Kao releases consolidated financial results for the fiscal year ended December 31, 2022

In fiscal 2022, the novel coronavirus (COVID-19) continued for another year to have a major impact on society, economies and people’s lives worldwide. A severe business environment persisted as a result of rising energy costs due to factors including the Russia-Ukraine crisis and changes in consumption triggered by global inflation, as well as other factors such as a slowdown in the Chinese market, which had been growing.
 
According to retail sales and consumer purchasing survey data, the Kao Group’s key markets—the household and personal care products market and the cosmetics market—grew compared with the previous fiscal year, although the cosmetics market has not recovered to the pre-pandemic level of 2019.
 
Amid these circumstances, the Kao Group worked hard to address the changes in people’s lifestyles, consumption and the structure of sales channels, as well as hikes in raw material prices around the world and other issues. Net sales increased 9.3% compared with the previous fiscal year to 1,551.1 billion yen. On a like-for-like basis, net sales increased 3.7%. Operating income was 110.1 billion yen, a decrease of 33.4 billion yen compared with the previous fiscal year, due to the substantial impact of hikes in raw material prices, and the operating margin was 7.1%. Income before income taxes was 115.8 billion yen, a decrease of 34.2 billion yen, and net income was 87.7 billion yen, a decrease of 23.7 billion yen.
 
In the Consumer Products Business, sales increased 4.3% compared with the previous fiscal year to 1,193.3 billion yen. On a like-for-like basis, sales decreased 0.2%. The market environment was extremely severe during fiscal 2022, with lockdowns and a cooling market in China, logistics disruptions in the United States, and a global shift in markets to low-priced products related to inflation, among other factors. However, the Kao Group proactively implemented initiatives including concentrating investment in core brands, promoting digital transformation and conducting strategic price increases. As a result, sales in Japan increased 0.9% to 775.0 billion yen. In Asia, sales increased 9.9% to 236.0 billion yen. On a like-for-like basis, sales decreased 3.6%. In the Americas, sales increased 17.4% to 112.9 billion yen. On a like-for-like basis, sales decreased 1.2%. In Europe, sales increased 7.4% to 69.4 billion yen. On a like-for-like basis, sales increased 0.5%. Operating income was 79.3 billion yen, a substantial decrease of 33.2 billion yen compared with the previous fiscal year, due to the impact of hikes in raw material prices and rising logistics costs, among other factors.
 
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