Consolidated Financial Results for the Three Months Ended March 31, 2026 [IFRS Accounting Standards]
May 12, 2026
Company name: Kao Corporation Tokyo Stock Exchange in Japan Stock code: 4452 (URL: https://www.kao.com/global/en/investor-relations/library/results/) Representative: Yoshihiro Hasebe, President and CEO
Contact person: Yoshimasa Minegishi, Vice President, Financial Controllers, Global
Telephone: +81-3-3660-7111
Scheduled commencement date for dividend payments: -Preparation of supplementary material on financial results: Yes
Financial results information meeting: Yes (for institutional investors and analysts)
(Amounts less than one million yen are rounded)
-
Consolidated financial results for the three months ended March 31, 2026 (from January 1, 2026 to March 31, 2026)
-
Consolidated operating results (Percentages indicate year-on-year changes)
Net sales
Operating income
Income before income taxes
Net income
Three months ended
Millions of yen
％
Millions of yen
％
Millions of yen
％
Millions of yen
％
March 31, 2026
March 31, 2025
413,224
389,857
6.0
6.6
44,903
30,899
45.3
-
45,980
31,574
45.6
27.5
31,312
23,005
36.1
32.8
Net income attributable to owners of the parent
Comprehensive income
Basic earnings per share
Diluted earnings per share
Three months ended March 31, 2026
March 31, 2025
Millions of yen
30,999
22,850
％
35.7
38.7
Millions of yen
43,812
(4,557)
％
-
-
Yen
68.53
49.19
Yen
-
-
Note: Due to early adoption of IFRS 18 "Presentation and Disclosure in Financial Statements" (hereafter, "IFRS 18") in the three months ended March 31, 2026, operating income for the three months ended March 31, 2025, is presented as a retrospectively adjusted figure reflecting the change in accounting policy, and year-on-year change for the same period is not presented due to this retrospective adjustment.
-
Consolidated financial position
Total assets
Total equity
Equity attributable to owners of the parent
Ratio of equity attributable to owners
of the parent to total assets
Equity attributable to owners of the
parent per share
As of
March 31, 2026
December 31, 2025
Millions of yen
1,831,159
1,875,054
Millions of yen
1,103,069
1,094,700
Millions of yen
1,072,464
1,064,077
％
58.6
56.7
Yen
2,371.02
2,352.49
-
Consolidated operating results (Percentages indicate year-on-year changes)
-
Dividends
Annual cash dividends per share
1st quarter end
2nd quarter end
3rd quarter end
Fiscal year end
Total
Yen
Yen
Yen
Yen
Yen
Fiscal year ended December 31, 2025
-
77.00
-
77.00
154.00
Fiscal year ending December 31, 2026
-
Fiscal year ending December 31, 2026 (Forecast)
78.00
-
39.00
-
Notes:
Revisions to the most recently announced forecast of cash dividends: None
At a meeting of the Board of Directors held on February 5, 2026, Kao Corporation resolved to conduct a share split at a ratio of two shares for each share of ordinary share, with June 30, 2026, as the record date and July 1, 2026, as the effective date. The forecast year-end dividend per share for the fiscal year ending December 31, 2026, shown above is presented on a post-share split basis. The forecast of total annual cash dividends per share for the fiscal year ending December 31, 2026, has not been presented as the implementation of the share split makes a simple aggregation of the second quarter-end dividend and the year-end dividend impracticable. If the share split were not taken into account, the forecast year-end dividend per share for the fiscal year ending December 31, 2026, would be 78.00 yen, and total annual cash dividends per share would be 156.00 yen.
-
Forecast of consolidated operating results for the fiscal year ending December 31, 2026 (from January 1, 2026 to December 31, 2026)
(Percentages indicate year-on-year changes)
Net Sales
Operating income
Income before income taxes
Net income attributable to owners of the parent
Basic earnings per share
Fiscal year ending December 31, 2026
Millions of
yen
1,750,000
％
3.6
Millions of
yen
182,000
％
11.3
Millions of
yen
185,000
％
8.9
Millions of
yen
130,000
％
8.3
Yen
143.70
Notes:
Revisions to the most recently announced forecast of consolidated operating results: None
The Kao Group early adopted IFRS 18 in the three months ended March 31, 2026, and year-on-year changes in operating income and income before income tax are presented as percentages calculated based on retrospectively adjusted amounts due to the application of this Standard.
