Kao Corporation (KAOCF) Q2 2023 Earnings Call Transcript

Kao Corporation (OTCPK:KAOCF) Q2 2023 Earnings Conference Call August 3, 2023 4:00 AM ET

Company Participants

Masakazu Negoro – Senior Managing Executive Officer, Responsible for Management Finance

Yoshihiro Hasebe – Representative Director, President and Chief Executive Officer

Masakazu Negoro

Let me explain the first and second items of today’s content, which will be followed by President Hasebe’s presentation on the progress of our midterm plan K25. Since today’s presentation materials are lengthy with 65 pages, I will spend about 20 minutes focusing on the key points. Please refer to Page 5 of the presentation material. First of all, we have decided to revise the full year operating results forecast announced on May 10. In order to improve earnings and strengthen business foundation in the midterm, we are undertaking structural reforms this year. We will be posting approximately JPY 60 billion in expenses. The contents of the reform are centered on the 3 measures listed here. I will explain this in the latter section. By the way, we will refer to the profit, excluding the structural reforms as core income from here on to facilitate comparison with the previous year. Please turn to Page 8. Highlights of consolidated financial results. Net sales grew 0.6% to JPY 738.5 billion. In real terms, excluding exchange rates, net sales decreased by 2.3%. Core operating income was JPY 34.5 billion, down 35.8% year-on-year. Core operating margin was 4.7%. The difference of JPY 8.6 billion between core operating income and operating income is the restructuring charges. Core net income attributable to owners of the parent was JPY 26.3 billion, a decrease of 32.3% year-on-year. Core earnings per share was JPY 56.63. The interim dividend will be as planned JPY 75 per share. Please turn to Page 9 next.

Key points of first half results. As shown here, sales

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