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2025 Q3 Results (January–September) and 2025 Outlook November 10, 2025 Shiseido Company, Limited Kentaro Fujiwara President and CEO Ayako Hirofuji Chief Financial Officer
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In this document, statements other than historical facts are forward-looking statements that reflect our plans and expectations. These forward-looking statements involve risks, uncertainties, and other factors that may cause actual results and achievements to differ from those anticipated in these statements.
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Where We Are Today and Where We Are Heading 3 Structural reforms was a foundation building process; Shiseido is now decisively shifting towards a strong growth ⚫ Sales momentum: Returned to growth trajectory ➢ Impact from Travel Retail market contraction and the drop in Drunk Elephant sales has subsided ➢ Achieved positive growth in Q3 ➢ Key brands and innovation are accelerating growth ⚫ Structural reforms: Bold execution to shape the future ➢ Early retirement program "Next Career Support Plan" at Global HQ ➢ Marks the completion of all major initiatives under Action Plan 2025-2026; On track to deliver benefits of ¥25.0 bn in 2026 ⚫ Profitability / Cash generation: Reform and financial discipline bearing fruit ➢ Core operating profit exceeded ¥30.0bn in Q3 YTD; approaching full-year target of ¥36.5bn ➢ Free cash flow for the year is expected to exceed initial expectations ⚫ Americas turnaround: Drive growth and profit recovery ➢ Recognized a goodwill impairment loss (non-cash) ➢ Delivered tangible benefits of fixed cost reduction via structural reforms in July
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Group Core 3 Next 5 Regained Momentum in Key Brands Q3 +4% 2025 Net Sales YoY (LfL)* * Like-for-like increase (decrease) in net sales excludes the impacts of foreign exchange translation and all business transfers i n 2025 and 2024 as well as the services provided during the transition period, and the impact of sales prior to the acquisition of Dr. Dennis Gross Skincare in 2024 and its corresponding period in 2025 (“business transfers and acquisitions”) YoY change (%) for Core 3 and Next 5 brands is calculated based on foreign exchange rate assumptions at the beginning of each fiscal year which excludes impacts from FX fluctuations and other Q2 −3% Q3 +7% Q2 +2% Q1 −3% Q1 −20% Q2 −4% Q3 +10% Q1 −9% 4
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Progress on Action Plan 2025-2026 5 Steadily building the foundation for sustainable growth ⚫ Global HQ: Revamp the organization for stronger strategic execution ➢ Early retirement program "Next Career Support Plan": approx. 200 employees (est.), plan to recognize structural reform expenses of approx. ¥3.0 bn in non-recurring items in Q4 ➢ Optimize organizational structure / employee productivity, investing in human capital ⚫ Reorganize subsidiaries: Drive group-wide efficiency unlocking synergies ➢ Shiseido Interactive Beauty Company, Limited: JV ends in 2025; absorption into Global HQ planned in 2026 ➢ SHISEIDO CREATIVE Co., Ltd.: operation transfer and absorption into Global HQ planned in 2026 ➢ Japan Retail Innovation Co., Ltd: JV ends in 2025; dissolution and liquidation planned in 2026 ⚫ Enhance and centralize innovation creation and communication functions ➢ Global R&D reorganization: Closure of Shiseido Asia Pacific Innovation Center and Korea Innovation Center ➢ Partial relocation of Art & Heritage functions from Kakegawa to Yokohama and Ginza* Public exhibition functions at Corporate Museum and Art House in Kakegawa to be discontinued * Yokohama Global Innovation Center, Shiseido Gallery
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Americas Business: Entering New Phase of Growth Alberto Noe to officially assume CEO, transitioning from interim leadership ⚫ Drunk Elephant turnaround ⚫ Growth acceleration plan via innovation, expand distribution ➢ NARS : Iconic product launches underway for 2026 ➢ Drive fragrance portfolio growth, with Max Mara as an additive boost ➢ Dr. Dennis Gross Skincare : Strengthen partnership with key retailers ➢ SHISEIDO : Leverage EMEA Success to Drive Americas Growth ⚫ Driving synergies with EMEA to improve profitability ➢ Consolidate media buying & agencies, streamline asset creation ➢ Centralize indirect procurement ➢ Optimize fragrance & R&D organizations 6
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Drunk Elephant Turnaround Advancing Inventory and Cost Optimization for Profit Recovery Rebuild brand presence in key retail channels 7 Launch disruptive & irreverent campaign balanced with clinical results, targeting elevated consumer (Jan ‘26) Regain market leadership by unrivalled hero products Drive engagement through brand ambassadors, partnerships & creator community to generate advocacy C L A R I F Y B R A N D D I F F E R E N C E R E G A I N S K I N C A R E L E A D E R S H I P R E T A IL E R P A R T NE R S H I P R E I G N I T E B R A N D L O V E
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2025 Outlook 8 Net Profit Target Cut on ¥46.8 bn Americas Goodwill Impairment; Core Operating Profit and Dividend Unchanged; FCF Ahead of Expectation (Billion yen) 2024 2025 Previous Forecast (Feb. 2025) 2025 Revised Forecast % of Net Sales YoY Change YoY Change % YoY FX-Neutral % YoY LfL*1 % Change vs. Previous Net Sales 990.6 995.0 965.0 100% −25.6 −3% −2% −1% −30.0 Core Operating Profit 36.4 36.5 36.5 3.8% +0.1 +0% - Non-recurring Items −28.8 −23.0 −78.5 −8.1% −49.7 - −55.5 Operating Profit 7.6 13.5 −42.0 −4.4% −49.6 - −55.5 Profit before Tax −1.3 14.5 −42.0 −4.4% −40.7 - −56.5 Profit Attributable to Owners of Parent −10.8 6.0 −52.0 −5.4% −41.2 - −58.0 EBITDA*2 89.6 90.5 90.0 9.3% +0.4 +0% −0.5 Free Cash Flow −35.3 15.0 35.0 3.6% +70.3 - +20.0 Dividend (yen/per share) 40 40 40 (Forecast) Interim: 20 Year-end: 20 Interim: 20 Year-end: 20 Interim: 20 Year-end: 20 *1 Excluding impacts from FX, business transfer and acquisition *2 Core Operating Profit + Depreciation and Amortization (excl. depreciation of right-of-use assets) 2025 Full-year FX Assumptions (Revised) USD/JPY: 148 yen (−2.3% YoY), EUR/JPY: 168 yen (+2.6% YoY), CNY/JPY: 20.5 yen (−2.4% YoY) (Previous) USD/JPY: 145 yen EUR/JPY: 155 yen CNY/JPY: 20.0 yen
