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Management Strategy and Mid-term Plan 2027 (K27)
As announced in August 2023, we revised our Mid-term Plan 2027 (K27) with a focus on structural reforms and growth strategies. We will carry out structural reforms in businesses and human capital and enhance profitability through strategic price increases and earning power reforms. We also seek to introduce ROIC by business based on EVA to improve investment efficiency. With the aim of becoming a company that sustains Global Sharp Top businesses, we will carry out appropriate portfolio management actions and swiftly execute strategic investments, M&A, and reorganization.
K27 Vision
Protecting Future Lives
Sustainability as the only path
K27 Basic Policy
- Become an essential company in a sustainable world
- Transform to build robust business through investment
- Maximize the power and potential of employees
Introduce ROIC company-wide, decisively implement structural reforms, and aim to be a company that sustains Global Sharp Top* businesses.
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* Global Sharp Top: Contribute as global No.1 with leading-edge solutions that address the critical needs of customers.
K27 Target
| FY2027 target | |
|---|---|
| ROIC | Over 11% |
| EVA | Over 70.0 billion yen |
| Operating income*1 | Record-high for operating income (211.7 billion yen in FY2019) |
| Net sales outside Japan*2 | Over 800.0 billion yen (CAGR + 4.3% in net sales) |
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* 1 FY2023 results indicate core operating income
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* 2 Net sales outside Japan represents net sales based on distributor location
Four Strategies for Achieving the Mid-term Plan 2027 (K27)
Build Global Sharp Top Businesses
We are promoting a global shift toward essential and highly profitable businesses. In 2023, we paved the way towards global expansion for our skin protection business by selling Bioré UV care products in Europe and Brazil, and acquiring Bondi Sands Australia Pty Ltd, a leader in the self-tanning and sun car e fields. In the Fabric and Home Care Business, we have launched new products with strong potential for global expansion and we have strengthened the rollout of the ORIBE brand and other products for hair salons in the Americas and Europe. We have also rolled out products from all categories on the DtoC site “My Kao Mall.” Going forward, we will further accelerate the rollout of UV care products outside Japan, introduce high-value-added sheet-type products and new products in the Hair Care Business and continue to ramp up the global rollout of one-of-a-kind eco-chemical technologies.
Global Sharp Top Human Capital/Organizational Management
We are nurturing and acquiring human capital to support Global Sharp Top businesses while driving reforms in organizational management. With a priority on aggressive investments in human capital centered on dialogue, we will provide a setting for self-improvement and jointly learning with others, delegation of authority, fair and transparent evaluation, compensation and benefits, as well as optimal job assignment. In addition, we will utilize task-based team formation independent of departments to shift toward structures that take swift action as we withdraw from matrix management.
Improve Capital Efficiency/Profitability
We have maximized the value of our management capital by expanding our highly profitable businesses including Attack and Bioré, improving profit through strategic price increases and structural reforms, and revising our business portfolio. These initiatives have a sustainable and long-term impact on our business results and financial performance. Going forward, we will continue to execute disciplined portfolio management, promote high value-added products with a focus on profit and further reform our earning power.
Build Businesses Through Co-creation with Partners
We are co-creating with external partners to build businesses thereby accelerating the maximization of technology assets in the Kao Group.