Interim report
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August 5 , 2026 Accounting Standards Fa FASF MEMBERSHIP Consolidated Settlement of Accounts for the Six Months Ended June 30 , 2026 [ IFRS ] Shiseido Company , Limited Listings : URL : Contact : Representative : Tokyo Stock Exchange ( Code Number 4911 ) https://corp.shiseido.com/en/ Kentaro Fujiwara , Representative Corporate Executive Officer , President and CEO Yuki Oshima , Vice President , Investor Relations Department Tel . + 81-3-3572-5111 Filing date of semi - annual securities report : August 5 , 2026 ( plan ) Start of cash dividend payments : September 3 , 2026 ( plan ) Supplementary materials prepared : Yes Financial results information meeting held : Yes ( for institutional investors and analysts , etc. ) 1. Performance for the Six Months Ended June 30 , 2026 ( From January 1 , 2026 to June 30 , 2026 ) * Amounts less than one million yen have been rounded down . ( 1 ) Consolidated Operating Results ( Millions of yen ; percentage increase ( decrease ) figures denote year - on - year change ) Net Sales Core Operating Profit Operating Profit Profit Before Tax Profit Attributable to Owners of Parent Total Comprehensive Income % % % % % % Six Months Ended June 30 , 2026 498,965 [ 6.2 ] 44,432 [ 90.1 ] 41,925 [ 131.8 ] 44,200 [ 130.2 ] 29,697 [ 211.4 ] 43,329 [ - ] Six Months Ended June 30 , 2025 [ Reference ] Profit 469,831 [ ( 7.6 ) ] 23,372 [ 21.3 ] 18,084 [ - ] 19,202 [ 356.4 ] 9,535 [ - ] ( 15,744 ) [ - ] Six months ended June 30 , 2026 : Six months ended June 30 , 2025 : Basic Earnings per Share ( Yen ) Six Months Ended 74.32 June 30 , 2026 Six Months Ended 23.87 June 30 , 2025 ¥ 29,014 million [ 219.5 % ] ¥ 9,080 million [ - % ] Diluted Earnings per Share ( Yen ) 74.30 23.86 Note : Core operating profit is calculated as operating profit excluding profits or losses incurred by non - ordinary factors ( non - recurring items ) , such as costs and expenses related to structural reforms , impairment losses , acquisitions , etc. Year - on - year percentage changes are indicated as ( - ) if figures for either or both the current and previous interim periods are negative , or if the percentage change is 1,000 % or higher .
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(2) Consolidated Financial Position (Millions of yen) Total Assets Total Equity Equity Attributable to Owners of Parent Ratio of Equity Attributable to Owners of Parent As of June 30, 2026 1,273,863 653,951 636,618 50.0% As of December 31, 2025 1,267,256 621,270 600,756 47.4% 2. Cash Dividends Cash Dividends per Share (Yen) Q1 Q2 Q3 Year-End Full Year Fiscal Year 2025 － 20.00 － 20.00 40.00 Fiscal Year 2026 － 30.00 － Fiscal Year 2026 (Forecast) － 30.00 60.00 Note: Revision to the most recently disclosed dividend forecast: None 3. Forecast for the Fiscal Year Ending December 31, 2026 (From January 1, 2026 to December 31, 2026) (Millions of yen; percentage figures denote year-on-year change) Net Sales Core Operating Profit Operating Profit Profit Before Tax Profit Attributable to Owners of Parent Basic Earnings per Share (Yen) % % % % % Fiscal Year 2026 990,000 [2.1] 69,000 [55.0] 59,000 [－] 60,000 [－] 42,000 [－] 105.12 Note: Revision to the most recently disclosed performance forecast: None
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Notes (1) Significant changes in the scope of consolidation during the period: None (2) Changes in accounting policies; changes in accounting estimates 1) Changes in accounting policies required by IFRS: None 2) Other changes in accounting policies: None 3) Changes in accounting estimates: None (3) Number of shares issued (ordinary shares) 1) Number of shares issued (including treasury shares) As of June 30, 2026: 400,000,000 As of December 31, 2025: 400,000,000 2) Number of treasury shares As of June 30, 2026: 375,638 As of December 31, 2025: 463,674 3) Average number of shares outstanding during the period Six months ended June 30, 2026: 399,561,710 Six months ended June 30, 2025: 399,443,535 This semi-annual financial report is not subject to review procedures by a certified public accountant or audit firm. Appropriate use of business forecasts; other special items (Cautionary note concerning forward-looking statements) In this report, statements other than historical facts are forward -looking statements that reflect the Company’s plans and expectations. These forward-looking statements involve risks, uncertainties and other factors that may cause our actual results and achievements to differ from those anticipated in these statements. Please refer to “1. Summary of Consolidated Financial Resul ts for the Six Months Ended June 30, 2026 (3) Consolidated Forecast and Other Forward-Looking Information” on pa ge 5 for information on preconditions underlying the above outlook and other related information.