Basic earnings per share shown above are presented on a post-share split basis, as described in "2. Dividends." If the share split were not taken into account, basic earnings per share would be 287.41 yen.
-
Others
Significant changes in the scope of consolidation during the period: None Newly included: － companies (Company name) －
Excluded: － companies (Company name) －
Changes in accounting policies and changes in accounting estimates
Changes in accounting policies required by IFRS Accounting Standards ： None
Changes in accounting policies due to reasons other than 1) ： Yes
For details, please refer to page 17, "Changes in Accounting Policies" in "2. Condensed Consolidated Financial Statements and Notes, (6) Notes to Condensed Consolidated Financial Statements. "
Changes in accounting estimates ： None
Number of issued shares (ordinary shares)
Total number of issued shares at the end of the period (including treasury shares)
As of March 31, 2026
453,600,000 shares
As of December 31, 2025
453,600,000 shares
Number of treasury shares at the end of the period
As of March 31, 2026
1,279,117 shares
As of December 31, 2025
1,281,444 shares
Average number of shares outstanding during the period
Three months ended March 31, 2026 | 452,319,033 shares |
Three months ended March 31, 2025 | 464,484,565 shares |
(Caution regarding forward-looking statements, etc.)
Forward-looking statements such as earnings forecasts and other projections contained in this release are based on information available at the time of disclosure and assumptions that management believes to be reasonable, and do not constitute guarantees of future performance. Actual results may differ materially from expectations due to various factors.
Please refer to page 9, "1. Qualitative Information on Financial Results for the Three Months Ended March 31, 2026, (3) Description of Information on Outlook, Including Forecasts of Consolidated Results" for the suppositions that form the assumptions for earnings forecasts and cautions concerning the use of earnings forecasts.
Contents of Attachments1. Qualitative Information on Financial Results for the Three Months Ended March 31, 2026 ………… | 2 |
(1) Description of Operating Results ………………………………………………………………………………… | 2 |
(2) Description of Financial Position ………………………………………………………………………………… | 8 |
(3) Description of Information on Outlook, Including Forecasts of Consolidated Results …………… | 9 |
2. Condensed Consolidated Financial Statements and Notes ………………………………………………… | 10 |
(1) Condensed Consolidated Statement of Financial Position ……………………………………………… | 10 |
(2) Condensed Consolidated Statement of Income …………………………………………………………… | 12 |
(3) Condensed Consolidated Statement of Comprehensive Income ……………………………………… | 13 |
(4) Condensed Consolidated Statement of Changes in Equity ……………………………………………… | 14 |
(5) Condensed Consolidated Statement of Cash Flows ……………………………………………………… | 16 |
(6) Notes to Condensed Consolidated Financial Statements ………………………………………………… | 17 |
(7) Note regarding Assumption of Going Concern ……………………………………………………………… | 22 |
-
Qualitative Information on Financial Results for the Three Months Ended March 31, 2026
-
Description of Operating Results
Note: Changes and comparisons are all with the same period a year earlier unless otherwise noted. Like-for-like growth rates below exclude the effect of translation of local currencies into Japanese yen. Growth by volume includes changes due to differences in product mix.
As the Kao Group early adopted IFRS 18 "Presentation and Disclosure in Financial Statements" in the three months ended March 31, 2026, operating income for the three months ended March 31, 2025, has been retrospectively revised in accordance with this change in accounting policy.
(Billions of yen, except operating margin and per share amounts)
Three months ended March 31
2026
2025
Growth
Net sales
413.2
389.9
6.0%
Like-for-like: 2.5%
Operating income
44.9
30.9
45.3%
Operating margin (%)
10.9
7.9
-
Income before income taxes
46.0
31.6
45.6%
Net income
31.3
23.0
36.1%
Net income attributable to owners of the parent
31.0
22.8
35.7%
Basic earnings per share (Yen)
68.53
49.19
39.3%
The global economy remains uncertain amid rising energy prices, disruptions in global supply chains, and heightened geopolitical tensions in the Middle East. The Japanese economy has maintained a moderate recovery trend driven mainly by domestic demand, supported by continued wage increases and government measures to address rising prices. However, inflationary pressures are intensifying, and personal consumption remains weak.
