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Presentation materials on financial results4452Kao CorporationMaterials and Chemicals

Overview of Consolidated Financial Results for the Second Quarter (Interim Period) of the Fiscal Year Ending December 2026

In the first half of the fiscal year ending December 2026, both net sales and operating income exceeded the year-earlier period. Operating income reached a record high of ¥95.8 billion. In light of the strong first-half performance, the full-year 2026 operating income forecast was raised from ¥182.0 billion to ¥190.0 billion.

Worth reading
79Important
0–100. This measures how worthwhile something is to read, not how good or bad the company is.
Direction
Improvement
Direction inferred from the company’s description.
Scale
266
¥100 million (year-on-year change in first-half operating income)
Wording
Avoiding a definitive answer
How definitive the wording is.

Contents of this document

Presentation materials on financial resultsSecond quarter (interim period) of the fiscal year ending December 202613 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales8,719 Hundred millions of yen+7.8%
Operating profit958 Hundred millions of yen+38.5%
Net income662 Hundred millions of yen+33.9%
Operating profit margin11.0%, up 2.4 percentage points year on year
Results for the three months of the current quarter
Net Sales¥458.7 billion, up 9.4% year on year
Gross profit¥188.5 billion, up 15.1% year on year
Operating profit¥50.9 billion, up 33.0% year on year
Pretax profit¥51.3 billion, up 27.7% year on year
Profit for the period¥34.9 billion, up 32.0% year on year
Full-year earnings forecast
Net Sales¥1.800 trillion
Operating profit¥190 billion
Pretax profit¥193.0 billion in the company's distribution volume
Profit attributable to owners of the parent¥135.0 billion
EBITDA¥278.0 billion
ROE12.3%
Basic earnings per share¥149.21
Dividend per share¥156
What the company explained in this material
Self-assessment against the planThe company's self-assessment against its own plan.
Progress is on track toward achieving the K27 targets. The turnaround of underperforming businesses is proceeding as planned.
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
  • Earning powerApproximately ¥10.0 billion (first-half results)
  • TCR effects, product mix and higher logistics costs¥2.0 billion, ¥3.0 billion and -¥0.5 billion
  • Chemicals cost of sales and gross profitApproximately ¥8.5 billion
  • Change in SG&A expensesApproximately -¥11.5 billion (as shown, including gains on land sales and other items)
  • Gain on sale of land¥11.5 billion
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
  • Assumed exchange rates: US$1 = ¥157, €1 = ¥182 and CNY1 = ¥22.8
  • Raw material procurement prices affect earnings 2–3 months later due to the lag between production and sales.
  • Business targets for the semiconductor-related business: sales CAGR of more than 30% and operating margin of more than 40%
New initiatives
  • Sofina's entry into the self-skincare category and the launch of Sofina BASIC+
  • est Genoluxe Cream, scheduled for launch on 4 September 2026
  • Accelerating new customer adoption and sales expansion in semiconductor-related products
  • Separation of the logistics division, appointment of a CLO and launch of the joint-delivery consortium CODE
  • Shareholder benefits for shareholders as of the end of December 2026
Key KPIsA metric the company considers important as a management benchmark.
  • ROIC10.5%
    Year on year against the same period last year+2.5 percentage points
  • Group gross profit margin39.8%
    Year on year against the same period last year+1.3 percentage points
  • GC business gross profit margin index100.2 (first half of 2019 = 100)
    Year on year against the same period last year+1.5 percentage points
  • Kao share (toiletries)25.0%
    Year on year against the same period last year+0.4 percentage points
  • Sales growth of 6 priority brands+13%、+27%、+14%、+4%
  • Electronic materials sales growth+18%
Unit price and quantity metricsThese figures show sales broken down by price and volume.
Year-on-year changes in volumes and prices are disclosed by segment. Total first-half volume and other effects were +1.3%, and prices were +2.1%; total second-quarter volume and other effects were +0.9%, and prices were +3.3%.
Segment results
  • GC business
    Net Sales¥649.5 billion, up 4.1% year on year on a like-for-like basis
    Operating profit¥65.7 billion, up ¥11.1 billion year on year
  • Chemicals Business
    Net Sales¥247.2 billion, up 1.8% year on year on a like-for-like basis
