Kao Corp Ord (KAOCF) Q1 2025 Earnings Call

Investor webinar replay

Replay transcript excerpt

Today, I will explain in the order of the materials provided to you. First, please take a look at the key highlights on page 5. We have positioned fiscal 2025 as a year to build a solid foundation for global growth toward achieving K27. To that end, we will accelerate a budget cycle of steadily increasing profitability, primarily in our stable earnings area, and reinvesting the profit earned there into growth areas. In the first quarter, we steadily executed our basic strategy and made strong progress toward achieving the K27 target. We achieved both sales growth and an increase in operating margin. In cosmetics, we made a smooth start toward achieving the operating income target of 7 billion yen for fiscal 2025. In addition, we are making steady progress in building the foundation for global growth in UV care, which is a key to achieving K27 along with cosmetics. On the other hand, U.S. tariff policy is creating new risks. We expect the impact of tariffs on our business to be minor and are taking measures to minimize the impact. And we maintain our earnings forecast for fiscal 2025. Details will be provided later. Please turn to page 6. Net sales was up 6.6% to 389.9 billion yen. Excluding the impact of currency translation, net sales increased 6%. Gross margin improved 0.5 percentage points year-on-year to 38%. Operating income was 31.2 billion yen. The operating margin improved significantly to 8%. Net income attributable to owners of the parent was 22.8 billion yen, up 38.7% or 6.4 billion yen year-on-year. Earnings per share were 49.19 yen, a significant increase of 38.9% year-on-year. Please turn to page 7. Net sales and operating income are as shown here. What is particularly noteworthy here is that operating income for the first quarter exceeded 30 billion ye...