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1 Contents 1. Summary of Consolidated Financial Results for the Six Months Ended June 30, 2026 ............ 2 (1) Consolidated Performance ................................................................................................................... 2 (2) Financial Position ................................................................................................................................ 4 (3) Consolidated Forecast and Other Forward-Looking Information ..................................................... 5 2. Interim Condensed Consolidated Financial Statements and Notes ............................................... 6 (1) Interim Condensed Consolidated Statement of Financial Position ................................................. 6 (2) Interim Condensed Consolidated Statement of Profit or Loss and Interim Condensed Consolidated Statement of Comprehensive Income ........................................ 8 (3) Interim Condensed Consolidated Statement of Changes in Equity .................................................. 10 (4) Interim Condensed Consolidated Statement of Cash Flows ........................................................... 12 (5) Notes Concerning Interim Condensed Consolidated Financial Statements .................................... 13 (Note on Assumptions of a Going Concern) ........................................................................................ 13 (Change in Presentation)................................... ............................................................................................ 13 (Segment Information, etc.) ................................................................................................................ 13
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2 1. Summary of Consolidated Financial Results for the Six Months Ended June 30, 2026 (1) Consolidated Performance (Millions of yen) Net Sales Core Operating Profit Operating Profit Profit before Tax Profit Attributable to Owners of Parent EBITDA Six Months Ended June 30, 2026 498,965 44,432 41,925 44,200 29,697 70,017 Six Months Ended June 30, 2025 469,831 23,372 18,084 19,202 9,535 48,540 Year-on-Year Increase (Decrease) 6.2% 90.1% 131.8% 130.2% 211.4% 44.2% FX-Neutral (0.6)% Like-for-Like (0.2)% Notes: 1. Core operating profit is calculated as operating profit excluding profits or losses incurred by non -ordinary factors (non-recurring items), such as costs of structural reforms, impairment losses, acquisition-related costs, etc. 2. EBITDA is calculated by adding depreciation and amortization expenses (excluding depreciation of right -of-use assets) to core operating profit. 3. Like-for-like increase (decrease) in net sales excludes the impacts of foreign exchange translation and all business transfers in the first six months of fiscal year 2026 and 2025, as well as the services provided during the transition period (“business tr ansfer impacts”). For the summary of operating results and details by reportable segment, please refer to the financial results presentation materials for the First Half of the fiscal year ending December 31, 2026, posted on TDnet and the Company’s corporate information website (https://corp.shiseido.com/en/ir/library/tanshin/) on the same day as this consolidated settlement of accounts.