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9 *1 Excluding impacts from FX, business transfer and acquisition *2 Core Operating Profit + Depreciation and Amortization (excl. depreciation of right-of-use assets) Net Sales: Core OP : Free Cash Flow : Q3 2025 Executive Summary YoY LfL％*1 −3% Q3 YTD 2025 −¥63.4 bnNon-recurring Items : YoY change +¥2.7 bn Improvement of working capital and review of capital investments; acquisition-related costs recognized in 2024 Decreased YoY due primarily to sales declines in China & Travel Retail and Drunk Elephant Increased thanks to structural reform benefits and accelerated global-wide cost management Recognized a goodwill impairment loss of −¥46.8 bn in Americas, structural reform expenses One-off costs for early retirement program at Global HQ to be recognized in Q4 (Billion yen) Q3 YTD 2024 % of Net Sales Q3 YTD 2025 % of Net Sales YoY Change YoY Change % YoY FX-Neutral % YoY LfL %*1 Net Sales 722.8 100% 693.8 100% −28.9 −4% −3% −3% Core Operating Profit 27.4 3.8% 30.1 4.3% +2.7 +10% Non-recurring Items −25.2 −3.5% −63.4 −9.1% −38.2 - Operating Profit 2.2 0.3% −33.4 −4.8% −35.5 - Profit before Tax 7.2 1.0% −32.5 −4.7% −39.7 - Income Tax Expense 5.7 0.8% 11.5 1.7% +5.8 +102% Profit Attributable to Owners of Parent 0.8 0.1% −44.0 −6.3% −44.7 - EBITDA*2 67.3 9.3% 67.9 9.8% +0.6 +1% Free Cash Flow −28.7 −4.0% 31.6 4.6% +60.3 - YoY change +¥60.3 bn
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Decreased thanks to structural reform benefits and agile cost management, etc. 10 COGS： Marketing investments： Personnel expenses*： Other SG&A： * Including POS personnel expenses Decreased by structural reform benefits in Japan, China & TR and Americas, etc. Core Operating Profit: Steady Fixed Cost Reduction Thanks to Structural Reforms Better brand/product mix albeit Drunk Elephant’s production decline Continued investments in key brands via selection and concentration (Excluding Non-recurring Items) (Billion yen) Q3 YTD 2024 ％ of Net Sales Q3 YTD 2025 ％ of Net Sales YoY Change YoY % Pts Difference Net Sales 722.8 100% 693.8 100% ー28.9 ー4.0% - COGS 168.3 23.3% 160.9 23.2% ー7.4 ー4.4% ー0.1pts Gross Profit 554.4 76.7% 532.9 76.8% ー21.5 ー3.9% +0.1pts SG＆A 531.4 73.5% 506.6 73.0% ー24.8 ー4.7% ー0.5pts Marketing investments 199.4 27.6% 197.9 28.5% ー1.5 ー0.8% +0.9pts Brand development / R&D 27.5 3.8% 26.1 3.8% ー1.5 ー5.4% ー0.1pts Personnel expenses* 174.4 24.1% 161.3 23.2% ー13.2 ー7.6% ー0.9pts Other SG&A 130.0 18.0% 121.3 17.5% ー8.7 ー6.7% ー0.5pts Other Operating Income / Expenses 4.4 0.6% 3.7 0.5% ー0.7 ー15.1% ー0.1pts Core Operating Profit 27.4 3.8% 30.1 4.3% +2.7 +9.7% +0.5pts
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Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q3 YTD Japan +20% +7% +5% +7% +10% −2% +2% +2% +0% China & Travel Retail*2 −14% −11% −23% +2% −11% −14% −7% +8% −6% Asia Pacific +5% +7% +2% −3% +2% −1% −0% −2% −1% Americas +9% −20% −9% −7% −7% −19% +4% −9% −9% EMEA +17% +6% −7% +16% +8% −9% +2% +22% +4% Total +3% −4% −8% +4% −1% −9% −3% +4% −3% Net Sales by Reportable Segment: Returning to Growth Trajectory EMEA Strong Growth and China & Travel Retail Return to Growth 11 2025 (vs. 2024) 2024 (vs. 2023)Like-for-like*1 *1 Excluding the impacts of foreign exchange translation, business transfers and acquisitions *2 To adopt an integrated approach to Chinese consumers and to maximize value creation, the Company implemented changes to its organizational structure as of March 31, 2025, along with change to its reportable segment which have been reflected in 2025
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Net Sales by Brand 12*1 Excluding the impact of business transfers *2 SHISEIDO, Clé de Peau Beauté, NARS, ELIXIR, ANESSA, d program, MAQuillAGE Japan: Innovation Across Key Brands Powers Growth Q3 Market • Local: modest growth continued • Inbound: moderate growth on the back of rising number of foreign visitors to Japan, albeit a sharp decline in department store channels Q3 Consumer Purchases • +Low single%; local core brands*2 drove growth, share expansion to continue - Local: +mid single% EC: +mid 20% New products from ELIXIR, Clé de Peau Beauté performed strongly - Inbound: −low single% Pullback before and after China’s promotion events, domestic-overseas price gap shrinks Q3 YTD Net Sales & Core Operating Profit • Strong profit growth from structural reform and higher productivity ELIXIR Clé de Peau Beauté Key Brand Net Sales Composition ■ Q3 YTD 2024 ■ Q3 YTD 2025 (Billion yen) Q3 YTD 2024 Q3 YTD 2025 YoY Change YoY % Net Sales 218.8 219.1 +0.3 +0.3%*1 Core OP 16.2 27.9 +11.7 +72.0% Core OPM 7.4% 12.7% - +5.3pts +low teen% +low single% +low teen% +low teen% −high single% flat +mid single% SHISEIDO Clé de Peau Beauté NARS ELIXIR ANESSA d program MAQuillAGE
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−high single% +mid single% +mid single% −mid teen% SHISEIDO Clé de Peau Beauté NARS ANESSA 13 China & Travel Retail: Net Sales Turned Positive in Q3 driven by Clé de Peau Beauté and NARS ; Mainland China grew at Double Digit Profitability Improvement Driven by Lower Fixed Costs and Strict Cost Control * Excluding the impacts of foreign exchange translation and business transfers Net Sales by Brand*1 Q3 Market • China: prestige accelerated from Q2, a solid recovery trend EC market drove growth with signs of recovery in offline channels • Travel Retail: - Chinese tourist consumption remained stagnant - Market competition by promotional pricing intensified Q3 Consumer Purchases • China: +low single% - Offline: +low single％, EC: +low single% - Clé de Peau Beauté and NARS maintained strong growth momentum - SHISEIDO performed strongly in EC albeit YoY decline in offline - ELIXIR, IPSA returned to growth • Travel Retail: −high teen％ - Inventory discipline, traveler focus Q3 YTD Net Sales & Core Operating Profit • Strong profitability secured via fixed cost reduction and cost discipline amid sales decline and adverse mix from Travel Retail contraction Key Brand Net Sales Composition ■ Q3 YTD 2024 ■ Q3 YTD 2025 (Billion yen) Q3 YTD 2024 Q3 YTD 2025 YoY Change YoY % Net Sales 259.7 240.0 −19.6 −5.7%* Core OP 49.6 46.7 −2.9 −5.9% Core OPM 18.9% 19.3% - +0.4pts
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+high single% +high teen% −high single% −over 40% +low single% SHISEIDO Clé de Peau Beauté NARS Drunk Elephant Dr. Dennis Gross Skincare Americas: Structural Reform Benefits Steadily Materializing; Strong Growth in SHISEIDO and Clé de Peau Beauté 14*1 Excluding the impacts of foreign exchange translation, business transfers and acquisitions *2 Prestige market *3 Data coverage: U.S. and Canada Net Sales by Brand*1 Q3 Market*2 • Maintained YoY growth, but fell short of expectations Q3 Consumer Purchases*3 • −low single％; returned to growth excl. Drunk Elephant - Drunk Elephant continued to struggle, steady inventory clean-up - SHISEIDO; strong performance from new products - Clé de Peau Beauté demonstrated strength in base makeup Q3 YTD Net Sales & Core Operating Profit • Restructuring benefits: reduced personnel cost and other SG&A • Stronger cost discipline partially offset the negative impact from lower sales, tariff and higher COGS due to lower Drunk Elephant production Key Brand Net Sales Composition ■ Q3 YTD 2024 ■ Q3 YTD 2025 SHISEIDO Clé de Peau Beauté (Billion yen) Q3 YTD 2024 Q3 YTD 2025 YoY Change YoY % Net Sales 87.2 78.2 −9.0 −9.1%*1 Core OP −3.6 −7.6 −4.0 - Core OPM −3.9% −9.3% - −5.4pts