Household and personal care products and cosmetics in Japan are the Kao Group's key markets, and during the period from January to March 2026, the household and personal care products market grew compared with the same period a year earlier according to both retail sales performance and consumer purchasing survey data. In the cosmetics market, retail sales performance increased, but consumer purchasing survey data indicate that domestic demand decreased compared with the same period a year earlier.
Under these conditions, the Kao Group has been working to transform earning power into sustainable growth while ensuring the achievement of its Mid-term Plan 2027 ("K27") and building a foundation for step-change growth thereafter.
Net sales increased 6.0% compared with the same period a year earlier to 413.2 billion yen. Currency translation accounted for a 3.5% increase and net sales increased 2.5% on a like-for-like basis (breakdown of the increase: 1.8% increase by volume, 0.7% increase by price). Operating income was
44.9 billion yen, an increase of 14.0 billion yen. Although operating income decreased in the Chemical Business, operating income increased overall, driven by strong performance in the Global Consumer Care Business, particularly in Japan. In addition, the Kao Group sold land as part of logistics optimization, and recognized a gain on sale of 11.5 billion yen from the sale. Income before income taxes was 46.0 billion yen, an increase of 14.4 billion yen. Net income was 31.3 billion yen, an increase of 8.3 billion yen.
The main exchange rates used for translating the financial statement items (income and expenses) of foreign consolidated subsidiaries and associates were as shown below.
U.S. dollar
156.81 (152.65)
Euro
183.57 (160.48)
Chinese yuan
22.64 (20.98)
First quarter Jan. - Mar.
Note: Figures in parentheses represent the exchange rates for the same period a year earlier.
Summary of Segment InformationConsolidated Results by Segment
Three months ended March 31
Net sales
Operating income
2025
(Billions of yen)
2026
(Billions of yen)
Growth (%)
Like-for-like (%)
2025
2026
Change (Billions of yen)
(Billions of yen)
Operating margin (%)
(Billions of yen)
Operating margin (%)
Fabric and Home Care Products
84.1
88.3
5.0
4.1
14.5
17.3
17.0
19.2
2.5
Sanitary Products
40.3
40.7
0.8
(1.6)
2.2
5.5
2.6
6.4
0.4
Hygiene Living Care Business
124.5
129.0
3.6
2.3
16.7
13.4
19.6
15.2
2.8
Health Beauty Care Business
97.9
106.5
8.8
5.3
6.7
6.9
7.9
7.4
1.2
Cosmetics Business
58.3
62.9
7.9
5.0
(0.6)
(1.0)
2.1
3.3
2.7
Business Connected Business
8.2
8.5
3.1
2.9
(0.1)
(1.2)
0.1
1.1
0.2
Global Consumer Care Business
288.9
306.8
6.2
3.9
22.8
7.9
29.6
9.7
6.8
Chemical Business
112.0
118.3
5.6
(0.5)
8.1
7.2
3.6
3.0
(4.5)
Total
400.9
425.1
6.0
2.6
30.9
-
33.2
-
2.4
Elimination and Reconciliation
(11.0)
(11.9)
-
-
0.0
-
11.7
-
11.6
Consolidated
389.9
413.2
6.0
2.5
30.9
7.9
44.9
10.9
14.0
(Remainder of page intentionally left blank)
Consolidated Net Sales Composition
(Billions of yen)
Three months ended March 31
Japan
Asia
Americas
Europe
Consolidated
Fabric and Home Care Products
2025
2026
72.7
78.0
10.7
9.6
0.8
0.7
-
-
84.1
88.3
Growth (%)
7.3
(10.3)
(6.2)
-
5.0
Like-for-like (%)
7.3
(16.0)
(17.6)
-
4.1
Sanitary Products
