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Copyright©2012 Shiseido Co., Ltd. All Rights Reserved .No reproduction without permission.

Tatsuomi Takamori

Director, Corporate Executive Officer

SHISEIDO Co., Ltd.

March 1, 2012In 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 our actual results and achievements to differ from those anticipated in these statements.

2012 Mizuho Investment Conference

New Business Model

for the Domestic Cosmetic Business

-Start of Full-scale Web Marketing-

New Business Model New Business Model

for the Domestic Cosmetic Business for the Domestic Cosmetic Business

--Start of FullStart of Full--scale Web Marketingscale Web Marketing--

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Theme of Today’s Presentation

Focusing on O2O MarketingFocusing on O2O Marketing

O2O = Online to Offline Business fusing real and virtual worlds

Creating a new business model that fully leverages our assets and fuses real and virtual worlds

Transforming the competitive environment of the cosmetics market itself

Creating a new business model that fully leverages our assets and fuses real and virtual worlds

Transforming the competitive environment of the cosmetics market itself

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Company Profile

1872

¥64.5 billion (As of March 31, 2011)

31,310 〔12,977〕*

Year ended March 2011(consolidated basis)

FoundationFoundation

CapitalCapital

Number of EmployeesNumber of Employees

Operating Results

Operating Results

Net SalesNet Sales ¥¥670.7670.7 billionbillion((overseas ratio overseas ratio 43%)43%)

Operating IncomeOperating Income ¥¥44.5 billion44.5 billion

Operating MarginOperating Margin 6.6%6.6%

Ordinary IncomeOrdinary Income ¥¥44.5 44.5 billionbillion

Net IncomeNet Income ¥¥12.8 12.8 billionbillion

*The number of employees shown denotes full-time employees. Annual average number of temporary employees is shown in brackets.

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Creation of Food Culture

LL’’osierosier (1986~)(1986~)Shiseido ParlourShiseido Parlour (1902~(1902~))

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Business Expansion

San Marino

CroatiaSloveniaAndorra

Monaco

Czech

HungarySlovakia

Luxembourg

Netherlands

Switzerland

GreeceCyprus

Portugal

Ireland

Norway

Denmark

Sweden

Turkey

Poland

Russia

Ukraine Kazakhstan

Iceland

Finland

Malta

EstoniaLatvia

Lithuania

Lebanon

Israel

Saudi Arabia

Kuwait

UAE

Bahrain

Qatar

OmanMyanmarマー

Indonesia

Malaysia

Brunei

Cambodia Philippines

Vietnam

India

Fiji

MexicoJordan

Italy

France

Germany

U.K.

Spain

Taiwan

Singapore

China

Thailand

Korea

New Zealand

Australia

U.S.

Canada

Brazil

Japan

Belgium

Austria

51 countries in Europe

9 countries in the

Middle East

15 countries/ regions in Asia (excluding Japan)

3 countries in Oceania

6 countries in the Americas

BulgariaRomania

Operating in 88 countries and regions (including Japan) worldwidOperating in 88 countries and regions (including Japan) worldwide, e, with sales subsidiaries in 21 countries and regions, with sales subsidiaries in 21 countries and regions,

11 overseas production facilities, and 20,200 overseas employees11 overseas production facilities, and 20,200 overseas employees

3 countries in Africa

* Number of countries/regions as at February 29, 2012. Number of overseas employees as at December 31, 2011

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Shiseido’s Hallmark Hair Care Line

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Global Brand

Sold in 88 countries and regions

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Top-end prestige brand

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PARFUMS ISSEY MIYAKE PARFUMS JEAN PAUL GAULTIER parufums narciso rodriguez ELIE SAAB LE PARFUM

※As of the end of December 2011

Four Designers’ Fragrance Brands

Launched in 1993,sold in 107 countries/regions

Launched in 1992, sold in 107 countries/regions

Launched in 2003, sold in 74 countries/regions

Launched in July, 2011

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Professional Business

Acquired in 2000,sold in 85 countries/regions

Aromatherapy brandAcquired in 1986, sold in 58 countries/regions

Luxury aesthetic brand

※As of the end of December 2011

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43%

18%

0

100

200

300

400

500

600

700

800

９２９３９４９５９６９７９８９９０００１０２０３０４０５０６０７０８０９１０１１/３0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

２５Ｐ

Trend in Sales and Overseas Sales RatioOverseas sales ratio increased 25POverseas sales ratio increased 25P in 10 years.in 10 years.