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+low single% +high 20% +low teen% −over 60% +low teen% +high single% +over 40% SHISEIDO Clé de Peau Beauté NARS Drunk Elephant narciso rodriguez ISSEY MIYAKE PARFUMS Zadig&Voltaire +low single% +low teen% +low single% −low single% SHISEIDO Clé de Peau Beauté NARS ANESSA Q3 Market*2 • Decelerated in some countries and regions: Taiwan, Southeast Asia Q3 Consumer Purchases*3 • +low single%, Clé de Peau Beauté and NARS benefitted from new products Q3 YTD Net Sales & Core Operating Profit • Profit decline driven primarily by the softness in Taiwan EMEAAsia Pacific Asia Pacific: Market Contraction Continued, but Drove Share Gains by Innovation EMEA: Fragrances Accelerated; Returned to Profitability with Strong Q3 *1 Excluding the impacts of foreign exchange translation and business transfers *2 Prestige market *3 Data coverage: 10 countries and regions in the Asia and Oceania regions including Taiwan, South Korea and Thailand *4 Data coverage: France, UK, Germany, Italy and Spain Net Sales by Brand*1Net Sales by Brand*1 15 Key Brand Net Sales Composition Key Brand Net Sales Composition Q3 Market*2 • Modest growth continued Q3 Consumer Purchases*4 • high single% in total, +mid teen% in Fragrances driven by Zadig & Voltaire Q3 YTD Net Sales & Core Operating Profit • Higher gross margin offset increased marketing spend, securing slight YoY profit growth ■ Q3 YTD 2024 ■ Q3 YTD 2025■ Q3 YTD 2024 ■ Q3 YTD 2025 (Billion yen) Q3 YTD 2024 Q3 YTD 2025 YoY Change YoY % Net Sales 53.2 52.5 −0.7 −0.9%*1 Core OP 2.5 1.8 −0.8 −30.6% Core OPM 4.7% 3.3% - −1.4pts (Billion yen) Q3 YTD 2024 Q3 YTD 2025 YoY Change YoY % Net Sales 91.6 96.1 +4.6 +4.2%*1 Core OP 0.8 0.9 +0.2 +20.6% Core OPM 0.8% 0.9% - +0.1pts
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Q3 YTD 2025: Realized ¥21.0 bn cost reduction benefits, on track with the plan; ¥25.0bn cost savings for 2026 secured with all key actions completed 2025 2026 Q3 YTD COGS • Selection and concentration of brands and SKUs, strategic price increases • Optimize factory production line efficiency, etc. 2.5 3.0 7.0 Marketing investments • Optimize promotional costs, increase marketing ROI • Expand local production and operational efficiency of samples 1.5 2.0 1.0 Personnel expenses • Optimize organization structure, improve productivity • Streamline corporate functions to enhance operational efficiency, etc. 13.0 15.0 8.0 Other SG&A • Reduce outsourcing cost • Reduce depreciation: system optimization and integration, selective new investments • Other cost savings: logistics optimization, efficient office management, etc. 4.0 5.0 9.0 Total 21.0 25.0+ 25.0+ (Billion yen) Progress on Global Cost Structure Transformation 2025 25.0+ Japan China Other than the above 2026 25.0+ Americas 16 Global HQ
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2030 Medium-Term Strategy November 10, 2025 Shiseido Company, Limited Kentaro Fujiwara President and CEO Ayako Hirofuji Chief Financial Officer
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2030 Medium-Term Strategy Maximizing Brand Value for a New Growth Trajectory 18 2030 Medium-Term StrategyWIN 2023 / SHIFT 2025 and Beyond Action Plan 2025-2026 Medium-to Long-Term Strategy Focus on Core 3/Next 5 Brand Growth Cost Structure Expand reforms in Americas/GHQ Accelerate growth in areas of strength and achieve high-quality growth Pursue continuous cost optimization Governance Enhance ROIC management and financial discipline, and evolve global operational framework Redesign compensation/ Appoint external chair Focus on skin beauty; divest or exit from non-core brands Structural reform in Japan and China Change governance structure Establish foundation for sustainable growth Maximize brand equity to unlock new growth; generate returns above capital cost Maximize Corporate Value Strategic Phase Expand investment; achieve high capital efficiency
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19 Now is the Time - Because the World is Changing More than Ever... Diversifying Beauty Needs World’s Aging Population Changes in Social Connections with Divisions and IsolationLack of Emotional Fulfillment Shifts in Information & Communication by Digitalization Environmental Degradation
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20 2030 VISION By connecting with people, we pursue, create, and share new beauty, enriching everyone’s lives BEAUTY INNOVATIONS FOR A BETTER WORLD
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Value-creation Capability ⚫ R&D Research targeting the whole skin, body, and mind, with a view of human life on a time horizon Elevate Brand Power ⚫ Production technology and quality assurance Ensure trust in the quality of our products with safety and security ⚫ Hospitality experience Create customer experience that provoke emotions, foster deep consumer engagement Value-communication Capability Our People People who believe in beauty and engage with everyone in order to share exceptional, enduring value with the world, even in challenging times Connecting Our People with Shiseido‘s Core Value, Maximize Strengths; Unlocking the Power of Our Brands ⚫ Creative Value proposition: new cultures and values that appeal to aesthetic sensitivities Synergy 22
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23 戦略の柱1： ブランド 成長加速 戦略の柱2： 全社ガバナンス と事業基盤の強 化 Talent and organizations to create beauty value Resilient management foundation building Harmonization with nature (Circular Manufacturing) Lifelong QOL improvement through diverse “power of beauty” Global-wide optimization across the value chain Enhanced talent development and corporate culture Address social issues through appropriate environmental actions Strategic use of digital technologies and AI Advancement of the matrix organization Pillar 1: Accelerate growth with brand power Pillar 2: Evolve global operations Pillar 3: Drive sustainable value creation Create social value through DE&I Materiality* Strategic Pillars Initiatives 2030 Medium-Term Strategy Overview Accelerate the Creation of Corporate and Social Value Built on Our Strengths * Materiality updated. For details, please refer to Supplemental Data 9 Grounded in our strengths: identify focus categories and build the portfolio 1) Maximize innovation by leveraging technological strengths 3) Create new markets through expansion into new categories and domains 2) Accelerate growth by expanding our global reach Enhance value communication: build deeper connections with consumers
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24 Net Sales (Billion yen) Core Operating Profit (Billion yen) * 2025-2030 average; excluding impacts from FX Core OPM 965 2030 Target 2025 Forecast 4%36.5 2026 7% ≥10% +3pts Cost optimization Profitability improvement via growth acceleration Achieve Double-Digit Core OP Margin via Cost Optimization; Aiming to Boost Profit Recovery by Growth Acceleration CAGR LfL +2~5%* Achieve above-market growth