2025
2026
16.9
16.6
23.5
24.0
-
-
-
-
40.3
40.7
Growth (%)
(1.6)
2.5
-
-
0.8
Like-for-like (%)
(1.6)
(1.6)
-
-
(1.6)
Hygiene Living Care Business
2025
2026
89.6
94.7
34.1
33.6
0.8
0.7
-
-
124.5
129.0
Growth (%)
5.7
(1.5)
(6.2)
-
3.6
Like-for-like (%)
5.7
(6.1)
(17.6)
-
2.3
Health Beauty Care Business
2025
2026
47.2
50.8
9.0
9.6
27.0
30.3
14.6
15.7
97.9
106.5
Growth (%)
7.6
7.1
12.2
7.4
8.8
Like-for-like (%)
7.6
1.9
8.2
(5.4)
5.3
Cosmetics Business
2025
2026
39.7
41.7
10.6
12.6
1.8
1.8
6.2
6.8
58.3
62.9
Growth (%)
4.9
18.7
0.5
10.2
7.9
Like-for-like (%)
4.9
10.6
(2.3)
(2.0)
5.0
Business Connected Business
2025
2026
8.2
8.3
0.0
0.2
-
-
-
-
8.2
8.5
Growth (%)
1.4
314.6
-
-
3.1
Like-for-like (%)
1.4
284.5
-
-
2.9
Global Consumer Care Business
2025
2026
184.7
195.4
53.8
56.0
29.6
32.8
20.8
22.5
288.9
306.8
Growth (%)
5.8
4.2
11.0
8.3
6.2
Like-for-like (%)
5.8
(1.3)
6.9
(4.4)
3.9
Chemical Business
2025
2026
34.7
36.2
30.1
33.5
21.4
21.7
25.8
26.8
112.0
118.3
Growth (%)
4.4
11.2
1.7
3.9
5.6
Like-for-like (%)
4.4
4.0
(4.4)
(9.2)
(0.5)
Elimination of intersegment
2025
2026
(9.3)
(10.2)
(0.9)
(0.8)
(0.1)
(0.1)
(0.8)
(0.8)
(11.0)
(11.9)
Consolidated
2025
2026
210.1
221.5
83.0
88.7
50.9
54.5
45.9
48.6
389.9
413.2
Growth (%)
5.4
6.8
7.1
5.9
6.0
Like-for-like (%)
5.4
0.7
2.1
(7.0)
2.5
Notes:
Figures for the Global Consumer Care Business present sales to external customers and figures for the Chemical Business include sales to the Global Consumer Care Business in addition to external customers. Sales by geographic region are classified based on the location of the sales recognized.
The percentage of sales outside Japan to total net sales was 46.4% compared with 46.1% in the same period a year earlier.
Analysis of Change in Net Sales Compared with the Same Period a Year Earlier
Change (%)
Currency Translation (%)
Like-for-Like
(%)
By Volume (%)
By Price (%)
Fabric and Home Care Products
5.0
0.8
4.1
1.0
3.2
Sanitary Products
0.8
2.4
(1.6)
(0.3)
(1.3)
Hygiene Living Care Business
3.6
1.3
2.3
0.6
1.7
Health Beauty Care Business
8.8
3.5
5.3
5.1
0.2
Cosmetics Business
7.9
2.9
5.0
4.0
1.0
Business Connected Business
3.1
0.2
2.9
2.9
-
Global Consumer Care Business
6.2
2.3
3.9
2.9
1.0
Chemical Business
5.6
6.1
(0.5)
(0.5)
(0.0)
Total
6.0
3.5
2.5
1.8
0.7
Note: Chemical Business sales include intersegment transactions.
Global Consumer Care BusinessSales increased 6.2% compared with the same period a year earlier to 306.8 billion yen. Currency translation accounted for a 2.3% increase and sales increased 3.9% on a like-for-like basis (breakdown of the increase: 2.9% increase by volume, 1.0% increase by price).
Globally, market conditions remained challenging, reflecting rising raw material and distribution costs due to the Middle East situation, as well as increasing consumer frugality. In Japan, the sales environment also remained severe, as consumers became more selective amid continued price increases. Under these conditions, the Kao Group ensured stable supply by leveraging its globally flexible procurement and production network. In addition, the Group expanded global sales in focus businesses and offered high-value-added products, primarily in Japan, while implementing selling price increases in line with added value.