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3 [Consolidated Performance] (Millions of yen) Classification Six Months Ended June 30, 2026 % of Total Six Months Ended June 30, 2025 % of Total Year-on-Year Increase (Decrease) Amount Percentage FX- Neutral Like-for- Like Japan Business 144,701 29.0% 145,872 31.0% (1,170) (0.8)% (0.8)% (0.4)% China & Travel Retail Business 191,406 38.4% 173,941 37.0% 17,465 10.0% (0.1)% (0.1)% Asia Pacific Business 37,064 7.4% 33,663 7.2% 3,400 10.1% 1.9% 2.1% Americas Business 54,572 10.9% 51,469 11.0% 3,102 6.0% (0.9)% (0.9)% EMEA Business 66,863 13.4% 59,499 12.7% 7,363 12.4% (1.2)% (1.2)% Other 4,357 0.9% 5,386 1.1% (1,029) (19.1)% (20.0)% 6.2% Total 498,965 100.0% 469,831 100.0% 29,133 6.2% (0.6)% (0.2)% Classification Total sales including intersegment sales and internal transfers between segments Six Months Ended June 30, 2026 Six Months Ended June 30, 2025 Japan Business 145,002 146,605 China & Travel Retail Business 193,318 175,463 Asia Pacific Business 37,732 34,186 Americas Business 56,608 54,079 EMEA Business 70,113 62,320 Other 4,905 6,651 Subtotal 507,680 479,308 Adjustments (8,715) (9,476) Total 498,965 469,831 (Millions of yen) Classification Six Months Ended June 30, 2026 Ratio to Net Sales Six Months Ended June 30, 2025 Ratio to Net Sales Year-on-Year Increase (Decrease) Amount Percentage Japan Business 20,911 14.4% 19,506 13.3% 1,404 7.2% China & Travel Retail Business 47,630 24.6% 38,811 22.1% 8,819 22.7% Asia Pacific Business 2,222 5.9% (129) (0.4)% 2,351 － Americas Business 2,015 3.6% (5,830) (10.8)% 7,846 － EMEA Business (3,393) (4.8)% (2,557) (4.1)% (835) － Other (173) (3.5)% (900) (13.5)% 726 － Subtotal 69,212 13.6% 48,899 10.2% 20,313 41.5% Adjustments (24,779) ─ (25,526) ─ 746 ─ Total 44,432 8.9% 23,372 5.0% 21,059 90.1% Notes: 1. Like-for-like increase (decrease) in net sales excludes the impacts of foreign exchange translation and business transfer. 2. The “Other” includes the restaurant business, etc. 3. The ratio of core operating profit (loss) to net sales shows core operating profit or loss as a percentage of total sales including intersegment sales and internal transfers between segments. 4. The “Adjustments” in core operating profit (loss) primarily reflects the head office expenses that are not allocated to each reportable segment, the difference between the allocation amount to each reportable segment and the actual amount and cost differen ce, etc. The head office expenses are incurred mainly by head office and R&D, etc.
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4 (2) Financial Position Total assets increased by ¥6.6 billion from the end of the previous fiscal year to ¥1,273.9 billion, from an increase in cash and cash equivalents and increase in inventories which outweighed decrease in trade and other payables, and a decrease in property, plant and equipment. Liabilities decreased by ¥26.1 billion to ¥619.9 billion, primarily due to a decrease in trade and other payables which outweighed an increase in short- term borrowings. Equity increased by ¥32.7 billion to ¥654.0 billion, primarily due to an increase in retained earnings due to profit and an increase in exchange differences on translation of foreign operations due to the yen depreciation which was partially offset by a decrease in retained earnings associated with dividend payments. The net debt-to-equity ratio, which indicates the ratio of interest-bearing debt (excluding lease liabilities) less cash and cash equivalents to equity attributable to owners of parent, was 0.15. (Cash flow analysis) Cash and cash equivalents at the end of the first six months of fiscal year 2026 stood at ¥105.7 billion, representing an increase of ¥13.8 billion from ¥91.8 billion at the beginning of the current fiscal year. (Cash Flows from Operating Activities) Net cash provided by operating activities in the first six months of fiscal year 2026 decreased by ¥6.2 billion to ¥31.6 billion. The operating cash flow during the period mainly