................................... 147 1. Information on the parent company or equivalent of the Company ............................................................................ 147 2. Other reference information ........................................................................................................................................ 147 Part 2. Information on Guarantors for the Company ..................................................................... 148 Independent Auditor’s Reports Internal Control Report Confirmation Note 【Cover】 【Document Submitted】 Securities Report (“Yukashoken-Houkokusho”) 【Article of the Applicable Law Requiring Article 24, Paragraph 1 of the Financial Instruments and Submission of This Document】 Exchange Act 【Filed to】 Director-General of the Kanto Local Finance Bureau 【Date of Filing】 March 26, 2020 【Business Year】 The 60th Fiscal Year (from January 1, 2019 to December 31, 2019) 【Company Name】 Unicharm Kabushiki-Kaisha 【Company Name (in English)】 Unicharm Corporation 【Position and Name of Representative】 Takahisa Takahara, Representative Director, President and Chief Executive Officer 【Location of Head Office】 182, Shimobun, Kinsei-cho, Shikokuchuo-shi, Ehime, Japan (The above address is the official registered location of the head office. Actual operations are based as follows.) Sumitomo Fudosan Mita Twin Bldg., West Wing, 3-5-27, Mita, Minato-ku, Tokyo, Japan 【Phone No.】 +81-3-3451-5111 (switchboard) 【Contact for Communications】 Hirotatsu Shimada, Executive Officer, General Manager of Accounting Control and Finance Division 【Nearest Contact】 Sumitomo Fudosan Mita Twin Bldg., West Wing, 3-5-27, Mita, Minato-ku, Tokyo, Japan 【Phone No.】 +81-3-3451-5111 (switchboard) 【Contact for Communications】 Hirotatsu Shimada, Executive Officer, General Manager of Accounting Control and Finance Division 【Place Where Available for Public Head Office, Unicharm Corporation Inspection】 (Sumitomo Fudosan Mita Twin Bldg., West Wing, 3-5-27, Mita, Minato-ku, Tokyo, Japan) Unicharm Kyoshinkan (Resonance Hall), Unicharm Corporation (131, Shimobun, Kinsei-cho, Shikokuchuo-shi, Ehime, Japan) Osaka Office, Unicharm Corporation (Sumitomo Nakanoshima Bldg., 3-2-18, Nakanoshima, Kita-ku, Osaka-shi, Osaka, Japan) Tokyo Stock Exchange, Inc. (2-1, Nihonbashi Kabutocho, Chuo-ku, Tokyo, Japan) - 1 - Part 1. Information on the Company I. Overview of the Company 1. Key financial data and trends (1) Consolidated financial data IFRS Fiscal year Date of 57th 58th 59th 60th transition January 1, December 31, December 31, December 31, December 31, Year ended 2016 2016 2017 2018 2019 Millions Net sales – 604,653 641,647 688,290 714,233 of Yen Millions Profit before tax – 75,835 92,926 91,561 69,538 of Yen Profit attributable to owners Millions – 46,971 52,772 61,353 46,116 of parent of Yen Comprehensive income Millions attributable to owners of – 25,604 58,849 43,016 52,458 of Yen parent Equity attributable to owners Millions 349,714 352,098 387,567 441,456 473,073 of parent of Yen Millions Total assets 656,200 668,592 736,644 795,483 864,003 of Yen Equity attributable to owners Yen 579.50 587.61 652.91 736.39 791.25 of parent per share Basic earnings per share Yen – 79.06 89.85 103.73 77.53 Diluted earnings per share Yen – 76.63 87.06 101.44 77.05 Ratio of equity attributable to % 53.3 52.7 52.6 55.5 54.8 owners of parent Return on equity attributable % – 13.4 14.3 14.8 10.1 to owners of parent Price earnings ratio Times – 32.3 32.6 34.3 47.7 Cash flows from operating Millions – 103,604 98,086 110,867 84,936 activities of Yen Cash flows from investing Millions – (42,612) (38,778) (113,400) (69,235) activities of Yen Cash flows from financing Millions – (21,540) (30,582) (27,723) (23,062) activities of Yen Cash and cash equivalents at Millions 101,966 138,043 169,903 135,065 128,787 end of fiscal period of Yen Employees 15,500 15,843 15,757 16,207 16,304 ( ) represents the average number Persons of part-time employees not (4,309) (1,796) (1,802) (1,794) (1,781) included in