November 13, 2020

Takashige Negishi

President and Representative Director

Yakult Honsha Co., Ltd.

Results for the second quarter

ended September 30, 2020

Future management outlook

The Sale of Yakult Stock by Danone

(Figure 1)

Result

(exchange-rate effects)

Initial forecast

(announced May 14)

Compared to

initial forecast

Result in previous

yearYear-on-year

Net sales

190.4

{(6.8)}

203.0 93.8% 201.9 94.3%

Operating profit

24.1

{(1.5)}

23.0 105.1% 23.7 101.8%

Ordinary profit

33.4

{(2.2)}

29.0 115.5% 30.3 110.5%

Profit attributable to

owners of parent

21.7

{(1.3)}

18.5 117.3% 20.6 105.1%

(Figure 2)

(billion yen)

Consolidated financial results (Apr. – Sep. 2020)

Exchange-rate effects are year-on-year values

Amended forecast

(exchange rate effects)

Initial forecast

(announced May 14)

Compared to

initial forecast

Result in previous

yearYear-on-year

Net sales388.0

{(5.3)}

411.0 94.4% 406.0 95.6%

Operating profit

43.0

{(1.1)}

47.0 91.5% 45.6 94.1%

Ordinary profit

58.5

{(1.5)}

59.0 99.2% 58.4 100.0%

Profit attributable to

owners of parent

40.0

{(0.8)}

37.0 108.1% 39.7 100.7%

Basic earnings

per Share 249.30 yen 230.95 yen 248.04 yen

Full-year forecast (consolidated) for year ending March 31, 2020

Exchange-rate effects are values compared to the initial forecast

(Figure 3)

(billion yen)

Domestic food and beverage business

(Figure 4)

FYE Mar.

2020

First Half

FYE Mar.

2021

First Half

YoY

Dairy

products44,096 46,165 104.7%

Other

beverages,

etc.

14,880 12,775 85.9%

Total 58,977 58,940 99.9%

Domestic food and beverage business: Net sales

Million yen

FYE Mar.

2020

First Half

FYE Mar.

2021

First Half

YoY

Via vending

machines50.8% 45.3% (5.5)%

Not via

vending

machines

49.2% 54.7% + 5.5%

100.0% 100.0%

Other beverages: Sales value breakdown

106.0

95.6

105.7

101.0 102.2

104.6

102.4

Apr.

2020

May

2020

Jun.

2020

Jul.

2020

Aug.

2020

Sept.

2020

Apr.-Sept.

2020

90.0

100.0

110.0

%YoY comparison of bottles of dairy products sold per day in Japan during Apr.–Sept.

Domestic food and beverage business: New product sales regions

(Figure 5)

Yakult 1000

sales region

Yakult 400W

sales region

As of October 31, 2020

Expansion

under

consideration

Expansion

under

consideration

Domestic food and beverage business

Workstyle reforms for Yakult Ladies

Various working

arrangements available

In-store sales promotion activities

avoiding personal interaction

Confirming the best delivery method to meet each customer’s needs

Many customers want personal interactions during delivery, but some do not.

The methods below are offered to customers wanting to avoid interactions during delivery & payment.

(Figure 6)

Delivery to a cooler box Ordering online via “Yakult Delivery Net” Ordering by smartphone

Use of digital POP promotional resources, etc.

Countries and Regions Information

Country

Marketing

Population

(Th.

people)

Sales Result Jan. ~ Sep. 2020(bottles per day)

Y o Y

(%)

Sales / Marketin

g pop. (%)

Country

Marketing

Population

(Th.

people)

Sales Result Jan. ~ Sep. 2020(bottles per day)

Y o Y

(%)

Sales / Marketin

g pop. (%)

Hong Kong 8,260 469,620 87.8 5.69 Brazil 101,290 1,467,169 93.9 1.45

Singapore 5,610 277,367 121.6 4.94 Mexico 95,039 3,608,624 93.1 3.80

Indonesia 200,000 6,624,995 106.8 3.31 USA 331,990 450,702 119.9 0.14

Australia 25,000 268,999 106.7 1.08 Americas Total 528,319 5,526,495 95.0 1.05

Malaysia 27,000 348,274 97.1 1.29 Netherlands 17,412 166,548 104.5 0.96

Vietnam 38,600 657,233 127.0 1.70 Belgium 49,682 80,736 104.3 0.16

India 131,000 194,444 79.2 0.15 UK 71,358 222,692 115.0 0.31

Middle East 24,020 15,614 84.8 0.07 Germany 82,430 71,591 96.7 0.09

Myanmar 5,160 16,366 765.8 0.32 Austria 8,822 11,323 116.6 0.13

Guangzhou 84,490 2,967,962 96.9 3.51 Italy 61,013 98,526 105.0 0.16

Shanghai 24,150 551,525 92.8 2.28 Europe Total 290,717 651,416 107.1 0.22

Beijing 30,530 421,240 92.0 1.38 (Consolidated Total) 2,056,286 22,776,698 99.3 1.11

Other areas of

China633,430 3,785,148 93.7 0.60 Taiwan 23,172 682,943 96.7 2.95

China 772,600 7,725,875 94.7 1.00 Thailand 66,560 2,074,790 94.2 3.12

Asia/Oceania

Consolidated Total1,237,250 16,598,787 100.5 1.34 Korea 51,700 2,800,774 88.7 5.42

