The novel coronavirus (COVID-19) pandemic continued to have an impact on social and economic activities and the lives of people around the world. Even as more people were being vaccinated in countries around the world, the number of infections continue to fluctuate, and the business environment remained unclear. During the period from January to June 2021, the household and personal care products market in Japan, which is the Kao Group's key market, shrank compared with the same period a year earlier, reflecting the absence of the increase in demand, mainly for hygiene-related products, that arose in the previous year due to the pandemic, but grew compared with the same period two years before. On the other hand, the cosmetics market shrank compared with the same period a year earlier and has not recovered due to the substantial impact of factors including the declaration of a state of emergency, which continued in various regions.
Amid these circumstances, net sales increased 1.2% compared with the same period a year ealier to 675.2 billion yen. On a like-for-like basis, net sales decreased 0.6%. Operating income was 70.6 billion yen, a decrease of 3.9 billion yen compared with the same period a year earlier, and income before income taxes was 74.1 billion yen, an increase of 0.4 billion yen. Net income was 53.5 billion yen, an increase of 1.9 billion yen.
In the Consumer Products Business, sales decreased 1.2% compared with the same period a year earlier to 544.2 billion yen. On a like-for-like basis, sales decreased 2.7%. In the first half of the fiscal year, the business environment remained severe due to a rise in raw material prices, in addition to the impact of the pandemic. Amid the impact of the absence of the special demand, mainly for hygiene-related products, that arose in the previous year, the Kao Group concentrated investment on core brands, promoted digital transformation to address new lifestyles and stepped up e-commerce, among other initiatives. Second-quarter results improved compared with the first quarter due to factors including a proactive rollout of marketing measures, continued strong performance in China, and the recovery of target markets in the Americas and Europe.
In the Americas, sales increased 10.7% to 47.0 billion yen. On a like-for-like basis, sales increased 9.5%. In Europe, sales increased 18.3% to 28.1 billion yen. On a like-for-like basis, sales increased 8.2%.
Operating income decreased 7.3 billion yen compared with the same period a year earlier to 53.4 billion yen.
Although the business environment is expected to remain uncertain due to factors including the COVID-19 pandemic and concerns about rising raw material prices, the Kao Group aims to achieve the figures announced in its forecast by steadily implementing the strategies of the Kao Group Mid-term plan 2025 "K25" covering the five years starting this fiscal year. Therefore, there is no change from the forecast of consolidated results announced on May 7, 2021.
For the full report, cklick here.