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Unicharm

Group

Integrated Report

2022

The Unicharm Way

The Unicharm Ideals, established in 1974, declare Unicharm's commitment to developing together

with society, which has served as the guiding principle of the Company's management.

In 2020, Unicharm clarified its purpose (reason for existence) as contributing to the achievement of the United Nations Sustainable Development Goals (SDGs). At the same time, we separated our purpose into our mission, vision, and value while specifying what each and every employee should aim to achieve and the actions they should take to that end.

Formulation of The Unicharm Way

Purpose

Mission

To realize a cohesive

society (social inclusion)

Vision

Value

Management

with resonance

SDGs

Unicharm Ideals

Creating a better quality of life for everyone

Five Great Pillars and

Associate Code of Conduct

Beliefs & Pledges and

Corporate Code of Conduct

Three Aspects of Our DNA

= BOP-Ship

Laws & Regulations

Ethics

Purpose

The reason for our existence

Contributing to the

achievement of the SDGs

Mission

What we seek to accomplish

Unicharm Ideals

To Realize a Cohesive Society (Social Inclusion)

The cohesive society (social inclusion) envisioned by Unicharm entails a society in which each person is independent while supporting others in a way that allows everyone to have just the right sense of distance so that, in addition to vulnerable members of society, those who are at a disadvantage either temporarily or for an extended period due to aging, illness, childbirth, menstruation, or other factors can spend their lives in the way they so wish regardless of the situation. Unicharm aims to realize the creation of such a society.

• We contribute to creating a better quality of life for everyone by offering only the finest products and services to the market and customers, both at home in Japan and abroad.
• We strive to pursue proper corporate management principles that combine corporate growth, employee well-being, and the fulfillment of our social responsibilities.
• We bring forth the fruits of cooperation based on integrity and harmony, by respecting the independence of the individual and striving to promote the Five Great Pillars.*

(Established in 1974)

* The Five Great Pillars (1) Founder's spirit, (2) Enterprising spirit, (3) Spirit of simplicity and fortitude, (4) Spirit of collaboration, and (5) Spirit of respecting people

Vision

How we aim to accomplish

our mission

Implementing "NOLA & DOLA"

"NOLA & DOLA," Unicharm's corporate philosophy, articulates the Company's aim to supply all people, from newborns to the elderly, with products and services that provide mental and physical support through gentle care so that they may be free of their burdens and can fulfill their dreams. Offering value in terms of "NOLA & DOLA" will allow us to realize a cohesive society.

NOLA

Necessity of Life with Activities

Helping free people from various burdens to enable them to enjoy good health, both in mind and body.

"NOLA" embodies the dispelling of negativity, such as discomfort, inconvenience, and unsanitary conditions- in other words, the provision of value that aims to elevate people from negative to neutral living conditions.

DOLA	Contributing to fulfilling the dreams of each and every person
"DOLA" expresses the creation of value that aims to raise people from neutral to positive living conditions,
Dreams of Life with Activities
allowing them to experience the joy of living and of pleasure and to fulfill their dreams.

Five Great Pillars and Associate Code of Conduct

Creativity & innovation

We will respect the creation of new social value and maintain a spirit that always seeks out innovation.

Ownership

We will follow in the footsteps of our founder and strive to identify and solve issues from a Companywide perspective to achieve our management targets.

Challenge

We will continue to transform our abilities without fear of failure and maintain a positive attitude based on our belief in taking on challenges to unlock the unlimited potential of employees.

Leadership

We will become leaders who are capable of motivating people with our own determination by clearly showing the way for the organization to move forward.

Fair business practice

We will carry out fair corporate activities that combine the spirit of respecting humanity and dignity with high ethical standards.

(Established in 1999)

Beliefs & Pledges and Corporate Code of Conduct

Pledge to our customers

We pledge to earn the full support of customers by always doing everything we can.

Pledge to our shareholders

We pledge to distribute industry-leading returns to shareholders.

Pledge to our business partners

We pledge to achieve mutual growth by maintaining fair and equitable relationships.

Pledge to our employees

We pledge to enable all employees and their families to achieve happiness and attain pride and confidence.

Pledge to society

We pledge to contribute to the economic and emotional fulfillment of the entire global population through our corporate activities.