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25 Strategic Pillar 1 Accelerate Growth with Brand Power Strategic Pillar 2 Evolve Global Operations Strategic Pillar 3 Drive Sustainable Value Creation
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26* Evaluated based on the median 2024-2030 CAGR of each category in Shiseido’s key regions. Circle size reflects estimated market scale Market Attractiveness* Competitive Advantage Skincare Suncare Attractive Markets x Domains with Shiseido’s Strengths New Category Development 65+ Beauty Checkup Business ・ ・ ・ Existing Categories Approach tailored to market characteristics Identify “Where to Win” by Leveraging Our Competitive Advantage Makeup Fragrance Medical & Derma Life Style Mass cosmetics, Beauty device, Haircare, Inner beauty
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Market Environment Strategies and winners Expect Growth potential Skincare ⚫ Increased polarization ⚫ Increasing needs for brands able to offer “intrinsic value" with a clear differentiator ⚫ Maximize company-wide effects by focusing on overwhelming innovation ⚫ Continuous creation of new categories in the anti-aging market Medium Suncare ⚫ Increased awareness of UV and skin wellness ⚫ Diversified options for use from outdoor leisure to daily UV care ⚫ Further strengthen technology superiority, expand market- share in both suncare and skincare/makeup SPF categories ⚫ Strengthen global market rollouts High Makeup ⚫ “Skinification” trend continue to accelerate, infusing skincare functionality and efficacy with base makeup ⚫ Rise of artistic/digital native brands along with maturing markets ⚫ Leverage our technological strengths with skincare, amplify and foster hero products for each brand to win market share ⚫ Strengthen value communication that embody brand philosophies Medium Fragrances ⚫ Increasing needs for aesthetic sense, sensible stimulus, and self-expressions ⚫ Emergence of niche brands with diverse characteristics, achieving growth ahead of conventional players ⚫ Maximize global opportunities by shifting our strategic focus from EMEA to other regions ⚫ Accelerate growth by enhancing our portfolio, with the addition of Max Mara from 2026 High Medical & Derma ⚫ Derma (dermatology) continues to permeate into society ⚫ Increasing needs for pre-and post-treatment for medical beauty care ⚫ Generate value from our cutting-edge technologies ⚫ Drive growth not only by derma brands; Dr. Dennis Gross Skincare, d program but also by stretching product lines and concepts of core brands High Lifestyle ⚫ Growing interest for self-experimental care model ⚫ Propose a more comprehensive lifestyle ⚫ Sharpen ideas as lifestyle brands, Expand space for retail layout High Define Category Strategies Aligned with Markets and Our Competitive Advantage 27
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Categories × Brands: Drive Growth by Establishing Strategic Brand Framework Core Emerging Turnaround EMEA/ Americas Japan/ China JapanJapan Americas Next Japan/China/ Asia Pacific RegionalGlobal 28 Skincare Makeup LifestyleSuncare Fragrances Medical & Derma
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SHISEIDO Clé de Peau Beauté NARS ANESSA ELIXIR Dr. Dennis Gross Skincare Others Clarify the Role of Brands: Ensure Strategic Alignment of Investment * 2025-2030 average; excluding impacts from FX 2025 Forecast 2030Core Next Emerging Fragrances Profitable growth Growth acceleration Up-front investments CAGR LfL +2~5%* ¥965 bn 29
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Clear Growth Strategy in Place; Consistent Execution to Deliver Results 2025 Forecast 2030 1) Technology/Innovation (Develop new products/ hero products) 2) Expand global rollout 3) Expand into new categories/ new areas of business Brand & SKU Optimization CAGR LfL +2~5%* ¥965 bn * 2025-2030 average; excluding impacts from FX 30
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1) Maximize Innovation by Leveraging Technological Strengths Sharpen brand value, Build and foster customer loyalty Clé de Peau Beauté “Skin Intelligence" SHISEIDO “Immunity inspired slow aging" ELIXIR "Collagen Science" NARS “Skinification" Ensure seamless adoption of latest science and technology across brands, company-wide commitment to create and foster new markets, shifting towards a sustainable growth model A string of new product launches featuring ≥10 leading-edge technologies underway by 2028 Anti-Gravity Science V Mineral i-Seal Technology; Enhanced UV protection function Retinol TripleLock Technology Spots Lifecycle Science Serum First Technology; Convergence: skincare x makeup New technology launches awaiting from 2026 onwards Additional areas for enhancement ・・ Wrinkles Sagging Dark Spots Suncare Makeup Brand Core Company-Wide 31 IFSCC Award 4 times
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2) Accelerate Growth by Expanding Our Global Reach Tap into growth opportunities in the Americas and Asia-Pacific, amplify brand positioning beyond EMEA Offer unparalleled brand experience to affluent consumers around the world through prestige beauty brands Leverage our competitive strengths withadvanced technology and formulation technology Capture growth opportunities in Western markets Fragrances Skincare Suncare 32
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Next-generation micro needles Precise Delivery Technology (Patent technology: presented at the IFSCC Congress 2024) SHISEIDO Bio-Performance Micro-Click Concentrate Medical & Derma Pursue collaboration with medical beauty market, growing into a business with >¥100 bn in sales in the future 3-1) Expand into New Categories: Medical & Derma, Lifestyle Lifestyle Push the boundaries of innovation in skincare Dr. Dennis Gross SpectraLite FaceWare Pro BAUM, IPSA Utilize LED face mask featuring 100 lights Effectively improve acne and wrinkles with clinical results at home Revamp into brands that fulfil skin, body, and mind, elevate consumer experience beyond the power of cosmetics 33
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With over 40 years of sensory research and joint research with academic institutions, Shiseido received CES Innovation Awards® for developing algorithm that measures the impact of walking posture on skin and mental well-being which elucidated the relationship between Skin, Body and Mind, successfully quantifying the five senses Identify characteristics the skin that consumers are not aware of, to prevent skin troubles Beauty Checkup Deliver a personalized solution that connects skin, body, and mind Life Stage Partnerships Creating a market tailored to the skin needs of 65+ 3-2) Expand into New Domains: Life Stage Partnerships, Beauty Checkup Based on millions of skin data points collected through in-store skin measurements, Shiseido elucidated the relationship between aging and change in skin quality for the first time in the industry With a combination of Kansei engineering, Shiseido will “deliver “new value to experience benefits for the skin” for all age groups 34