In Japan, sales increased 5.8% to 195.4 billion yen.
In Asia, sales increased 4.2% to 56.0 billion yen. On a like-for-like basis, sales decreased 1.3%.
In the Americas, sales increased 11.0% to 32.8 billion yen. On a like-for-like basis, sales increased 6.9%. In Europe, sales increased 8.3% to 22.5 billion yen. On a like-for-like basis, sales decreased 4.4%.
Operating income increased 6.8 billion yen compared with the same period a year earlier to 29.6 billion yen due to the contribution of increased sales volume and improved earning power.
Note: The Kao Group's Global Consumer Care Business consists of the Hygiene Living Care Business, the Health Beauty Care Business, the Cosmetics Business, and the Business Connected Business.
Hygiene Living Care Business
Sales increased 3.6% compared with the same period a year earlier to 129.0 billion yen. Currency translation accounted for a 1.3% increase and sales increased 2.3% on a like-for-like basis (breakdown of the increase: 0.6% increase by volume, 1.7% increase by price).
Sales of fabric and home care products increased 5.0% to 88.3 billion yen. Currency translation accounted for a 0.8% increase and sales increased 4.1% on a like-for-like basis (breakdown of the increase: 1.0% increase by volume, 3.2% increase by price).
Sales of fabric care products increased substantially. In Japan, laundry detergents contributed to increased sales and market share expansion, due in part to market growth and the effect of selling price increases for high-value-added products.
Sales of home care products increased. Strong sellers in Japan included CuCute dishwashing detergent.
Operating income for fabric and home care products increased 2.5 billion yen to 17.0 billion yen.
Sales of sanitary products increased 0.8% to 40.7 billion yen. Currency translation accounted for a 2.4% increase and sales decreased 1.6% on a like-for-like basis (breakdown of the decrease: 0.3% decrease by volume, 1.3% decrease by price).
Sales of Laurier sanitary napkins increased. Sales grew in China and other countries due to the full-scale start of globally integrated operations and progress in loyalty marketing. Sales of Merries baby diapers decreased due to aggressive competition in Asia, among other factors.
Operating income for sanitary products was 2.6 billion yen, an increase of 0.4 billion yen.
Operating income for the Hygiene Living Care Business increased 2.8 billion yen compared with the same period a year earlier to 19.6 billion yen.
Health Beauty Care Business
Sales increased 8.8% compared with the same period a year earlier to 106.5 billion yen. Currency translation accounted for a 3.5% increase and sales increased 5.3% on a like-for-like basis (breakdown of the increase: 5.1% increase by volume, 0.2% increase by price).
Sales of skin care products increased substantially. Sales increased in Japan, with growth centered on UV care and other products. Sales also increased in the Americas, driven by an increase in transactions with major retail chains for UV care products and new products from the JERGENS skin care brand.
Sales of hair care products increased substantially. In Japan, high premium hair care brands melt and
THE ANSWER contributed significantly to the increase. Sales of professional hair care products (formerly
products for hair salons) in the Americas and Europe decreased as GOLDWELL was impacted by factors including an economic downturn in Europe.
Sales of personal health products increased due to strong sales of PureOra oral care products, among other products.
Operating income increased 1.2 billion yen compared with the same period a year earlier to 7.9 billion yen.
Cosmetics Business
Sales increased 7.9% compared with the same period a year earlier to 62.9 billion yen. Currency translation accounted for a 2.9% increase and sales increased 5.0% on a like-for-like basis (breakdown of the increase: 4.0% increase by volume, 1.0% increase by price).
Sales in Japan increased, with the contribution of the six focus brands, including the Curél derma care brand, the KATE makeup brand, and new products from the SOFINA iP skin care brand. Sales in Asia also increased due to the growth of Curél in China and the KANEBO prestige skincare and makeup brand and KATE in Thailand, a market where the Kao Group is focusing its efforts, as well as increased sales of other brands. In Europe, although the Kao Group stepped up its rollout of Curél, sales decreased due to the impact of a market slowdown.
Operating income increased 2.7 billion yen compared with the same period a year earlier to 2.1 billion yen.