reflected increase factors such as ¥44.2 billion in Profit before tax, ¥35.9 billion in Depreciation and amortization and ¥9.6 billion in Decrease (increase) in trade receivables, etc., and decrease factors such as ¥24.3 billion in Increase (decrease) in trade payables and ¥9.5 billion in Increase (decrease) in other current liabilities, etc. (Cash Flows from Investing Activities) Net cash used in investing activities in the first six months of fiscal year 2026 decreased by ¥11.3 billion to ¥9.1 billion. The investing cash flow during the period mainly reflected ¥11.7 billion in Purchase of property, plant and equipment such as investment in factory equipment and ¥5.5 billion in Purchase of intangible assets such as investment in IT systems. (Cash Flows from Financing Activities) Net cash used by financing activities in the first six months of fiscal year 2026 decreased by ¥19.2 billion to ¥12.2 billion. The financing cash flow during the period mainly reflected cash outflows such as ¥12.6 billion in Repayments of lease liabilities and ¥8.0 billion in Payment of cash dividends, as well as cash inflows such as ¥13.0 billion in Increase of short-term borrowings. Consolidated Statements of Cash Flows (Summary) (Billions of yen) Category Amount Cash and cash equivalents at beginning of period 91.8 Net cash provided by (used in) operating activities Net cash provided by (used in) investing activities Net cash provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents 31.6 (9.1) (12.2) 3.5 Net change in cash and cash equivalents (decrease) 13.8 Cash and cash equivalents at end of period 105.7
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5 (3) Consolidated Forecast and Other Forward-Looking Information The consolidated earnings forecast remains unchanged from the previous forecast announced on February 10, 2026 in the “Consolidated Settlement of Accounts for the Fiscal Year Ended December 31, 2025.”
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6 2. Interim Condensed Consolidated Financial Statements and Notes (1) Interim Condensed Consolidated Statement of Financial Position As of December 31, 2025 As of June 30, 2026 Millions of yen Millions of yen Assets Current assets Cash and cash equivalents 91,839 105,671 Trade and other receivables 163,329 156,715 Inventories 147,135 151,620 Other financial assets 28,265 22,663 Other current assets 40,944 43,945 Total current assets 471,514 480,615 Non-current assets Property, plant and equipment 283,813 276,319 Goodwill 58,793 60,869 Intangible assets 176,116 175,573 Right-of-use assets 87,985 89,818 Investments accounted for using equity method 2,972 2,947 Other financial assets 96,401 99,773 Retirement benefit asset 35,998 36,176 Deferred tax assets 45,021 42,803 Other non-current assets 8,639 8,965 Total non-current assets 795,741 793,247 Total assets 1,267,256 1,273,863
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7 As of December 31, 2025 As of June 30, 2026 Millions of yen Millions of yen Liabilities and equity Liabilities Current liabilities Trade and other payables 141,571 104,842 Bonds and borrowings 30,000 73,000 Lease liabilities 20,205 20,737 Other financial liabilities 20,271 22,272 Income taxes payable 7,931 14,268 Provisions 7,734 4,044 Other current liabilities 117,275 110,152 Total current liabilities 344,989 349,318 Non-current liabilities Bonds and borrowings 181,617 151,640 Lease liabilities 91,337 91,519 Other financial liabilities 2,635 2,403 Retirement benefit liability 6,186 6,238 Provisions 4,446 4,635 Deferred tax liabilities 3,387 2,753 Other non-current liabilities 11,384 11,404 Total non-current liabilities 300,996 270,593 Total liabilities 645,985 619,912 Equity Share capital 64,506 64,506 Capital surplus 65,855 65,261 Treasury shares (1,868) (1,512) Retained earnings 320,612 342,697 Other components of equity 151,650 165,666 Total equity attributable to owners of parent 600,756 636,618 Non-controlling interests 20,513 17,332 Total equity 621,270 653,951 Total liabilities and equity 1,267,256 1,273,863