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Creation of raw materials for de-fossil resources in algae by forming strategic partnership with biotech company CHITOSE Group Advancing the development of water- independent next-generation skincare in collaboration with JAXA Turning researchers’ inspirations into products through co-creation with consumers, guided by the concept of “Anti, Beyond, and Ultimate”. R&D-driven 3-3) Exploring New Business and Value Creation Models under the Direct Leadership of CEO Co-creation with Consumers Starting from youth trends, co-develop products with partners to win Gen Z non-users External Collaboration Consumer-driven 35
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36 Become a true partner who meets individual needs ENGAGE Drive value co-creation to discover and connect deeply with consumers INSPIRE Communicate brand stories and enhance creative capabilities EXCELLENCE Evolve experiences across physical and digital touchpoints to deepen consumer intimacy CONNECT Translate unique insights from our innovative technologies into personalized value delivery • Innovate brand narratives and deliver a consistent world view across all touchpoints • Reintegrate the creative team at the core to enhance corporate- led creativity and heritage communication • Foster empathy through social activities in core brands • Strengthen value co-creation with consumers and retail partners • Enhance experiences across all touchpoints, including PBP/BC, offline channels, and social platforms • Build deeper connection and trust through mutual communication • Strengthen loyalty initiatives through integrated customer data • Enhance beauty checkup technology and experience to build unique competitive advantage • Leverage data and AI to their fullest potential Enhance Value Communication: Build Deeper Connections with Consumers to Maximize Returns Consumer visual or illustration
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Invest • Focus on investing in existing key brands • Identify opportunities with potential M&A in scenario: take proactive approach in areas to that need complementary strengths • Drive sustainable growth underpinned by strategic and disciplined investment Divest • Determine where to reduce or withdraw for each brand via Divestment Committee • Conduct ongoing reviews on business value from ROIC and asset-management perspectives • Optimize non-focus brands Ensure overall efficiency Brand Portfolio Optimize the Portfolio with Strategy and Discipline 37
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38 Strategic Pillar 1 Accelerate Growth with Brand Power Strategic Pillar 2 Evolve Global Operations Strategic Pillar 3 Drive Sustainable Value Creation
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39 Value Chain: Pursue Operational Excellence Driving Global Optimization Consumers Global Optimization • Reduce sample production costs • Centrally purchase media production • Improve efficiency by streamlining portfolio • Optimize number of brands and SKUs • Standardize media utilization across global markets • Leverage customer data for CRM strategy • Integrate inventory management and optimize freight costs Lead Time Reduction • Reduce production lead time by optimizing product and packaging development • Optimize production and logistics • Shorten supply planning cycle • Streamline and optimize sales and demand planning processes Marketing & Product Development Procurement & Production Global Marketing Communication R&D Region & Local Sales Drive Impact with Cross-Functional Collaboration across Borders
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40 Optimized IT Investments Strengthen AI investment for operational excellence FOCUS implementation & back-office digitalization Advancement of management capability Investment optimization & cost reduction Enhance value development capabilities Achieve operational excellence through back- office automation and advancement Enhance consumer experience and loyalty with AI • R&D: AI-powered formulation • Strengthen regulatory response capabilities • Improve supply network planning accuracy with AI • Shorten production cycles and planning lead times • Optimize inventory and develop replenishment plans • Deliver personalized experiences using customer data • Optimize media mix Digital and AI Strategy Accelerate AI utilization to transform customer experience and automate back-office operations Stabilize the FOCUS system and leverage standardized global data to drive agile management
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41 Evolution of the Matrix Organization Empower Functions and Drive Global Optimization For Agility Current Issues Measures ⚫ Local optimization ⚫ Unclear roles between global and regional HQs ⚫ Global optimization ➢ Establish functional reporting structure across global and regional HQs; enhance clarity of HR decision authority ⚫ Clarification of roles ➢ Global HQ: Develop company-wide strategies to maximize corporate value and support regional execution ➢ Regional HQ: Lead execution tailored to each market based on global strategies Change in Reporting Line <Before> <After> *1 Chief Supply Network Officer *2 Chief Marketing & Innovation Officer *3 Brand Holders *4 Chief Brand Officer Existing Newly AddedCEO CFO CSNO*1 CEO Finance Supply Network CEO CFO CEO・・・ ・・・ ・・・ ・・・BH*3 Brand CM&IO*2 Finance Supply Network Brand CSNO*1 BH*3 CBO*4
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42 Strategic Pillar 1 Accelerate Growth with Brand Power Strategic Pillar 2 Evolve Global Operations Strategic Pillar 3 Drive Sustainable Value Creation
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43 Talent Strategy: Building an Organization that Enables Employee Growth Increase opportunities to take on new challenges Embody Shiseido’s core values Foster a globally unified organization Create and institutionalize career challenge opportunities Strengthen employees’ leadership and portable skills to lead transformation Redefine and embed values across the organization Build an environment for technology succession to sustain value creation Enhance effectiveness through global-regional HQ via governance alignment Foster an inclusive culture to leverage diversity Triple investment in talent development* Strategic rotations and cross- functional project assignment rate Global leadership coverage rate Employee engagement score Empathy and understanding score for corporate values Inclusion score Women in domestic management positions: 50% by 2030 Key Performance Indicators * Investment in leadership development, including the promotion of global mobility; 2026-2030 total ÷ 5 years (annual average) = 3× 2025 level