Business Connected Business
Sales increased 3.1% compared with the same period a year earlier to 8.5 billion yen. Currency translation accounted for a 0.2% increase and sales increased 2.9% on a like-for-like basis (breakdown of the increase: 2.9% increase by volume, no increase or decrease by price).
Sales of commercial-use hygiene products increased. Increased demand resulted in steady sales of kitchen cleaning agents and cleaning products in the food service and nursing care sectors, as well as guest room amenities in the lodging and leisure sector.
Operating income increased 0.2 billion yen compared with the same period a year earlier to 0.1 billion yen.
Chemical BusinessSales increased 5.6% compared with the same period a year earlier to 118.3 billion yen. Currency translation accounted for a 6.1% increase and sales decreased 0.5% on a like-for-like basis (breakdown of the decrease: 0.5% decrease by volume, 0.0% decrease by price).
In oleo chemicals, sales decreased due to the impact of inventory adjustments by customers outside Japan, despite the contribution from selling price adjustments implemented in response to rising prices for fat and oil raw materials.
In consumer care chemicals, sales increased as demand remained firm, with the additional contribution from selling price adjustments implemented in response to rising prices for fat and oil raw materials.
In performance chemicals, sales increased, supported by demand in key application areas, despite regional differences in demand.
In information materials, sales decreased due to the impact of a decline in demand for toner and toner binders, although demand remained firm in the semiconductor-related, hard disk, and other target sectors.
Operating income decreased 4.5 billion yen compared with the same period a year earlier to 3.6 billion yen due to shrinking profit margins caused by a delay in selling price adjustments in response to rising raw material prices, mainly for oleo chemicals, and a slowdown in demand in Europe and other regions.
-
Description of Financial Position Consolidated Financial Position
(Billions of yen, except per share amounts)
December 31,
March 31,
Incr./(Dcr.)
2025
2026
Total assets
1,875.1
1,831.2
(43.9)
Total liabilities
780.4
728.1
(52.3)
Total equity
1,094.7
1,103.1
8.4
Ratio of equity attributable to owners of the parent
56.7%
58.6%
-
to total assets
Equity attributable to owners of the parent per
2,352.49
2,371.02
18.53
share (Yen)
Bonds and borrowings 131.7
132.2
0.5
Total assets decreased 43.9 billion yen from December 31, 2025, to 1,831.2 billion yen. The principal decrease in assets was a 48.4 billion yen decrease in cash and cash equivalents.
Total liabilities decreased 52.3 billion yen from December 31, 2025, to 728.1 billion yen. The principal decreases in liabilities were a 16.3 billion yen decrease in income tax payables and a 15.6 billion yen decrease in other current liabilities.
Total equity increased 8.4 billion yen from December 31, 2025, to 1,103.1 billion yen. The principal increases in equity were net income totaling 31.3 billion yen and exchange differences on translation of foreign operations totaling 12.3 billion yen. The principal decrease in equity was dividends totaling 35.6
billion yen.
The ratio of equity attributable to owners of the parent to total assets was 58.6% compared with 56.7% at December 31, 2025.
- Description of Information on Outlook, Including Forecasts of Consolidated Results
The Kao Group has been working to transform earning power into sustainable growth while ensuring the achievement of its Mid-term Plan 2027 ("K27") and building a foundation for step-change growth thereafter. Business results for the three months ended March 31, 2026, exceeded its plan.
However, escalating tensions in the Middle East are expected to create an uncertain business environment, reflecting a slowdown in the global economy, rising raw material and international supply chain costs, and increased risks in raw material procurement. Under these circumstances, the Kao Group will mitigate the impact by leveraging its global procurement and production network, implementing selling price pass-through, and switching to alternative raw materials. Accordingly, there is no change to the consolidated earnings forecast announced on February 5, 2026.
The main exchange rates used in the forecast of consolidated results are one U.S. dollar to 150 yen, one euro to 175 yen, and one Chinese yuan to 21.0 yen.
