Kao Corporation · TSE:4452
Kao — Kao Corp Ord — Q1 2024 Earnings Presentation
27 slides from Kao's earnings presentation, May 9, 2024
Slide 1: Consolidated Financial Results for the Three Months Ended March 31, 2024
Consolidated Financial Results for the Three Months Ended March 31, 2024 Kao Corporation May 9, 2024
Slide 2: Disclaimer
Disclaimer Forward-looking statements such as earnings forecasts and other projections contained in this release are based on information available at this time and assumptions that management believes to be reasonable, and do not constitute guarantees of future performance. Actual results may diffe
Slide 3: Contents
Contents 01 Financial Results for the Three Months Ended March 31, 2024 02 Appendix
Slide 4: Financial Results for the Three Months Ended March 31, 2024
01 Financial Results for the Three Months Ended March 31, 2024
Slide 5: Key Highlights
Key Highlights • Achieved profits that exceeded plans, as K27 progressed smoothly ✓ Generated profits through structural reforms - Achieved profitability in sanitary products by reducing fixed costs for Merries baby diapers - Adjusted selling prices by promoting high-value-added products ✓ Improved
Slide 6: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results • The gross margin increased 4.4 pts and operating income increased 14.7 billion yen to 22.0 billion yen due to the effects of structural reforms (including adjusting selling prices by promoting high-value-added products). Billion yen FY2023 Q1 FY2024 Q1
Slide 7: Key Points of Results
Key Points of Results Net sales 365.8 billion yen Operating income 22.0 billion yen +0.4% on a like-for-like basis (+14.7 billion yen); margin 6.0% FY2024 Q1 Financial Results • The gross margin increased 4.4 pts and operating income increased 14.7 billion yen to 22.0 billion yen, with a substantial
Slide 8: Consolidated Net Sales by Segment/Geographic Region
Consolidated Net Sales by Segment/Geographic Region • Fabric and home care products continued to perform well in Japan due to effective investment in marketing for high-value- added products. Billion yen Japan Asia Americas Europe Consolidated Q1 66.5 10.9 0.9 - 78.4 Fabric & Home Care Like-for-like
Slide 9: Consolidated Results by Segment
Consolidated Results by Segment • The operating margin for fabric and home care products recovered, increasing 8.1 pts to 16.1%, and sanitary products achieved profitability. • The operating margin in the Chemical Business recovered, increasing 4.1 pts to 8.6% due to promotion of tertiary amines and
Slide 10: Analysis of Change in Operating Income in Q1 (Year-on-Year Change)
Analysis of Change in Operating Income in Q1 (Year-on-Year Change) ✓ Results exceeded plans. • The effects of structural reforms (including adjusting selling prices by promoting high-value-added products) made a substantial contribution in the Consumer Products Business. • Demand from industries tar
Slide 11: Generating Profits through Structural Reforms
Generating Profits through Structural Reforms • The gross margin improved 4.4 pts year on year. • The gross margin bottomed out in FY2023/Q1. The Kao Group now aims to upgrade structurally into a full-fledged profit generator due to the effects of structural reforms and promotion of growth strategie
Slide 12: Forecast of Factors in Operating Income (Year-on-Year Change)
Forecast of Factors in Operating Income (Year-on-Year Change) • The effects of structural reforms are projected to be more than 18.0 billion yen. • The Kao Group will adjust selling prices by continuing to promote high-value-added products while effectively deploying marketing expenses for growth. •
Slide 13: Raw Material Prices Outlook (Consumer Products Business)
Raw Material Prices Outlook (Consumer Products Business; vs. FY2023) • Expected increases in personnel and logistics costs, in addition to the weak yen and fluctuations in prices for crude oil and natural fats and oils. • Policy to offset cost increases and secure profits in ways such as setting sel
Slide 14: Ramping Up the Global Rollout of High-value-added Products: Skin Protection
