Kao (4452) Q1 2025 earnings summary

Executive summary

• Fiscal 2025 is a foundation-building year for global growth, with a focus on profitability in stable earnings areas and reinvestment in growth segments.

• Achieved Q1 FY2025 sales and profits above plan, with operating margin up 2.0 points year-over-year, driven by volume growth and improved earning power.

• Net sales rose 6.6% year-over-year to 389.9 billion yen, with like-for-like growth of 6.0% driven by 1.6% volume and 4.4% price increases.

• Operating income increased 41.9% to 31.2 billion yen, and net income attributable to owners of the parent grew 38.7% to 22.9 billion yen.

• Growth was supported by strong performance in Japan, price adjustments, and high-value product launches, despite global economic uncertainty and rising raw material costs.

Financial highlights

• Net sales rose 6.6% year-over-year to 389.9 billion yen; like-for-like growth was 6.0%.

• Gross profit increased 8.0% to 148.0 billion yen; gross margin improved 0.5 points to 38.0%.

• Operating income reached 31.2 billion yen, up 41.9% year-over-year; operating margin improved to 8.0%.

• Net income attributable to owners was 22.8 billion yen, up 38.7% year-over-year; EPS up 38.9% to 49.19 yen.

• EBITDA increased 19.6% to 52.7 billion yen.

Outlook and guidance

• Full-year 2025 net sales forecast at 1,670 billion yen (+2.6% YoY), operating income at 160 billion yen (+9.1%), and net income attributable to owners at 116 billion yen (+7.9%).

• Full-year earnings forecast for fiscal 2025 is maintained despite U.S. tariff risks and global uncertainties.

• Impact of tariffs on operating income expected to be limited to 2.0 billion yen at most; mitigation measures in place.

• Raw material prices are expected to remain high, but offsetting measures and price adjustments are planned.

• K27 mid-term targets include ROIC of 11%+ and operating income of 211.7 billion yen by FY2027.