(Remainder of page intentionally left blank)
-
Description of Operating Results
-
Condensed Consolidated Financial Statements and Notes
-
Condensed Consolidated Statement of Financial Position
Kao Corporation and Consolidated Subsidiaries As of March 31, 2026
(Millions of yen)
December 31, 2025
March 31, 2026
Change
Assets
Current assets
Cash and cash equivalents
323,282
274,840
(48,442)
Trade and other receivables
245,286
241,581
(3,705)
Inventories
292,366
300,297
7,931
Other financial assets
10,925
8,768
(2,157)
Income tax receivables
5,469
6,682
1,213
Other current assets
26,906
36,323
9,417
Subtotal
904,234
868,491
(35,743)
Non-current assets held for sale
1,658
1,716
58
Total current assets
905,892
870,207
(35,685)
Non-current assets
Property, plant and equipment
443,080
438,410
(4,670)
Right-of-use assets
113,218
110,081
(3,137)
Goodwill
231,071
233,845
2,774
Intangible assets
79,471
78,548
(923)
Investments accounted for using the equity method
15,616
14,686
(930)
Other financial assets
29,639
29,276
(363)
Deferred tax assets
43,303
42,324
(979)
Other non-current assets
13,764
13,782
18
Total non-current assets
969,162
960,952
(8,210)
Total assets
1,875,054
1,831,159
(43,895)
(Millions of yen)
December 31, 2025
March 31, 2026
Change
Liabilities and equity
Liabilities
Current liabilities
Trade and other payables
270,149
261,997
(8,152)
Bonds and borrowings
26,059
51,626
25,567
Lease liabilities
20,878
21,083
205
Other financial liabilities
7,623
971
(6,652)
Income tax payables
31,824
15,508
(16,316)
Provisions
1,362
1,019
(343)
Contract liabilities
43,342
41,430
(1,912)
Other current liabilities
116,958
101,380
(15,578)
Total current liabilities
518,195
495,014
(23,181)
Non-current liabilities
Bonds and borrowings
105,599
80,577
(25,022)
Lease liabilities
90,606
87,563
(3,043)
Other financial liabilities
6,543
6,869
326
Retirement benefit liabilities
36,686
35,577
(1,109)
Provisions
6,934
6,905
(29)
Deferred tax liabilities
10,829
10,894
65
Other non-current liabilities
4,962
4,691
(271)
Total non-current liabilities
262,159
233,076
(29,083)
Total liabilities
780,354
728,090
(52,264)
Equity
Share capital
85,424
85,424
-
Capital surplus
106,398
106,541
143
Treasury shares
(5,125)
(5,109)
16
Other components of equity
160,759
172,872
12,113
Retained earnings
716,621
712,736
(3,885)
Equity attributable to owners of the parent
1,064,077
1,072,464
8,387
Non-controlling interests
30,623
30,605
(18)
Total equity
1,094,700
1,103,069
8,369
Total liabilities and equity
1,875,054
1,831,159
(43,895)
-
Condensed Consolidated Statement of Income
Kao Corporation and Consolidated Subsidiaries Three months ended March 31, 2026
(Millions of yen)
Three months ended
March 31, 2025
Three months ended
March 31, 2026
Change
Notes
Net sales
1
389,857
413,224
23,367
Cost of sales
(241,879)
(254,526)
(12,647)
Gross profit
147,978
158,698
10,720
Selling, general and administrative expenses
2
(117,772)
(126,433)
(8,661)
Other operating income
4,448
16,648
12,200
Other operating expenses
(3,755)
(4,010)
(255)
Operating income
1
30,899
44,903
14,004
Share of profit in investments
accounted for using the equity method
999
1,145
146
Other investment income and expenses
(510)
1,362
1,872
Income before financing and income taxes
31,388
47,410
16,022
Financial income
1,091
5
(1,086)
Financial expenses
(905)
(1,435)
(530)
Income before income taxes
31,574
45,980
14,406
Income taxes
(8,569)
(14,668)
(6,099)
Net income
23,005
31,312
8,307
Attributable to:
Owners of the parent
22,850
30,999
8,149
Non-controlling interests
155
313
158
Net income
23,005
31,312
8,307
Earnings per share
Basic (Yen)
49.19
68.53
Diluted (Yen)
-
-
-
Condensed Consolidated Statement of Comprehensive Income