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8 (2) Interim Condensed Consolidated Statement of Profit or Loss and Interim Condensed Consolidated Statement of Comprehensive Income Interim Condensed Consolidated Statement of Profit or Loss Six Months Ended June 30 Six months ended June 30, 2025 Six months ended June 30, 2026 Millions of yen Millions of yen Net sales 469,831 498,965 Cost of sales 106,608 106,071 Gross profit 363,223 392,894 Selling, general and administrative expenses 347,525 356,288 Other operating income 2,829 5,324 Other operating expenses 442 4 Operating profit 18,084 41,925 Finance income 3,606 5,044 Finance costs 2,800 3,041 Share of profit of investment accounted for using equity method 312 272 Profit before tax 19,202 44,200 Income tax expense 10,122 15,186 Profit 9,080 29,014 Profit attributable to Owners of parent 9,535 29,697 Non-controlling interests (455) (683) Profit 9,080 29,014 Earnings per share Basic earnings per share (yen) 23.87 74.32 Diluted earnings per share (yen) 23.86 74.30
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9 Interim Condensed Consolidated Statement of Comprehensive Income Six Months Ended June 30 Six months ended June 30, 2025 Six months ended June 30, 2026 Millions of yen Millions of yen Profit 9,080 29,014 Other comprehensive income Items that will not be reclassified to profit or loss Financial assets measured at fair value through other comprehensive income 59 (351) Remeasurements of defined benefit plans 66 － Share of other comprehensive income of investments accounted for using equity method － (7) Total of items that will not be reclassified to profit or loss 125 (359) Items that may be reclassified to profit or loss Exchange differences on translation of foreign operations (24,792) 14,591 Share of other comprehensive income of investments accounted for using equity method (158) 83 Total of items that may be reclassified to profit or loss (24,950) 14,674 Other comprehensive income, net of tax (24,824) 14,315 Comprehensive income (15,744) 43,329 Comprehensive income attributable to Owners of parent (14,955) 43,372 Non-controlling interests (789) (42) Comprehensive income (15,744) 43,329
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10 (3) Interim Condensed Consolidated Statement of Changes in Equity Six Months Ended June 30, 2025 (From January 1, 2025 to June 30, 2025) Equity attributable to owners of parent Share capital Capital surplus Treasury shares Retained earnings Other components of equity Exchange differences on translation of foreign operations Financial assets measured at fair value through other comprehen- sive income Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Balance as of January 1, 2025 64,506 74,138 (2,325) 356,877 139,277 － Profit (loss) 9,535 Other comprehensive income (24,653) 96 Total comprehensive income － － － 9,535 (24,653) 96 Purchase of treasury shares (1) Disposal of treasury shares 410 (145) Dividends (3,994) Changes in ownership interest in subsidiaries (16) Share-based payment transactions (397) 603 Transfer to retained earnings 162 (96) Other (37) Total transactions with owners － (413) 409 (3,411) － (96) Balance as of June 30, 2025 64,506 73,725 (1,916) 363,001 114,623 － Equity attributable to owners of parent Non- controlling interests Total Other components of equity Total Remeasure- ments of defined benefit plans Total Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Balance as of January 1, 2025 － 139,277 632,474 22,169 654,643 Profit (loss) － 9,535 (455) 9,080 Other comprehensive income 66 (24,491) (24,491) (333) (24,824) Total comprehensive income 66 (24,491) (14,955) (789) (15,744) Purchase of treasury shares － (1) (1) Disposal of treasury shares － 265 265 Dividends － (3,994) (1,219) (5,213) Changes in ownership interest in subsidiaries － (16) 16 － Share-based payment transactions － 206 206 Transfer to retained earnings (66) (162) － － Other － (37) 22 (15) Total transactions with owners (66) (162) (3,578) (1,180) (4,758) Balance as of June 30, 2025 － 114,623 613,940 20,199 634,139
