Kao profits lift in 2017 on increased Japanese tourism

The Japanese cosmetics group announced on Thursday that company sales increased more than 2% in 2017, while net profit gained 16%, on the back of last year's tourist influx in Japan and strong sales across Asia.  The maker of supplements and health products looks to continue strong growth in 2018. 

From January to December, company net profit lifted to 147 billion yen (1.08 billion euros). Operating profit rose 10.4% to 204.8 billion yen, "a record number for the fifth consecutive year," said the group in a statement.  

Total revenues reached 1,489.4 million yen (11 million euros), for a 2.2% increase on last year (+5.6% on constant exchange rates).

Kao recorded strong sales in Japan, noting solid online growth and increases in tourist retail sales. The company said 60% of sales took place in its native Japan during the period, while international sales saw a good response, with Asia up 7%, and the Americas region up +5.5%.  

Kao's beauty segment remains its most important. The vertical saw sales decline 2.6% to 586 billion yen (+2.1 on comparable terms). But here, the group saw an improvement in margins with the operating result of the segment progressing 6.5%, to 57.6 billion yen. Up close, cosmetic sales, while down in Japan, increased in Asia by more than 20% after currency exchanges, as well as in the Americas and Europe (+7% and 6.2%).

Overall, cosmetic sales fell 4.8% to 243 billion yen, succumbing to unfavourable exchange rates (+2.1% in comparable sales terms). Skincare and haircare products recorded a 1% drop to 343 billion yen (+2.1% in comparable sales).

This year, Kao wants to do even better despite rising raw material costs. The company is eyeing a net income of 152 billion yen (+ 3.4%), an operating profit of 215 billion yen (+ 5%) and revenues of 1.540 billion yen (+ 3.4%). 

It is aiming for 2.3% growth in comparable cosmetic sales to nearly 274 billion yen, while skin and haircare comparable could reach nearly 274 billion yen, up 7.1%  

Avec AFP