    Operating profit¥18.1 billion, up ¥3.7 billion year on year
  • Fabric & Home Care
    Net Sales¥189.0 billion, up 5.1% year on year on a like-for-like basis
    Operating profit¥34.7 billion, up ¥3.5 billion year on year
  • Sanitary
    Net Sales¥81.7 billion, down 1.3% year on year on a like-for-like basis
    Operating profit¥4.4 billion, up ¥0.1 billion year on year
  • Health & Beauty Care
    Net Sales¥228.6 billion, up 3.6% year on year on a like-for-like basis
    Operating profit¥19.9 billion, up ¥1.7 billion year on year
  • Cosmetics
    Net Sales¥131.0 billion, up 6.7% year on year on a like-for-like basis
    Operating profit¥5.8 billion, up ¥5.4 billion year on year
  • Business Connected
    Net Sales¥19.2 billion, up 6.2% year on year on a like-for-like basis
    Operating profit¥0.8 billion, up ¥0.4 billion year on year
Medium-term management plan targets
PlanK27
Target fiscal year2027
ROIC11% or higher
EVA¥70 billion or more
Overseas revenueAt least ¥800.0 billion
Operating profitExceed the record-high operating income of ¥211.7 billion achieved in 2019
Comparison with actual resultsThe revised 2026 forecast is ROIC of 10.5%, EVA of ¥50.0 billion, overseas sales of ¥800.0 billion and operating income of ¥190.0 billion.
Financial targets
ROIC2026 revised forecast: 10.5%; 2027 target: at least 11%
ROE2026 revised forecast: 12.3%
EVA2026 revised forecast: ¥50.0 billion; 2027 target: at least ¥70.0 billion
Market Size / Share
  • Self-skincare market: ¥956.0 billion
  • Front-end semiconductor materials market: ¥6.1 trillion; Kao has the leading market share
  • Back-end semiconductor materials market: ¥1.6 trillion; Kao share: 60%
  • Hard disk-related market: ¥8–10 billion; Kao share: 50%
  • Kao share of the toiletries market: 25.0%
Annual Dividend
¥156 (interim and year-end breakdown: Not disclosed)
Acquisition of treasury shares
The policy is to conduct share buybacks flexibly, but the amount, number of shares and period of the acquisition program are not disclosed
Gross profit
¥347.2 billion, gross profit margin 39.8%, up 1.3 percentage points year on year
Contents of this document
ItemDetails
Document typePresentation materials on financial results
Fiscal Period CoveredSecond quarter (interim period) of the fiscal year ending December 2026
Net Sales8,719 Hundred millions of yen (YoY +7.8%)
Operating profit958 Hundred millions of yen (YoY +38.5%)
Net income662 Hundred millions of yen (YoY +33.9%)
Gross profit¥347.2 billion, gross profit margin 39.8%, up 1.3 percentage points year on year
Operating profit margin11.0%, up 2.4 percentage points year on year
Results for the three months of the current quarterNet Sales ¥458.7 billion, up 9.4% year on year / Gross profit ¥188.5 billion, up 15.1% year on year / Operating profit ¥50.9 billion, up 33.0% year on year / Pretax profit ¥51.3 billion, up 27.7% year on year / Profit for the period ¥34.9 billion, up 32.0% year on year
Full-year earnings forecastNet Sales ¥1.800 trillion / Operating profit ¥190 billion / Pretax profit ¥193.0 billion in the company's distribution volume / Profit attributable to owners of the parent ¥135.0 billion / EBITDA ¥278.0 billion / ROE 12.3% / Basic earnings per share ¥149.21 / Dividend per share ¥156
Self-assessment against the planProgress is on track toward achieving the K27 targets. The turnaround of underperforming businesses is proceeding as planned.
Segment resultsSegment GC business / Net Sales ¥649.5 billion, up 4.1% year on year on a like-for-like basis / Operating profit ¥65.7 billion, up ¥11.1 billion year on year, Segment Chemicals Business / Net Sales ¥247.2 billion, up 1.8% year on year on a like-for-like basis / Operating profit ¥18.1 billion, up ¥3.7 billion year on year, Segment Fabric & Home Care / Net Sales ¥189.0 billion, up 5.1% year on year on a like-for-like basis / Operating profit ¥34.7 billion, up ¥3.5 billion year on year, Segment Sanitary / Net Sales ¥81.7 billion, down 1.3% year on year on a like-for-like basis / Operating profit ¥4.4 billion, up ¥0.1 billion year on year, Segment Health & Beauty Care / Net Sales ¥228.6 billion, up 3.6% year on year on a like-for-like basis / Operating profit ¥19.9 billion, up ¥1.7 billion year on year, Segment Cosmetics / Net Sales ¥131.0 billion, up 6.7% year on year on a like-for-like basis / Operating profit ¥5.8 billion, up ¥5.4 billion year on year, Segment Business Connected / Net Sales ¥19.2 billion, up 6.2% year on year on a like-for-like basis / Operating profit ¥0.8 billion, up ¥0.4 billion year on year