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11 Six Months Ended June 30, 2026 (From January 1, 2026 to June 30, 2026) Equity attributable to owners of parent Share capital Capital surplus Treasury shares Retained earnings Other components of equity Exchange differences on translation of foreign operations Financial assets measured at fair value through other comprehen- sive income Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Balance as of January 1, 2026 64,506 65,855 (1,868) 320,612 151,650 － Profit (loss) 29,697 Other comprehensive income 14,015 (333) Total comprehensive income － － － 29,697 14,015 (333) Purchase of treasury shares (1) Disposal of treasury shares 357 (22) Dividends (7,990) Changes in ownership interest in subsidiaries 165 Share-based payment transactions (759) 728 Transfer to retained earnings (341) 333 Other 12 Total transactions with owners － (593) 355 (7,612) － 333 Balance as of June 30, 2026 64,506 65,261 (1,512) 342,697 165,666 － Equity attributable to owners of parent Non- controlling interests Total Other components of equity Total Remeasure- ments of defined benefit plans Total Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Balance as of January 1, 2026 － 151,650 600,756 20,513 621,270 Profit (loss) － 29,697 (683) 29,014 Other comprehensive income (7) 13,674 13,674 640 14,315 Total comprehensive income (7) 13,674 43,372 (42) 43,329 Purchase of treasury shares － (1) (1) Disposal of treasury shares － 334 334 Dividends － (7,990) (1,947) (9,938) Changes in ownership interest in subsidiaries － 165 (175) (10) Share-based payment transactions － (30) (30) Transfer to retained earnings 7 341 － － Other － 12 (1,013) (1,001) Total transactions with owners 7 341 (7,510) (3,137) (10,648) Balance as of June 30, 2026 － 165,666 636,618 17,332 653,951
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12 (4) Interim Condensed Consolidated Statement of Cash Flows Six months ended June 30, 2025 Six months ended June 30, 2026 Millions of yen Millions of yen Cash flows from operating activities: Profit before tax 19,202 44,200 Depreciation and amortization 35,411 35,910 Impairment losses (reversal of impairment losses) 15 147 Loss (gain) on disposal of non-current assets 1,019 456 Increase (decrease) in retirement benefit asset or liability 419 (156) Interest and dividend income (3,597) (4,615) Interest expenses 2,284 2,622 Share of profit of investments accounted for using equity method (312) (272) Decrease (increase) in trade receivables 12,662 9,614 Decrease (increase) in inventories 5,201 (674) Increase (decrease) in trade payables (28,771) (24,322) Increase (decrease) in other current liabilities (872) (9,542) Other (1,896) (15,325) Subtotal 40,767 38,043 Interest and dividends received 1,285 1,481 Interest paid (1,919) (2,069) Income taxes refund (paid) (2,246) (5,812) Net cash provided by (used in) operating activities 37,888 31,642 Cash flows from investing activities: Payments into time deposits (12,690) (15,374) Proceeds from withdrawal of time deposits 14,132 21,817 Purchase of property, plant and equipment (10,584) (11,732) Proceeds from sales of property, plant and equipment and intangible assets 16 361 Purchase of intangible assets (12,160) (5,452) Other 878 1,257 Net cash provided by (used in) investing activities (20,407) (9,123) Cash flows from financing activities: Net increase (decrease) in short-term borrowings and commercial papers 6,079 13,000 Redemption of bonds (20,000) － Purchase of treasury shares (1) (1) Proceeds from disposal of treasury shares 0 0 Dividends paid (4,009) (8,028) Dividends paid to non-controlling interests (1,611) (4,173) Repayments of lease liabilities (11,587) (12,629) Other (285) (363) Net cash provided by (used in) financing activities (31,415) (12,195) Net decrease in cash and cash equivalents (13,935) 10,323 Cash and cash equivalents at beginning of period 98,479 91,839 Effect of exchange rate changes on cash and cash equivalents (3,027) 3,509 Cash and cash equivalents at end of period 81,517 105,671