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44 ➢ Shiseido Life Quality Makeup: Enhance QOL for individuals with serious skin concerns ➢ Shiseido DE&I Lab: Promote DE&I in Japan and contribute to economic growth ➢ ANESSA: Promote children’s holistic well-being through outdoor activities ➢ Clé de Peau Beauté: Support girls’ education ⚫ Reduce risks through human rights due diligence and corrective actions ⚫ Support gender equality for 1 million people Gender LGBTQ+Generations Disabilities Human Rights Embrace Diversity, Create A Society where All Shine ⚫ Support 1 million people to cultivate self-efficacy through our brand ➢ Identify and address human rights issues through biennial assessments ➢ Engage with global experts and incorporate the latest insights Sustainability Strategy ー Society: Create Social Value through DE&I 1. Gender Equality 2. Empowerment through Power of Beauty 3. Respect for Human Rights
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45 1. Reducing Our Environmental Footprint 2. Developing Sustainable Products 3. Promoting Sustainable and Responsible Procurement ⚫ Climate change ➢ CO2 emissions reduced by 46.2% (SBTi, Scope 1・Scope 2)*1 ➢ CO2 emissions reduced by 55% (SBTi, Scope 3)*2 ⚫ Water usage ➢ 50% reduction in water consumption*3 ⚫ Eco-friendly materials ➢ 90% circular raw materials ⚫ Sustainable packaging ➢ 15% PCR*4 / biomaterials ➢ 20% reduction in virgin plastic ⚫ Procurement of raw materials in consideration of environmental and social issues ➢ 100% responsible procurement*5 ⚫ Supplier collaboration and management ➢ Zero critical-risk suppliers *1 At all our sites (compared to 2019) *2 Throughout our value chain, excluding Shiseido sites, economic intensity target (compared to 2019) *3 Economic intensity across all our sites (compared to 2014) *4 PCR: Post-Consumer Recycled *5 key raw materials Sustainability Strategy ー Environment: Tackle Environmental Issues Transformation toward Circular Manufacturing
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46 Financial Strategy
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47 Financial Goals: Achieve Above-Market Growth through Proactive Investment in Focus Areas and Ensure Returns Exceed Cost of Capital Profitability Target Capital Efficiency Targets Cash Generation Target Core OPM ≥10% ROIC ≥10% Free cash flow ≥¥100 bn*3 7% ≥10% WACC*2 3.7% CAPEX as % of Sales *1 2025-2030 average; excluding impacts from FX *2 WACC and cost of equity based on internal assumptions *3 Excludes cash outflows from M&A and cash inflows from asset sales *4 Includes the acquisition of Dr. Dennis Gross Skincare 5.1% 4.5% approx. 4% approx. 3% 2024 Actual 2025 Forecast 2026 2030 ¥50 bn ≥¥100 bn*3 2026 2030 ≥10% 5% 2024 Actual 2025 Forecast 2026 2030 ROE ≥12% Lowering WACC ✓ Enhance disclosure ✓ Strengthen sustainability management ✓ Pursue optimal capital structure ✓ Stabilize share price by expanding individual shareholder base −35.3 bn*4 2024 Actual 2025 Forecast 2026 2030 ≥12% 7% Cost of Equity*2 CAGR LfL +2~5%*1 0.6% 2024 Actual 2025 Forecast −1.7%
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48 Boost Sales Growth via Targeted Investments and Drive Cost Efficiency Change in % of Sales Investment Strategies Cost Optimization COGS ⚫ Automation of production lines ⚫ Sustainability promotion ⚫ Optimization of production and logistics ⚫ Streamline of brand and SKU mix ⚫ Improvement of product, packaging, and raw material development and procurement processes ⚫ Improvement of sales and demand planning processes Marketing Investments ⚫ Core brands: Maintain stable growth and maximize returns ⚫ Next global brands (Suncare, Fragrance): Maximize business opportunities through strategic investment and geographic expansion) ⚫ Regional brands: Pursue high growth by expanding market share and improving profitability in each home market ⚫ New domains: Proactively invest in future expansion ⚫ Enhancement of customer experience and loyalty through AI ⚫ Efficiency improvement in sample production ⚫ Optimization of indirect procurement ⚫ Enhanced portfolio management ⚫ Asset sharing across brands and regions Brand Development /R&D ⚫ Continued investment at approx. 3% of net sales ⚫ Boost productivity in formulation development with AI ⚫ Efficiency improvement by leveraging our robust technologies and sharpening brand value Personnel Expenses ⚫ Development of global leaders ⚫ Strategic talent assignment to capture growth opportunities ⚫ Capability enhancement to create Shiseido's unique value ⚫ Streamline corporate functions to enhance operational efficiency, etc. ⚫ Rigorous personnel control Other SG&A ⚫ Investment in digital and AI technologies ⚫ Optimization of indirect procurement and reduction of outsourcing costs ⚫ Reduction of freight costs through integrated inventory management
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Drive Above-Market Growth and Profitability across All Regions; Strike a Balance in Regional Profitability 49 Key Themes by Region ✓ Solidify No.1 market share position ✓ From Japan to the world: creating and sharing new value ✓ Strengthen financial discipline for underperforming brands ✓ Increase EC sales ratio and improve labor productivity ✓ Drive growth recovery of SHISEIDO and increase share of key brands ✓ Challenge in new domains (e.g., Aesthetic Medicine) ✓ Marketing Efficiency: Partial in-house EC operations and Data Utilization ✓ Maximize growth and cost synergies through integrated management ✓ Focus efforts on key brands and countries ✓ Capture the middle-income segment with high growth potential ✓ Improve efficiency through shared resources across multiple markets ✓ Drive a turnaround with Drunk Elephant ✓ Maximize Fragrance business opportunities ✓ Reach diverse consumer segments strategically ✓ Improve profitability in the Fragrances, drive growth in the Middle East ✓ Maximize growth of existing brands through expanded channels ✓ Improve marketing ROI and labor productivity through DX and AI utilization 2025 Forecast 2030 Sales Breakdown* Profit Breakdown* Asia Pacific, Americas, EMEA 2025 Forecast 2030 Aim for double-digit margin ✓ Continuously pursue global HQ cost rationalization Profitability significantly above the group target Japan, China & Travel Retail * Breakdown based on the total of the five regional segments, excluding "Other / Adjustments," set at 100% China & Travel Retail Japan Asia Pacific Americas EMEA Other/ Adjustments