Philippines 91,400 2,941,178 91.3 3.22

(Equity method Total) 232,832 8,499,685 91.5 3.65

Total 2,289,118 31,276,383 97.0 1.37

(Figure 7)

International business (China 1)

50.9% 51.7%

34.5% 35.0%

7.6% 7.1%5.8%2.8%

1.3% 3.4%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

Jan.–Sept. 2019 Jan.–Sept. 2020

E-commerce (EC)

Others

Convenience stores

Owner-operated stores

Supermarkets/

hypermarkets

The proportion of EC sales in the

retail store channel increased

(1.3% 3.4%)

Business operations slowed due to

damage caused by flooding in the

Yangtze River basin after

persistent rain

(Figure 8)Breakdown of Yakult’s sales by retail store channel (excluding Guangzhou)

International business (China 2)

Increase in EC business operators handling

chilled distribution Actively increase EC

transactions

The start of EC transactions is planned for

the Guangzhou area, where EC has not yet

been introduced

Strengthen organizational structure in the

Guangzhou area

Aggressively develop the home delivery

channel in Shanghai, Beijing, and other areas

of China

Further develop home delivery channel

Ratio of sales volume to marketing population: 1.00%

(Daily bottle sales of approx. 7.7 million / marketing population of approx. 770 million)

Current marketing population is approx. half of the total population

(Marketing pop. of approx. 770 million / total population of approx. 1,400 million)

(Figure 9)

Actions going forward

Address EC market

Cultivate and expand markets

7,606 8,439

9,252 9,881

10,511

End Dec.

2016

End Dec.

2017

End Dec.

2018

End Dec.

2019

End Sept.

2020

0

5,000

10,000 157,238

185,392

216,149 229,043 239,734

0

50,000

100,000

150,000

200,000

250,000

International business (Indonesia)

People

No. of Yakult Ladies

Yakult Ladies’ activities slowed due to

stricter social restrictions in response to the

spread of the novel coronavirus

Bottle sales declined temporarily, but

recovered rapidly from May onward

No. of Yakult Ladies exceeded 10,000 in

May and reached 10,511 by the end of

Sept.

Reinforcement of sales organization

resulted in highest-ever sales of approx. 7.3

million bottles/day in Sept.

No. of Yakult Ladies and no. of stores

Stores

No. of stores

(Figure 10)

International business (The Americas)

GDP growth rate for 2019 as a whole was negative for the

first time in 10 years

In the Apr.–Jun. 2020 quarter, the rate was minus 18.7%

Yakult Ladies’ ratio of effective working days declined due

to the spread of the novel coronavirus

Maintained usual levels of production and delivery

Steady increase in no. of bottles sold in 6 southwestern

states, where full-scale sales launched in 2007

Starting July 2019, 15 eastern states were added to the sales

area, which was incrementally expanded to the entire US

(stores increased by 1,562 in FY2020)

Mexico

USA

Yakult was provided free of charge to medical institutions,

facilities for the elderly, schools, etc.

(Figure 11)

27.825.6

21.619.6

8.9

17.5

2.81.3

(1.8) (0.8)

0.6

(0.5)

FY2016 FY2017 FY2018 FY2019 FY2020

First half

FY2020

(Forecast)

-3

7

17

27

Net sales Operating profit (loss)

Pharmaceutical business

(Figure 12)

Measures to restore sales

Ensure sales from existing products

Pursue in-licensing and joint development of

new anticancer drugs

Continuously launch new generic drugs

Form sales tie-ups for products developed or

manufactured by other companies

Pursue in-house discovery and development of

new drug candidates

In March 2020 Nihon Servier obtained

approval to manufacture and sell the

antineoplastic drug Onivyde®, which was

launched in June 2020.

Medical institutions adopted the drug faster

than expected.

Alliance with other companies

Billion yenDrug price revision

(Oct. 2019)

Reduced by approx.

12%Drug price revision

(Apr. 2020)

Reduced by approx.

5%

Drug price revision

(Apr. 2018)

Reduced by

approx. 18%

Drug price revision

(Apr. 2016)

Reduced by

approx.15%

(YoY comparison:

85.8%)

ESG initiatives

(Figure 13)

Environment

GovernanceSocial

Initiatives to address the plastics issue

・Yakult has already stopped using straws in certain

countries

・ In Jan. 2019 Yakult submitted its Declaration of

Action on Plastic Recycling to the Japanese

Ministry of Agriculture, Forestry and Fisheries

– 2025: Establish underlying technology for

eco-friendly containers and packaging

– 2030: Switch to new packaging as much as

possible

・Malaysia: Yakult Ace

Long-term enhancement of corporate value

・ Japan: New Yakult 10-pack

Products now sold without straws:

・ Japan: New Yakult 10-pack

・Malaysia: Yakult Ace

・ Singapore: Yakult

・Australia: Yakult Family 10-pack

Statements contained in these materials with respect to Yakult's plans,

forecasts and other statements that are not historical facts are forward-

looking statements that involve risks and uncertainties that could cause

actual results to differ substantially from expectations.

The information contained in these materials is not intended as a

solicitation for investment. Furthermore, Yakult does not guarantee the

accuracy of the contents of these materials. Yakult and the provider of

these materials disclaim any responsibility for any loss or damage that

should arise from the use of this information.

CAUTIONARY STATEMENT