Ramping Up the Global Rollout of High-value-added Products Skin Protection: Sales +30% Year on Year Full-fledged Deployment of Global Sharp Top Strategy. Expand and Grow in Each Area Europe China Americas UV Care UV Care UV Care Started rollout at Expanding shelves of core Launch of two new major wh
Slide 15: Ramping Up the Global Rollout of High-value-added Products: Cosmetics
Ramping Up the Global Rollout of High-value-added Products Cosmetics: Cultivating Brands to Become a True Global Player Generating New Competitiveness with Brand Value for Consumers in Each Area Japan Japan Japan ● +64% year on year ● No. 1 share of dry and sensitive ● No. 1 share of makeup market ・
Slide 16: Ramping Up the Global Rollout of High-value-added Products: Hair Care
Ramping Up the Global Rollout of High-value-added Products Sharp Top Digital Loyalty Marketing Creating Devoted Fans by Telling Brand Stories Using Real-World and Digital (DX) Methods Started transformation of hair care business Ramp up promotion of high-value-added products in into a growth driver
Slide 17: Key Highlights
Key Highlights • Achieved profits that exceeded plans, as K27 progressed smoothly ✓ Generated profits through structural reforms - Achieved profitability in sanitary products by reducing fixed costs for Merries baby diapers - Adjusted selling prices by promoting high-value-added products ✓ Improved
Slide 18: Upcoming Events (Planned)
Upcoming Events (Planned) • Briefing on DX Strategies Thursday, June 20, 2024 • Briefing on Strategies for the Hair Care Business Second half of 2024 18
Slide 19: Appendix
02 | Appendix
Slide 20: Consumer Products Market in Japan
Consumer Products Market in Japan 87 categories, SRI+1 26 categories, SLI2 Growth of H&PC Market Market growth rate in value terms Growth of Cosmetics Market Market growth rate in value terms (%) Continuing year-on-year growth from last year due to price increases and (%) Increases in all categories
Slide 21: Kao's Main Markets outside Japan
Kao’s Main Markets outside Japan • China : Results made a turnaround to a slight year-on-year increase amid gradual recovery in consumption. Asia • Indonesia : The market continued its growth trend due to rising product prices. • Thailand : The market continued its growth trend, although at a slower
Slide 22: Hygiene and Living Care Business in Q1
Hygiene and Living Care Business in Q1 • Sales: 119.4 billion yen (+2.6%) Operating income: 13.1 billion yen (+10.5 billion yen) Operating margin: 11.0% • Continued to increase sales and market share by improving the brand power of core brands Attack and CuCute through effective deployment of market
Slide 23: Health and Beauty Care Business in Q1
Health and Beauty Care Business in Q1 • Sales: 94.8 billion yen (+2.9%) Operating income: 6.6 billion yen (+0.8 billion yen) Operating margin: 7.0% • New high-value-added Bioré products sold strongly due to effective deployment of marketing expenses. • Ramped up rollout of UV care products outside J
Slide 24: Life Care Business in Q1
Life Care Business in Q1 • Sales: 12.4 billion yen (-6.1%) Operating income: -0.3 billion yen ( +0.3 billion yen) Operating margin: -2.7% • Sales of commercial-use hygiene products decreased due to the impact of shrinkage of the market for sanitizers. Decrease in sales in Japan and nearly flat in th
Slide 25: Cosmetics Business in Q1
Cosmetics Business in Q1 • Sales: 54.6 billion yen (+2.0%) Operating income: -4.7 billion yen (-0.1 billion yen) Operating margin: -8.5% • Sales were strong in Asia (excluding China) and Europe, and firm in Japan, offsetting the slump in China. • Profits were affected by the decline in China. Net sa
Slide 26: Chemical Business in Q1
Chemical Business in Q1 • Sales: 94.5 billion yen (-5.8%) Operating income: 8.1 billion yen (+4.0 billion yen) Operating margin: 8.6% • Profits increased due to improved profit margins, mainly for oleo chemicals, and the contribution from sectors that grew by capturing recovering demand. Customer de
Slide 27: KAO
KAO Kirei-Making Life Beautiful