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Cash Allocation Strategy (Cumulative, 2026-2030) Establish Robust Cash Generation to Strengthen Shareholder Returns and Fuel Growth CAPEX approx. ¥200 bn Dividend approx. ¥130 bn 負債返済・ 株主配当後 CF M&A: Assess growth potential and synergies Exercise financial discipline Complete IT investments for ERP system implementation Strategicallycontrol Net Debt/ EBITDA with a target of 0.5x Sustain an A credit rating Debt Repayment Deploy funds in phases from the start of Medium-Term Strategy (MTS) Control expenditures with a focus on investment efficiency Pursue appropriate financial leverage Enhance long-term and sustainable shareholder returns Align cumulative dividends with earnings recovery Share buybacks: Make decisions with flexibility based on available cash reserves and share price/ valuation Cash inflows over the five years Improve profitability through focused investment in key areas Generate cash through asset-light operations Strong Cash Generation Capabilities 50 Operating cash flow + asset-light initiatives ¥500-600 bn Strengthen investment discipline under Investment and Divestment Committee ✓ Define execution processes and criteria for investment and exit decisions by category: e.g., brands, partnerships, IT, and CAPEX ✓ Apply stricter criteria for investment and exit decision ✓ Identify and enhance underperforming businesses Make decisions based on conditions after building strong cash generation in the latter half of MTS
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51 Drive ROIC improvement across the Organization ➢ ROIC-based long-term incentive compensation for all executives and eligible employees (from 2025) ➢ Operational KPIs linked to ROIC improvement into the individual performance evaluation for annual bonuses of all executives (from 2026) ROIC Improvement Operating Profit Margin Improvement Capital Turnover Improvement Net Sales ⚫ Accelerated growth building on brand through focused investment in key brands COGS ⚫ Value-based pricing strategy ⚫ Accelerating selection and concentration ⚫ Strengthen global procurement, reduce raw material costs ⚫ Production optimization SG&A ⚫ Cost reduction and productivity improvement ⚫ IT system consolidation and optimization Current Assets ⚫ Improvement of demand forecasting and inventory management ⚫ Inventory turnover improvement Fixed Assets ⚫ Reviews on owned assets ⚫ Accelerated return on existing investments Global Tax Management
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52 Toward Sustainable Corporate Value Enhancement
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Appendix
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Top: Net Sales Bottom: Core OP (Billion yen) Q3 2024 % of Net Sales/ Core OPM % Q3 2025 % of Net Sales/ Core OPM % YoY Change YoY Change % YoY FX-Neutral % YoY LfL % Japan 72.0 33.6% 73.2 32.7% +1.2 +1.7% +1.7% +1.8% 9.9 13.7% 8.4 11.5% −1.5 −14.9% - - China & Travel Retail 61.1 28.5% 66.1 29.5% +5.0 +8.1% +8.5% +8.5% 3.6 5.8% 7.9 11.8% +4.3 +118.8% - - Asia Pacific 18.8 8.8% 18.8 8.4% +0.0 +0.2% −2.1% −1.6% 1.7 8.9% 1.9 9.8% +0.2 +10.9% - - Americas 29.9 14.0% 26.7 11.9% −3.2 −10.8% −9.6% −9.4% −1.1 −3.5% −1.8 −6.4% −0.6 - - - EMEA 28.8 13.4% 36.6 16.3% +7.9 +27.4% +21.8% +21.8% −1.3 −4.5% 3.5 9.2% +4.8 - - - Other 3.5 1.7% 2.5 1.1% −1.1 −30.1% −29.6% −37.1% −0.1 −1.3% −0.5 −18.6% −0.5 - - - Adjustments - - - - - - - - −4.6 - −12.7 - −8.1 - - - Total 214.2 100% 224.0 100% +9.8 +4.6% +3.9% +4.1% 8.1 3.8% 6.7 3.0% −1.4 −17.6% - - *2 *3*2 55 Supplemental Data 1: Q3 Net Sales and Core Operating Profit by Reportable Segment*1 *1 In 2025, we have implemented changes to segment reporting in order to have better grasp on profitability of each segment. For details, please refer to news release published on March 28, 2025. The business results related to the operation of domestic sales by IPSA Co., Ltd. and the operation of sales of health & beauty foods, etc. by healthcare business previously included in the “Other” are now included in the “Japan Business.” 2024 results have been restated to reflect the changes *2 Calculated based on total sales including intersegment sales and internal transfers between segments *3 Excluding the impacts of foreign exchange translation, business transfers and acquisitions
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Top: Net Sales Bottom: Core OP (Billion yen) Q3 YTD 2024 % of Net Sales/ Core OPM % Q3 YTD 2025 % of Net Sales/ Core OPM % YoY Change YoY Change % YoY FX-Neutral % YoY LfL % Japan 218.8 30.3% 219.1 31.6% +0.3 +0.1% +0.1% +0.3% 16.2 7.4% 27.9 12.7% +11.7 +72.0% - - China & Travel Retail 259.7 35.9% 240.0 34.6% −19.6 −7.6% −5.7% −5.7% 49.6 18.9% 46.7 19.3% −2.9 −5.9% - - Asia Pacific 53.2 7.4% 52.5 7.6% −0.7 −1.4% −1.4% −0.9% 2.5 4.7% 1.8 3.3% −0.8 −30.6% - - Americas 87.2 12.0% 78.2 11.3% −9.0 −10.3% −8.1% −9.1% −3.6 −3.9% −7.6 −9.3% −4.0 - - - EMEA 91.6 12.7% 96.1 13.9% +4.6 +5.0% +4.2% +4.2% 0.8 0.8% 0.9 0.9% +0.2 +20.6% - - Other 12.3 1.7% 7.9 1.1% −4.4 −36.0% −35.6% −29.2% 0.1 0.8% −1.4 −15.0% −1.5 - - - Adjustments - - - - - - - - −38.2 - −38.2 - −0.0 - - - Total 722.8 100% 693.8 100% −28.9 −4.0% −3.2% −2.9% 27.4 3.8% 30.1 4.3% +2.7 +9.7% - - *2 *3*2 56 *1 In 2025, we have implemented changes to segment reporting in order to have better grasp on profitability of each segment. For details, please refer to news release published on March 28, 2025. The business results related to the operation of domestic sales by IPSA Co., Ltd. and the operation of sales of health & beauty foods, etc. by healthcare business previously included in the “Other” are now included in the “Japan Business.” 2024 results have been restated to reflect the changes *2 Calculated based on total sales including intersegment sales and internal transfers between segments *3 Excluding the impacts of foreign exchange translation, business transfers and acquisitions Supplemental Data 2: 2025 Q3 YTD Net Sales and Core Operating Profit by Reportable Segment*1
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YoY % 3Q +6% 3Q YTD −1% % of Net Sales 23% 57 Core 3 Next 5 * YoY change (%) for each brand is calculated based on foreign exchange rate assumptions as at the beginning of 2025 which ex cludes the impacts of foreign exchange translation, etc. * % of net sales is cumulative basis for Q3 2025 YoY % 3Q +12% 3Q YTD + 5% % of Net Sales 19% YoY % 3Q +2% 3Q YTD +2% % of Net Sales 12% Supplemental Data 3: Net Sales by Brand YoY % 3Q −19% 3Q YTD −49% % of Net Sales 2% YoY % 3Q +17% 3Q YTD +14% % of Net Sales 7% YoY % 3Q +6% 3Q YTD −11% % of Net Sales 6% YoY % 3Q +13% 3Q YTD +4% % of Net Sales 4% YoY % 3Q +16% 3Q YTD −1% % of Net Sales 2%
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58 YoY Change %* * YoY changes (%) are only provided for key brands in each region and are calculated based on foreign exchange rate assumptions as at the beginning of 2025 which excludes the impacts of foreign exchange translation, etc. Japan China & Travel Retail Asia Pacific Americas EMEA SHISEIDO +low 20% +low single% −mid single% +high single% +low teen% Clé de Peau Beauté +low single% +high teen% +high single% +high teen% +over 50% NARS −high single% +low single% +mid single% −high teen% +over 30% Drunk Elephant −low 20% +high single% ELIXIR +mid teen% ANESSA +high teen% +high single% −low 20% narciso rodriguez +low 20% ISSEY MIYAKE PARFUMS +low teen% d program −high teen% MAQuillAGE −high single% Dr. Dennis Gross Skincare −low single% Zadig&Voltaire +over 70% Supplemental Data 4: Q3 Brand Sales by Region