Overseas sales ratio

Consolidated net sales

Billion of yen

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Domestic Cosmetics Business: Sales Trend

Sales have weakened since Lehman shock in 2008.Sales have weakened since Lehman shock in 2008.

01 02 03 04 05 06 07 08 09 FY2010

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Changes in the Japanese Market Changes in the Japanese Market Changes in the Japanese Market

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Changes in the Environment Surrounding Japan

Challenges for Japanese companies

Strong yenStrong yen

High corporate tax rateHigh corporate tax rate

Aging population Aging population

Great East Japan EarthquakeGreat East Japan Earthquake

Need to reduce emissionsNeed to reduce emissions

Power shortagesPower shortages

Changes in the Cosmetic Market

The influence of ITThe influence of IT

New entrants from New entrants from outside the cosmetics industryoutside the cosmetics industry

・・・・・・

Alliances in Alliances in the retail industrythe retail industry

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Development of Information Technology

There are no longer any geographical or time

restrictions on information.

Changes in customers’buying behavior

Changes in customers’buying behavior

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Changes in Customers’ Buying Behavior

Consumers have evolved into originators of Consumers have evolved into originators of information.information.

Top downBottom up

From “Information Consumers” to “Information Originator”

Information (culture, fashion, consumption)

Information (culture, fashion, consumption)

Mass audience of obedient receiversConnecting and communicating with

each other across the Internet

Top down

One-Way Both Directions

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Changes in Customers’ Buying Behavior

Comparing and browsing across

categories

Shopping without any geographical

boundaries or time restrictions

×

Companies must also change their marketing activities

Companies must also change their marketing activities

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Music Industry

Dramatic Sales Decline of Dramatic Sales Decline of the Retailers which Mainly Sell CDs.the Retailers which Mainly Sell CDs.

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Publishing Industry

In contrast to the rise of Amazon, the number of

small and midsize books stores is falling.

In contrast to the rise of Amazon, In contrast to the rise of Amazon, the number of the number of

small and midsize books stores is falling. small and midsize books stores is falling.

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Influence of IT on the Cosmetics Market

Cosmetics Ranks the FourthCosmetics Ranks the Fourth in the Internet Sales Ranking in the Internet Sales Ranking

（％）

Survey of individual purchases via the internet over a one-year period

Publications

ン

IT related products( Computers)

Music, Movies, Games

TravelAudio-Visual( TV, DVD, Camera)

Fresh Food（Vegetables, meat, fish etc）

Confectionery

Packaged food

Health foodBeverages

Rice

Household goods (shampoo, detergent)

Alcoholic beverages

45.7

29.1

26.6

24.122.7

21.0

20.9

18.8

17.1

14.7

13.4

12.3

11.6

11.5

10.1

Base For %; 1,231

Cosmetics

Fashion (clothes, bags, shoes, accesarries)

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New Business Domains

PlusPlus

Entry to Platform BusinessEntry to Platform Business

Deployment of Direct MarketingDeployment of Direct Marketing

Existing Store Sales BusinessExisting Store Sales Business

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Entry to Platform BusinessEntry to Platform BusinessEntry to Platform Business

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Name of Website

Online added-value shopping mall established to create encounters with new customers

Beauty Company

Enterprises, experts and users become friends and cooperate with each other

Users lead beautiful, enriched lives

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Attract Enterprises in Six CategoriesPursuit of beauty

from withoutPursuit of beauty

from within

Living Living beautifullybeautifully

Beauty

Relaxation

Fashion

Medical

Sophistication

Healthcare

Heal

Enrich

Cure

Dress up

Fulfill

Cultivate

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SHISEIDO’s New Direct MarketingSHISEIDOSHISEIDO’’ss New Direct MarketingNew Direct Marketing

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Name of WebsiteProviding various Providing various ““advantagesadvantages”” for for

watashiwatashi = me (the customer)= me (the customer)

”Watashi” is a word that denotes the first person, meaning “I” or “myself.”

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Major Contents of

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33

44

Online counsellingOnline counselling

Store navigationStore navigation

Online shopOnline shop

CRM using customer databaseCRM using customer database

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