(Established in 1999)

Value

Our underlying aspiration

Promoting Management with Resonance

Management with resonance is a unified management model promoted by all of Unicharm's employees. This model serves as a framework for the senior management team and frontline employees to work as one toward a shared goal. All Unicharm employees aim to realize their shared goal of creating a cohesive society by aligning their direction while constantly thinking and acting for themselves.

BOP-Ship and the Three Aspects of Our DNA

Forming the backbone of Unicharm's activities, BOP-Ship-comprising Best Practice-ship, Ownership, and Partnership- represents a rewording of the Three Aspects of Our DNA, which itself embodies the corporate culture and spirit that has been passed on ceaselessly since our founding, to enable employees in various countries and regions throughout the world to better understand the Three Aspects of Our DNA.

BOP-Ship

Best Practice-Ship

Best Practice-ship refers to accumulating the best practices, abandoning past resolutions, constantly making updates, and incorporating best practices with an emphasis on speed.

Ownership

Ownership refers to recognizing everything as "our own matter" and thinking and acting on our own initiative to overcome difficulties.

Partnership

Partnership entails always respecting collaboration with peers with an altruistic mind. Collaboration creates internal and external

cross-organizational communication, and furthering such communication will lead to innovation.

Three Aspects of Our DNA

Create value through personal transformation

Changing yourself and achieving personal growth to create new value

Find reason within ourselves

Growing through learning from failures

Maintain our No. 1 position through continued and dedicated services

Always providing our customers with the highest satisfaction

Unicharm Group Integrated Report 2022

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The Future We Envision

A society in which everyone can maximize individual potential and live life to its fullest.

A society in which we comfortably coexist, helping each other while respecting mutual independence.

Unicharm continually considers every moment of life. From birth to adulthood, and all the years in between.

From this generation to the next, and many years into the future.

We endeavor to realize a diverse, inclusive, and sustainable world, protecting and supporting life for people and society through "kindness" in various forms.

Baby care that supports and comforts both infants and families. Nursing care that helps people live a full life at any age. Environments that ensure our partner animals (pets) a warm welcome by the family and neighborhood.

Feminine care that helps lift spirits during the monthly cycle.

Good hygiene that helps enhance and expand pleasant interactions for everyone.

This is the kindness we at Unicharm have always valued.

As we create and extend such kindness, we must emphasize not only the well-being of individuals but also the well-being of society and our planet as a whole.

When we picture the manufacturing that sustains local economies, we imagine the faces of people at work and their families.

When we consider the dynamic switch to renewable energy, we visualize a future with reduced global warming.

At Unicharm, we strive for all of our business activities to reflect kindness, thereby contributing to a diverse, inclusive, and sustainable world for our future.

Unicharm continues to conduct business while championing the freedom of individuals to pursue their own way of life, based on our corporate philosophy of "NOLA & DOLA."*

In the decade to come, we at Unicharm will continue to affirm this ideal, providing kindness and support at every moment, throughout every lifetime.

• "NOLA & DOLA" (Necessity of Life with Activities & Dreams of Life with Activities) Our corporate philosophy: Unicharm aims to provide all people, from newborns to the elderly, with products and services that provide mental and physical support through gentle care so that they may be free of their burdens and can fulfill their dreams.

Publication of Integrated Report 2022

At Unicharm, our purpose is to contribute to the achievement of the SDGs. To that end, we will strive to help resolve the issues of the environment and society and help foster local communities through the sustainable growth of our business. With the aim of realizing these objectives, we formulated our medium- to long-term ESG goals, Kyo-sei Life Vision 2030, and our 11th Medium-Term Management Plan by backcasting to our purpose as the origin and have steadily pressed forward with these initiatives since January 2021.

Integrated Report 2022 is the result of our uncompromising efforts to provide readers with both financial and non-financial information on the details and progress of our two initiatives described above, including our value creation process, key strategies, and ESG information, in a detailed and

easy-to-understand manner. Moreover, the process for compiling the report and the contents thereof have been confirmed for their validity.

We hope the report helps provide shareholders, investors, and all other stakeholders with a better understanding of Unicharm's value creation story. The report will also be used as a valuable tool for engaging in and strengthening our dialogue with all stakeholders as well as for ensuring sustainable increases in our corporate value.

