Kao releases consolidated financial results for the fiscal year ended December 31, 2021

In fiscal 2021, the novel coronavirus (COVID-19) continued for the second year to have a major impact on society, economies and people's lives worldwide. The Kao Group worked to respond to the changes in people's lifestyles, consumption and the structure of sales channels, as well as to hikes in raw material prices around the world and other issues, but its efforts were impacted by significantly delayed market recovery, particularly in Japan, where inbound demand disappeared and a state of emergency was repeatedly declared, among other factors. In the Kao Group's key markets, according to retail sales and consumer purchasing survey data, the household and personal care products market remained on par with the previous fiscal year. On the other hand, the cosmetics market remained on par with the previous fiscal year, but has not recovered to its pre-pandemic level.  
 
Amid these circumstances, the Kao Group's net sales increased 2.7% compared with the previous fiscal year to 1,418.8 billion yen. On a like-for-like basis, net sales increased 0.3%. Operating income was 143.5 billion yen, a decrease of 32.1 billion yen compared with the previous fiscal year, due in part to a strategic shift for future growth that involved recording a 4.5 billion yen impairment loss in the baby diaper business and a 2.5 billion yen loss on liquidation of inventory, and the operating margin was 10.1%. Income before income taxes was 150.0 billion yen, a decrease of 24.0 billion yen, and net income was 111.4 billion yen, a decrease of 16.7 billion yen.  
 
Basic earnings per share were 230.59 yen, a decrease of 31.70 yen, or 12.1%, from 262.29 yen in the previous fiscal year. Economic Value Added (EVA*), which Kao Group uses as a management indicator, decreased 17.1 billion yen compared with the previous fiscal year to 45.1 billion yen due to a decrease in net operating profit after tax (NOPAT). *EVA is a registered trademark of Stern Stewart & Co. 
 
In addition, the Kao Group Mid-term Plan "K25" was launched in fiscal 2021. This will be the foundation for growth to come. The Kao Group has newly declared that it will "save future lives" and aims to become a company that is essential for the protection of lives, lifestyles and ecosystems. 
 
In the Consumer Products Business, sales decreased 0.7% compared with the previous fiscal year to 1,143.7 billion yen. On a like-for-like basis, sales decreased 2.6%. During fiscal 2021, factors such as changes in consumer preferences and lifestyles, as well as in sales channels, had a major impact on the business environment in various ways due to the continued spread of COVID-19 for the second year. Under these conditions, the Kao Group proactively conducted initiatives including concentrating investment in core brands, promoting digital transformation and stepping up e-commerce. However, the business environment remained severe due to hikes in raw material prices around the world and disruption in logistics.  
 
As a result, sales in Japan decreased 5.3% to 768.1 billion yen. In Asia, sales increased 7.2% to 214.7 billion yen. On a like-for-like basis, sales increased 0.3%. In the Americas, sales increased 15.1% to 96.2 billion yen. On a like-for-like basis, sales increased 10.8%. In Europe, sales increased 14.5% to 64.6 billion yen. On a like-for-like basis, sales increased 5.9%.  
 
Operating income decreased 34.6 billion yen compared with the previous fiscal year to 112.6 billion yen.  
 
For the full report, click here.