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Kao Reports Financial Results From Nine Months Ending December 31

Posted: January 30, 2012

Kao Corporation announced its consolidated business results for the nine months ending Dec. 31, 2011, the third quarter of the fiscal year ending March 31, 2012 for the company. Net sales increased 2.2% compared with the same period a year earlier to ¥934.8 billion, or approximately $12 million, and excluding the effect of currency translation, net sales would have been 3.8%. In the company's beauty care business sector, new products performed well outside of Japan.

The report also notes that during the time period, the pace of recovery slowed in North America and Europe, and in addition uncertainty about the outlook for the global economy grew due to financial turmoil in Europe. In the Japanese economy, there were signs of recovery in some sectors although conditions remained severe due to the effects of the March 11, 2011 earthquake, as well as deflation and the appreciation of the yen. The household and beauty product markets in Japan, key markets for Kao, remained unchanged on a value basis compared with the same period of the previous fiscal year, although consumer purchase prices fell with the purchasing behavior of budget-strapped consumers. The cosmetics market in Japan continued to contract due to a shift in consumer preference to lower-priced products.

Under these circumstances, the company made all-out efforts to carry out a stable supply of products after the earthquake as the mission of a manufacturer of daily necessities, and worked to launch and nurture products with high added value. The Kao Group also continued to focus on rebuilding its prestige cosmetics business in Japan and promoting cost-reduction activities.

Broken down by segment, the company's consumer business products segment increased sales 1% compared to 2010, for ¥772.7 billion. In Japan, sales increased 0.9% to ¥642.1 billion. Although sales were impacted by the earthquake, intensified market competition and deflation, the Kao Group took measures that included proposing environmentally conscious products, launching new products in response to changing consumer lifestyles, and enhancing proposal-based sales and in-store merchandising activities.

In Asia and Oceania, consumer products business sales increased 5.6% to ¥65.1 billion. Excluding the effects of currency translation, sales would have increased 10.6%. Although intense market competition continued, the company carried out aggressive measures, including collaborations with retailers and the introduction of new products amid continued market growth.