Kao Corp Ord (KAOCF) Q1 2026 Earnings Call

Investor webinar replay

Replay transcript excerpt

We would like to start with page 4, key highlights. 2026 will be a year in which we further enhance our sustainable earning power and accelerate our transition to growth. We will increase the likelihood of achieving the K-27 while building the foundation for the step-change growth that lies beyond. In the first quarter, centered on the GC business, our profit-generating capabilities became firmly established both domestically and internationally, enabling us to further strengthen our earnings base. Net sales was 413.2 billion yen, up 2.5% on a like-for-like base, excluding the foreign exchange effects. Operating income was 44.9 billion yen, with an operating margin of 10.9%, up 14 billion yen year-on-year, and a significant improvement of 3.0% points. As a first step toward optimizing our logistics operations, we sold land and recorded the gain of 11.5 billion yen. However, even excluding this, we secured a steady profit growth, and we view this as improvement in organic growth. ROIC was a 10.1% and improvement of the 2.6 percentage point year on year. And the result are ROIC focused management are steadily becoming apparent. In the overseas GC business, sales increased in key focus areas such as cosmetics in Asia and health and beauty care in the Americas. And the growth model is taking solid shape. From the second quarter, we will strive to accelerate the growth and expand the profit contribution to our focused businesses, while advancing the sections and concentration of our overseas business to face challenges expeditiously. Although we are currently seeing the changes in the external environment, we are mitigating the impact through agile management that leverages the cow's integrated operations from upstream to downstream, including the chemicals business, and ...