Breakdown of Factors Affecting the ChangeFactors Earning power / Amount Approximately ¥10.0 billion (first-half results), Factors TCR effects, product mix and higher logistics costs / Amount ¥2.0 billion, ¥3.0 billion and -¥0.5 billion, Factors Chemicals cost of sales and gross profit / Amount Approximately ¥8.5 billion, Factors Change in SG&A expenses / Amount Approximately -¥11.5 billion (as shown, including gains on land sales and other items), Factors Gain on sale of land / Amount ¥11.5 billion
Key KPIsIndicator ROIC / Value 10.5% / Year on year against the same period last year +2.5 percentage points, Indicator Group gross profit margin / Value 39.8% / Year on year against the same period last year +1.3 percentage points, Indicator GC business gross profit margin index / Value 100.2 (first half of 2019 = 100) / Year on year against the same period last year +1.5 percentage points, Indicator Kao share (toiletries) / Value 25.0% / Year on year against the same period last year +0.4 percentage points, Indicator Sales growth of 6 priority brands / Value +13%、+27%、+14%、+4% / Year on year against the same period last year Not disclosed, Indicator Electronic materials sales growth / Value +18% / Year on year against the same period last year Not disclosed
Unit price and quantity metricsYear-on-year changes in volumes and prices are disclosed by segment. Total first-half volume and other effects were +1.3%, and prices were +2.1%; total second-quarter volume and other effects were +0.9%, and prices were +3.3%.
Assumptions Underlying the Business OutlookAssumed exchange rates: US$1 = ¥157, €1 = ¥182 and CNY1 = ¥22.8, Raw material procurement prices affect earnings 2–3 months later due to the lag between production and sales., Business targets for the semiconductor-related business: sales CAGR of more than 30% and operating margin of more than 40%
Medium-term management plan targetsPlan K27 / Target fiscal year 2027 / ROIC 11% or higher / EVA ¥70 billion or more / Overseas revenue At least ¥800.0 billion / Operating profit Exceed the record-high operating income of ¥211.7 billion achieved in 2019 / Comparison with actual results The revised 2026 forecast is ROIC of 10.5%, EVA of ¥50.0 billion, overseas sales of ¥800.0 billion and operating income of ¥190.0 billion.
Financial targetsROIC 2026 revised forecast: 10.5%; 2027 target: at least 11% / ROE 2026 revised forecast: 12.3% / EVA 2026 revised forecast: ¥50.0 billion; 2027 target: at least ¥70.0 billion
Annual Dividend¥156 (interim and year-end breakdown: Not disclosed)
Acquisition of treasury sharesThe policy is to conduct share buybacks flexibly, but the amount, number of shares and period of the acquisition program are not disclosed
Market Size / ShareSelf-skincare market: ¥956.0 billion, Front-end semiconductor materials market: ¥6.1 trillion; Kao has the leading market share, Back-end semiconductor materials market: ¥1.6 trillion; Kao share: 60%, Hard disk-related market: ¥8–10 billion; Kao share: 50%, Kao share of the toiletries market: 25.0%
New initiativesSofina's entry into the self-skincare category and the launch of Sofina BASIC+, est Genoluxe Cream, scheduled for launch on 4 September 2026, Accelerating new customer adoption and sales expansion in semiconductor-related products, Separation of the logistics division, appointment of a CLO and launch of the joint-delivery consortium CODE, Shareholder benefits for shareholders as of the end of December 2026
Items this document does not state (10)
Ordinary incomeSelling, general and administrative expensesProgress against full-year forecastNumber of stores and locationsNumber of employeesRisk amount incorporated into the outlookPayout ratioCapital expendituresOrders received and order backlogKey points of the Q&A

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

Gross profit improved due to premiumization, TCR, product mix, selling price revisions, higher volumes, demand capture and growth in priority overseas businesses. The upward revision to the full-year forecast incorporates the first half exceeding plan, as well as the pass-through of higher raw material costs and premiumization. At the same time, it factors in higher raw material costs, restructuring expenses for underperforming overseas businesses and risks related to the situation in the Middle East.

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Corrections happenIf the company reissues this disclosure, the page is rebuilt from the corrected version and the revision number moves up.
Overview of Consolidated Financial Results for the Second Quarter (Interim Period) of the Fiscal Year Ending December 2026 | Kao Corporation (4452) timely disclosure | Komori