Kenji Ueda

Executive Officer and General Manager of ESG Division (Officer responsible for disclosure of integrated reports)

2	Unicharm Group Integrated Report 2022

Building Individual Capabilities

Contents

Unicharm's Vision	Foundation for Sustainable Growth
1	The Unicharm Way	56	Environmental Initiatives
2	The Future We Envision		57	Environmental Targets 2030
4	Message from the President & CEO		58	Climate Change (Disclosure Based on the TCFD Recommendations)
10	Unicharm's Growth Story	60	Social Initiatives
12	Unicharm's Business Expansion		60	Human Rights
14	Financial Highlights		61	Development of Workplace Environments
15	Non-Financial Highlights		62	Quality
16	Unicharm's Value Creation Model		63	Supply Chain Management
18	Value Creation Process for Realizing a Cohesive Society		64	Local Community
20	Unicharm's Multifaceted Approach to New Value Creation	65	Corporate Governance Initiatives
			65	Messages from Outside Directors
How Unicharm Works to Create a Cohesive Society		66	Directors and Executive Officers
24	Kyo-sei Life Vision 2030:		68	Corporate Governance
	For a Diverse, Inclusive, and Sustainable World		78	Compliance
28	Basic Management Policy		80	Risk Management

30 11th Medium-Term Management Plan

Improvement of Capabilities through Management with Resonance

32 Human resources

34 Contribution to Environmental Protection

through Our Business Activities

	Strengthening Our Ability to Safeguard the Well-Being of Our Planet
36	Marketing	Improving Our Networking Capabilities

38 Digital Transformation (DX)

	Reinforcing Organizational Capabilities and Additional Advantages
40	Production	Bolstering Our Monozukuri Capabilities

42 Research and Development and Intellectual Property

Reinforcing Organizational Capabilities

44 Financial Policy Strengthening Unicharm's Cash-Generating Capabilities

46 Review of Operations

48 Personal Care Business

48 Wellness Care Products

50 Feminine Care Products

52 Baby Care and Childcare Products

54 Partner Animal (Pet) Care Business

Data

1. Key Financial and Non-Financial Data for the Last 10 Years

1. Consolidated Statement of Financial Position

1. Consolidated Statement of Income /
   Consolidated Statement of Comprehensive Income
2. Consolidated Statement of Changes in Equity
3. Consolidated Statement of Cash Flows
4. Overview of the Unicharm Group

Editorial Policy

Information Disclosure System

In compiling Integrated Report 2022, we referred to guidelines such as the International Integrated Reporting Framework of the Value Reporting Foundation (VRF),* which was revised in January 2021.

We disclose our financial and non-financial data through the following channels.

• A new organization established through a merger between the International Integrated Reporting Council (IIRC), which released the International Integrated Reporting Framework, and the Sustainability Accounting Standards Board (SASB) in June 2021

Period and Scope of Coverage

Period of coverage: Fiscal 2021 (January 1, 2021 to December 31, 2021); however, the report also covers information on activities held prior to and after this period, in addition to future targets.

Scope of coverage: Primarily Unicharm Group companies (Unicharm Corporation and consolidated subsidiaries in Japan and overseas); however, the report also covers information on certain non-consolidated subsidiaries and affiliated companies. Moreover, in this report, "Unicharm" and "the Company" refer to the Unicharm Group.

Caution Regarding Forward-Looking Statements

In addition to factual information on our past and present performance and business activities, Integrated Report 2022 also includes forward-looking statements on Unicharm's strategies, plans, results, etc. These statements have been prepared based on information available as of the time of writing. Therefore, due to a variety of factors, our actual business performance and activity results may differ significantly from the information contained in this report.

Financial data	Non-financial data
Securities report	Sustainability Report
Financial results briefing materials	Corporate Governance Report
	Integrated Report

Explanation of the Cover

As a company that helps ensure the mental and physical well-being of each consumer, Unicharm aims to contribute to the realization of a cohesive society in which people of all ages can collectively live their lives in the way they so wish. In an effort to realize this objective, we support Paralym Art in their efforts to foster social participation and financial independence. Accordingly, we have adopted works done by artists with disabilities on the covers of our integrated and sustainability reports. Unicharm has supported the efforts of Paralym Art since 2016, and 2022 marks its seventh year in this engagement.

Title: Circle of Appreciation

Artist: takahashi

Unicharm Group Integrated Report 2022

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