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13 (5) Notes Concerning Interim Condensed Consolidated Financial Statements (Note on Assumptions of a Going Concern) Not applicable. (Change in Presentation) (Condensed Interim Consolidated Statement of Cash Flows) “Increase (decrease) in other current liabilities” under “Cash flows from operating activities,” which was included in “Other” in the six months ended June 30, 2025, has been stated as a separate account item from the six months ended June 30, 2026 as the amount is material. In addition, “Increase (decrease) in provisions for structural reform” under “Cash flows from operating activities,” which had been stated as a separate account item in the six months ended June 30, 2025, has been included in “Other” from the six months ended June 30, 2026 as the amount is no longer material. In order to reflect this change in presentation, interim condensed consolidated financial statement of cash flows for the six months ended June 30, 2025 has been reclassified. As a result, ¥(872) million, which was included in “Other” under “Cash flows from operating activities” in the interim condensed consolidated financial statement of cash flows for the six months ended June 30, 2025 has been reclassified to “Increase (decrease) in other current liabilities”. In addition, ¥2,564 million, which had been presented as “Increase (decrease) in provisions for structural reform” under “Cash flows from operating activities” in the interim condensed consolidated financial statement of cash flows for the six months ended June 30, 2025, has been reclassified to “Other.” (Segment Information, etc.) (1) Overview of Reportable Segments The Group’s operating segment is a component whose separate financial data is available and that is regularly reviewed by the management in order to make decisions on allocation of managerial resources and assess business performance. The Group’s main business is the manufacturing and sale of cosmetics. The Group engages in business activities under a matrix organization encompassing brand categories based on consumer purchasing style and five regions (Japan, China & Travel Retail, Asia Pacific, Americas, and EMEA). This matrix organization gives the leader in each region broad authority as well as responsibility for sales and profits to ensure flexible decision-making. In specific terms, the Group’s five reportable segment s, which mainly refer to regions, are the “Japan Business,” “China & Travel Retail Business,” “Asia Pacific Business,” “Americas Business,” and “EMEA Business.” The “Japan Business” mainly comprises domestic business by brand category (Prestige, Fragrance, Premium, etc.) and the healthcare business (sale of health & beauty foods as well as over-the-counter drugs, etc.). The “China & Travel Retail Business” covers business in Chinese Mainland, Hong Kong and the operation of worldwide duty-free stores by brand category (Prestige, Fragrance, Cosmetics, etc.). The “Asia Pacific Business” covers business in the Asia and Oceania regions excluding Japan and Chinese Mainland and Hong Kong by brand category (Prestige, Fragrance, Cosmetics, etc.). The “Americas Business” covers business in the Americas region by brand category (Prestige, Fragrance, etc.). The “EMEA Business” covers business in Europe, the Middle East and Africa regions by brand category (Prestige, Fragrance, etc.). The “Other” includes the restaurant business, etc. (2) Method to Determine Sales and Profit (Loss) by Reportable Segment Profit by reportable segments is stated on the basis of core operating profit, which is operating profit (loss) calculated by excluding profits or losses incurred by non-ordinary factors (non-recurring items) such as structural reform expenses, impairment losses, acquisition related costs, etc. Intersegment transaction pricing and transfer pricing are determined based on prevailing market prices.
