Kao Reports Financial Results for 2012

Kao Corporation announced its consolidated business results for the fiscal year ended December 31, 2012. Net sales increased 0.4% compared with restated FY2011 to ¥1,012.6 billion. Excluding the effect of currency translation, net sales would have increased 1.1%.

In the company’s consumer products business, sales rose 1.7% to ¥833.2 billion compared with restated FY2011, reflecting the contribution from its human health care business and the fabric and home care business. In Japan, sales increased 1.7% to ¥653.1 billion. In this market, Kao dealt with intensified market competition by taking measures including launching new products in response to changing consumer lifestyles and enhancing proposal-based sales and in-store merchandising activities. In Asia, sales increased 7% to ¥87.2 billion, and excluding currency translation, sales would have increased 7.8%. In the Americas, sales increased 2.7% to ¥56.6 billion (+2.1% without currency translation), and in Europe, sales decreased 6.9% to ¥57.3 billion, but without currency translation, would have decreased 1.8%.

Specifically for the company’s beauty care division, Kao recorded net sales of ¥444.4 billion for 2012, and excluding the effect of currency translation, sales would have increased 0.5%. Sales of prestige cosmetics, which consist of self-selection and counseling cosmetics, increased 0.1% compared with restated FY2011 to ¥205.4 billion (an increase of 0.2% excluding currency translation). In Japan, amid a continuing shift toward lower-priced products in the cosmetics market, Kao worked to reinforce focal brands, and increased sales of counseling brands Sofina Permavista base makeup, Aube Couture makeup and Coffret d’Or makeup, as well as self-selection brand Kate makeup. Sales outside of Japan decreased compared with restated FY2011 with the impact of concerns about economic slowdown.

In premium skin care products, sales in Japan increased, reflecting the steady performance of Biore facial cleanser, Biore U body cleanser and Curel derma care products. In Asia, Biore performed strongly with the effect of product improvements, and in the Americas, sales of Jergens hand and body lotions increased.

Sales of premium hair care products in Japan decreased compared with restated FY2011 due to intensified competition for shampoos and conditioners and contraction of the market for styling and hair color products. In Asia, there were increase sales of Liese foam hair color in Taiwan, Hong Kong and Malaysia, and Essential hair care products in Taiwan and Hong Kong. In the Americas and Europe, sales of John Freida foam hair color increased.

Overall for Kao’s beauty care segment, operating income increased ¥4.8 billion compared with restated FY2011 to ¥21.8 billion due to ongoing efforts to rebuild the prestige cosmetics business in Japan and other factors. Operating income before amortization of goodwill and other items related to acquisitions (EBITA) increased ¥3.2 billion compared with restated FY2011 to ¥45.9 billion, which is equivalent to 10.3% of sales.

Find more information on this 2012 financial report from Kao here.

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