Message from the CEO

First of all, I would like to extend my heartfelt condolences to the families of the victims of COVID-19, and to express my warmest sympathy to all those who have found themselves in difficult circumstances because of this pandemic.

In 2019, Shiseido achieved robust growth despite an increasingly uncertain business environment: Continuing the trend of the previous year, our net sales, operating profit, and net profit reached record highs. Our operating margin climbed to 10.1%, hitting double digits for the first time. Our prestige brands, which we have been intensely focusing on, drove growth. In addition, we acquired the American skincare brand Drunk Elephant and worked at strengthening the global presence of our Japanese brands ELIXIR and ANESSA.

Crisis as a Transformation Opportunity

The impact of COVID-19 will most likely reverberate beyond 2020, reshaping consumer behavior and the entire beauty industry. Shiseido needs to swiftly adapt to this new reality and evolve into an even stronger company with a potential for further expansion. To that end, we position 2020 as a year to “Defend Business and Review Medium-Term Strategy” while in 2021-2022 we will concentrate our efforts on “Fundamental Reforms” in order to realize our VISION for 2023 and beyond with a resilient revenue base and a solid foundation for growth.

BEAUTY INNOVATIONS FOR A BETTER WORLD

Shiseido is strengthening its global initiatives in ESCG (environment, society, culture, and governance), which are aimed at solving social issues and creating a sustainable society where people can live in happiness.

In 2020, in response to the spread of COVID-19, we promptly launched the “Relay of Love Project.” Additionally, we implemented a variety of support initiatives, such as producing a hand sanitizer specially developed for sensitive and rough skin and distributing it to medical institutions around the world.

Beauty brings confidence and courage, joy and new energy to people. We believe that, in today’s difficult environment, beauty can help reinvigorate society. That now more than ever it has the power to change the world.

Aiming to “Be a Global Winner with Our Heritage,” we will research and develop beauty innovations that vigorously build new value. With this mission in mind, we will continue to make steadfast progress towards our goal as One Shiseido.

We look forward to the continued support of our shareholders and investors.

May 2020

Masahiko UotaniRepresentative Director, President and CEO