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CEO Message

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Michitaka Sawada
President and Chief Executive Officer

Transforming ourselves to drive change, we will generate significant growth through our distinctive ESG activities, "Kirei*1 Actions."

I would like to thank you, our shareholders, for your exceptional understanding and support of the Kao Group's business and corporate activities. I would also like to offer my condolences to those who have lost loved ones due to COVID-19 and the disasters caused by heavy rainfall and disasters around the world, and extend my deepest sympathies to all who have fallen ill or suffered damage.

The COVID-19 pandemic continues to have a major impact on people's lives and corporate activities, with no signs of subsiding. In the Kao Group's key markets during the six months ended June 30, 2020, according to retail sales and consumer purchasing survey data, the cosmetics market in Japan shrank significantly from the previous year due to the impact of factors including a substantial decline in inbound demand and people's voluntary restraint in going outside, while the household and personal care products market grew as a result of increased demand for hygiene-related products.

Under these circumstances, the Kao Group's net sales decreased 7.5% compared with the same period a year earlier to 667.2 billion yen. On a like-for-like*2 basis, net sales decreased 4.3%. Operating income was 74.5 billion yen, a decrease of 11.9 billion yen compared with the same period a year earlier. The uncertain business environment is expected to continue in the third quarter and thereafter. The Kao Group will thoroughly implement every possible measure and a review of expenses, but we have determined that it will be difficult to achieve the operating results forecast announced on April 27, 2020. Therefore, we have revised our forecast of consolidated operating results for the fiscal year ending December 31, 2020 to 1,430.0 billion yen in net sales (the previous forecast was between 1,510.0 billion yen and 1,530.0 billion yen) and 190.0 billion yen in operating income (previously between 220.0 billion yen and 230.0 billion yen). We have not revised the forecast for our interim dividend, which calls for an increase of 5 yen per share compared with the same period a year earlier to 70 yen per share.

Amid drastic changes in social conditions, the natural environment and people's lifestyles, the Kao Group considers its strategies and initiatives for not only financial, but also for non-financial matters to be a key management issue. In 2019, we announced the "Kirei Lifestyle Plan" as an ESG strategy that helps people achieve the lifestyles they seek. It has been developed to serve people's needs and desires to live more sustainable lifestyles. The Kao Group will implement the innovation-driven "Kirei Lifestyle Plan" with the aim of making a greater contribution to society. While sharing a commitment to and by practicing Integrity, which is one of the core values of the Kao Way, our corporate philosophy, all employees of the Kao Group will work to achieve profitable growth while contributing to the sustainability of the world.

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

  • * 1 The Japanese word "kirei" means beautiful or clean, not only on the outside but also on the inside. At Kao, Kirei is the value we want to bring to everyday life with our brands, products and services – now and in the future.
  • * 2 Like-for-like growth excludes changes due to the method of recognizing sales and the effect of translation of local currencies into Japanese yen.

August 2020

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President and Chief Executive Officer
Kao Corporation

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