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CEO Message

Michitaka Sawada
President and Chief Executive Officer

We aim to become a company with a global presence through our emphasis on profitable growth and ESG initiatives.

I would like to thank you, our shareholders, for your exceptional understanding and support of the Kao Group's business and corporate activities.

During the six months ended June 30, 2019, the markets for household and personal care products and cosmetics in Japan, which are key markets for the Kao Group, were in solid condition according to retail sales and consumer purchasing survey data. In every product category, the share of the e-commerce channel increased further.

Under these circumstances, the Cosmetics Business performed strongly, the baby diapers are on a recovery track, and with the impact of selling price adjustments associated with a decline in prices for natural fats and oils in the Chemical Business, net sales decreased 1.0% compared with the same period a year earlier to 721.4 billion yen. On a like-for-like basis, net sales decreased 0.2%. Operating income was 86.4 billion yen, a decrease of 4.4 billion yen compared with the same period a year earlier. The interim dividend was 65 yen per share, an increase of 5 yen compared with the same period a year earlier. Despite the severe business environment, we will continue our efforts to achieve our forecast of consolidated operating results.

By 2030, the Kao Group intends to make Kao a company with a global presence and take it to the next level by achieving its goals: (1) a distinctive corporate image, (2) a high-profit global consumer goods company that exceeds 2.5 trillion yen in net sales (1.0 trillion yen outside Japan), a 17% operating margin and 20% ROE, and (3) a high level of returns to stakeholders.

As the social conditions and natural environment are changing dramatically, the Kao Group considers not only financial strategies but also non-financial strategies and initiatives to be one of its top management priorities, and developed and launched the "Kirei* Lifestyle Plan" in April 2019 as its ESG strategy, which realizes lifestyles that people desire. To help create the future that people worldwide envision, we will take an approach unique to the Kao Group in squarely confronting social issues raised by the Sustainable Development Goals (SDGs) and addressing matters, such as the strengthening of environmental laws and regulations and the ethical actions of consumers. The Kao Group will thoroughly instill the "Integrity" set forth in the Kao Way, the Group's corporate philosophy, by sharing and practicing it among all employees, while promoting both profitable growth and contributions to the sustainability of society.

I would appreciate your continued understanding and support of the Kao Group's business and corporate activities.

  • * The Japanese word “Kirei” describes something that is clean, well-ordered and beautiful, all at the same time. For Kao, this concept of Kirei not only describes appearance, but also attitude— to seek to create beauty for oneself, and also for other people and for the natural world around us.

August 2019

President and Chief Executive Officer
Kao Corporation

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