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(Billion yen) 2024 2025 1H Q3 Q3 YTD 1H Q3 Q3 YTD Core Operating Profit 19.3 8.1 27.4 23.4 6.7 30.1 Structural Reform Expenses −20.4 −2.9 −23.3 −4.8 −5.9 −10.8 Impairment losses/reversals −0.1 0.3 0.2 −0.0 −51.2 −51.2 Gain on Sale of Non-current Assets 0.7 −0.0 0.7 - - - Acquisition-related Costs −0.3 0.0 −0.3 −0.0 0.0 −0.0 One-time Costs Related to Internal System Changes −1.0 −0.2 −1.3 −0.0 0.0 −0.0 Other −0.9 −0.4 −1.3 −0.4 −1.1 −1.5 Non-recurring Items −22.0 −3.2 −25.2 −5.3 −58.1 −63.4 Operating Profit −2.7 4.9 2.2 18.1 −51.4 −33.4 59 Supplemental Data 5: Non-recurring Items
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60 (¥bn) 2023-end 2024-end Q3 2025-end Americas Business (cash-generating unit*2) Goodwill (Americas) 29.4 58.4 8.8 Trademarks (Drunk Elephant) 42.5 47.1 Disclosed at year-end Trademarks (Dr. Dennis Gross Skincare) - 18.8 long-term loans receivable (seller note*1) 46.3 43.1 Goodwill (EMEA) 7.1 13.2 Goodwill (China & Travel Retail) 14.3 20.1 Goodwill (Consol.) 62.1 108.0 55.2 Trademarks (Consol.) 48.6 71.8 Disclosed at year-end *1 In August 2021, the Company decided to divest three of its prestige makeup brands including bareMinerals along with the assets related to their businesses to an affiliate of private equity firm Advent International. The total purchase price of the Divested Business was 700 million US dollars, of which 350 million US dollars was paid in cash and the remaining 350 million US dollars was differed to be paid in the form of a seller note (a type of debt financing wherein the seller lends the buyer a portion of the purchase price with a maturity term of 7 years issued by an affiliate which operates the Divested Business *2 Impairment test has been conducted with trademarks of Drunk Elephant and Dr. Dennis Gross Skincare being included in cash-generating unit of the Americas Business ⚫ Americas Business ➢ Goodwill impairment • Recognized an impairment loss of on goodwill of ¥46.8 bn in Q3 2025 due to the declined profitability in the Americas • Drunk Elephant : focus on optimizing inventory in 2025, aiming for a full-fledged recovery in 2026 through a turnaround plan ➢ Seller note*1 • The seller note includes a clause that would subordinate payment of the amount due to the Company under the seller note to a certain return of capital for the Buyer if the Divested Business does not meet certain metrics based on the financial results in fisc al 2025 • Given the likelihood of this subordination to occur at the end of fiscal 2025, in Q4 2024, the Company recognized of a provis ion of 12.8 billion yen as finance costs • However, even if this subordination does apply, there will be no additional provision to be recognized arising from this tran saction • Remain committed to maximize the recoverable amount on a seller note Supplemental Data 6: Overview of Assets Associated with Key M&A Transactions
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*1 Excluding the impacts of foreign exchange translation, business transfers and acquisitions *2 Countries and regions in Asia Pacific 61 Supplemental Data 7: 2025 Net Sales Forecasts by Segment Previous Forecast YoY LfL %*1 (February) Revised Forecast YoY LfL %*1 Market and Sales Assumptions Japan +high single% +low single% ⚫ Inbound sales to significantly fall short of expectation due to subdued spending China & Travel Retail −mid single% −mid single% ⚫ Weak consumption, market uncertainty and intensifying price competition to continue but sales are likely to beat our expectations Asia Pacific +low teen% +low single% ⚫ Lower-than-expected growth in markets*2 notably in Taiwan and South Korea ⚫ Drunk Elephant struggle to continue Americas +low teen% −mid single% ⚫ Market to grow at a slower than expected pace, driven primarily by the weakness in skincare and makeup categories ⚫ Drunk Elephant setback EMEA +high single% +mid single% ⚫ Slower-than-expected market growth across all categories ⚫ Drunk Elephant setback Global +4% −1%
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Supplemental Data 8: Capital Expenditures; Depreciation and Amortization (Billion yen) * Investments in capital expenditures; property, plant and equipment (excl. right-of-use assets) and intangible fixed assets (excl. goodwill, trademark rights, right-of-use assets) 2024 2025 Previous Forecast （as of Feb 2025) 2025 Revised Forecast Change Property, Plant and Equipment 23.4 28.0 23.0 −5.0 Intangible Assets, etc. 25.5 24.0 20.0 −4.0 Capital Expenditures* 48.9 52.0 43.0 −9.0 Property, Plant and Equipment 35.2 Intangible Assets, etc. 17.9 Depreciation and Amortization 53.2 54.0 51.0 −3.0 62
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Materiality Lifelong QOL improvement through diverse “power of beauty” • Consumers’ QOL • DE&I • Respect for human rights • Innovations • Product safety • Responsible marketing and advertising • DX Resilient management foundation building • Governance & accountability enhancement • Fair business transactions • Information security, cybersecurity & privacy • Stakeholder engagement Talent and organizations to create beauty value • Talent & organization for value creation • Occupational health and safety Harmonization with nature (Circular manufacturing) • Climate change • Circular products and manufacturing • Chemical safety and management • Biodiversity • Water usage • Responsible procurement 63 ◼ Re-identified 19 material issues in light of the changes in the current business environment, quantitative and qualitative feedback from and dialogue with stakeholders (updated from 2019 version) ◼ With the launch of 2030 Medium-term Strategy, the issues are organized into four categories aligned with its strategic pillars Materiality Identification Process Step1. Identify Social Issues • Comprehensively identify social issues based on international guidelines (GRI/SASB/SDGs, etc.) Step2. QN/QL survey and dialogue with multi-stakeholders • Quantitative survey and analysis on employee/consumer feedback • Interviews questionnaires for top management (EO/Regional EO) • Interview with shareholders/investors/experts (Incl. desk research on social demand and expectations based on ESG evaluation by S&P/MSCI/CDP, etc.) Step3. Prioritization • Evaluated with a focus on multi-stakeholder / business materiality Step4. Finalization (top management incl. corporate executive officers) • Categorize and conceptualize material issues identified • Reach agreement at global management meeting Step5. Board Approval Supplemental Data 9: Shiseido’s Materiality