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14 (3) Segment Revenue and Business Result Revenue and business results by reportable segment of the Group are as follows. Six Months Ended June 30, 2025(From January 1, 2025 to June 30, 2025) (Millions of yen) Reportable Segment Japan Business China & Travel Retail Business Asia Pacific Business Americas Business EMEA Business (Note 1) Net sales Sales to external customers 145,872 173,941 33,663 51,469 59,499 Intersegment sales or transfer 733 1,522 523 2,610 2,821 Total 146,605 175,463 34,186 54,079 62,320 Segment profit (loss) i.e. Core operating profit 19,506 38,811 (129) (5,830) (2,557) Other (Note 2) Total Adjustments (Note 3) Consolidation Net sales Sales to external customers 5,386 469,831 － 469,831 Intersegment sales or transfer 1,265 9,476 (9,476) － Total 6,651 479,308 (9,476) 469,831 Segment profit (loss) i.e. Core operating profit (900) 48,899 (25,526) 23,372 Note: 1. The “EMEA Business” includes the Middle East and Africa regions. 2. The “Other” includes the restaurant business, etc. 3. The “Adjustments” in core operating profit (loss) primarily reflects the head office expenses that are not allocated to each operating segment (¥(33,767) million), the difference between the allocation amount to each operating segment and the actual amount (¥3,092 million) and cost difference (¥5,349 million), etc. The expenses are incurred mainly by head office, R&D, etc.
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15 Six Months Ended June 30, 2026 (From January 1, 2026 to June 30, 2026) (Millions of yen) Reportable Segment Japan Business China & Travel Retail Business Asia Pacific Business Americas Business EMEA Business (Note 1) Net sales Sales to external customers 144,701 191,406 37,064 54,572 66,863 Intersegment sales or transfer 300 1,912 667 2,036 3,249 Total 145,002 193,318 37,732 56,608 70,113 Segment profit (loss) i.e. Core operating profit 20,911 47,630 2,222 2,015 (3,393) Other (Note 2) Total Adjustments (Note 3) Consolidation Net sales Sales to external customers 4,357 498,965 － 498,965 Intersegment sales or transfer 547 8,715 (8,715) － Total 4,905 507,680 (8,715) 498,965 Segment profit (loss) i.e. Core operating profit (173) 69,212 (24,779) 44,432 Note: 1. The “EMEA Business” includes the Middle East and Africa regions. 2. The “Other” includes the restaurant business, etc. 3. The “Adjustments” in core operating profit (loss) primarily reflects the head office expenses that are not allocated to each operating segment (¥(29,217) million), the difference between the allocation amount to each operating segment and the actual amount (¥5,789 million) and cost difference (¥(1,432) million), etc. The expenses are incurred mainly by head office, R&D, etc.
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16 Adjustments from segment profit to operating profit (loss) as follows: Six months ended June 30, 2025 Six months ended June 30, 2026 Millions of yen Millions of yen Segment profit 23,372 44,432 Structural reform expenses (4,817) (1,952) Impairment losses (255) (37) Reversal of impairment losses 239 4 Gain on sale of non-current assets － 17 Acquisition-related costs (25) － One-time costs related to internal system changes (18) － Other (410) (540) Operating profit 18,084 41,925 “Structural reform expenses” for the six months ended June 30, 2025 are the costs associated with the “Action Plan 2025-2026” such as the costs for workforce reductions in Americas Business. The expenses are included in “Cost of sales,” and “Selling, gene ral and administrative expenses” in the interim condensed consolidated statement of profit or loss. “Structural reform expenses” for the six months ended June 30, 2026 are the costs associated with the “Action Plan 2025-2026” and the costs associated with the “2030 Medium -Term Strategy” related to the closure of the Hsinchu Factory of Taiwan Shiseido Co., Ltd., a consolidated subsidiary. The expenses are included in “Cost of sales,” “Selling, general and administrative expenses” and “Other operating expenses” in the interim condensed consolidated statement of profit or loss. “Acquisition-related costs” for the six months ended June 30, 2025 are the direct costs associated with the acquisition of DDG Skincare Holdings LLC. The expenses are included in “Selling, general and administrative expenses” in the interim condensed consolidated statement of profit or loss. “One-time costs related to internal system changes” for the six months ended June 30, 2025 are included in “Selling, general and administrative expenses” in the interim condensed consolidated statement of profit or loss.