Kao Corporation and Consolidated Subsidiaries Three months ended March 31, 2026
(Millions of yen)
Three months ended
March 31, 2025
Three months ended
March 31, 2026
Change
Net income
23,005
31,312
8,307
Other comprehensive income
Items that will not be reclassified to profit or loss:
Net gain (loss) on revaluation of financial assets measured at fair value
through other comprehensive income
(287)
(342)
(55)
Remeasurements of defined benefit plans
(28)
-
28
Share of other comprehensive income of investments accounted for using the equity method
(159)
462
621
Total of items that will not be reclassified to profit or loss
(474)
120
594
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations
(26,803)
12,276
39,079
Share of other comprehensive income of investments accounted for using the equity method
(285)
104
389
Total of items that may be reclassified subsequently to profit or loss
(27,088)
12,380
39,468
Other comprehensive income, net of taxes
(27,562)
12,500
40,062
Comprehensive income
(4,557)
43,812
48,369
Attributable to:
Owners of the parent
(2,884)
43,057
45,941
Non-controlling interests
(1,673)
755
2,428
Comprehensive income
(4,557)
43,812
48,369
-
Condensed Consolidated Statement of Changes in Equity
Kao Corporation and Consolidated Subsidiaries
Three months ended March 31, 2025 (Millions of yen)
Equity attributable to owners of the parent
Other components of equity
Share capital
Capital surplus
Treasury shares
Exchange differences on translation of foreign operations
Net gain (loss) on derivatives designated as cash flow hedges
Net gain (loss) on revaluation of financial assets measured at fair value through other comprehensive
income
January 1, 2025
85,424
106,256
(5,924)
124,321
6
7,912
Net income
-
-
-
-
-
-
Other comprehensive income
－
－
－
(25,257)
(2)
(447)
Comprehensive income
-
-
-
(25,257)
(2)
(447)
Disposal of treasury shares
-
0
0
-
-
-
Purchase of treasury shares
-
-
(2)
-
-
-
Share-based payment transactions
-
187
-
-
-
-
Dividends
-
-
-
-
-
-
Transfer from other
components of equity to retained earnings
-
-
-
-
-
11
Total transactions with the owners
－
187
(2)
－
－
11
March 31, 2025
85,424
106,443
(5,926)
99,064
4
7,476
Equity attributable to owners of the parent
Other components of equity
Non-controlling interests
Remeasurements of defined benefit
plans
Retained earnings
Total equity
Total
Total
January 1, 2025
-
132,239
748,781
1,066,776
32,059
1,098,835
Net income
-
-
22,850
22,850
155
23,005
Other comprehensive income
(28)
(25,734)
－
(25,734)
(1,828)
(27,562)
Comprehensive income
(28)
(25,734)
22,850
(2,884)
(1,673)
(4,557)
Disposal of treasury shares
-
-
-
0
-
0
Purchase of treasury shares
-
-
-
(2)
-
(2)
Share-based payment transactions
-
-
-
187
-
187
Dividends
-
-
(35,300)
(35,300)
(1,178)
(36,478)
Transfer from other components of equity to retained earnings
28
39
(39)
-
-
-
Total transactions with the owners
28
39
(35,339)
(35,115)
(1,178)
(36,293)
March 31, 2025
-
106,544
736,292
1,028,777
29,208
1,057,985
Three months ended March 31, 2026 (Millions of yen)
Equity attributable to owners of the parent
Other components of equity
Share capital
Capital surplus
Treasury shares
Exchange differences on translation of foreign operations
Net gain (loss) on derivatives designated as cash flow hedges
Net gain (loss) on revaluation of financial assets measured at fair value through other comprehensive
income
January 1, 2026
85,424
106,398
(5,125)
150,503
6
10,250
Net income
-
-
-
-
-
-
Other comprehensive income
－
－
－
11,938
－
120
Comprehensive income
-
-
-
11,938
-
120
Disposal of treasury shares
-
(18)
19
-
-
-
Purchase of treasury shares
-
-
(3)
-
-
-
Share-based payment transactions
-
161
-
-
-
-
Dividends
-
-
-
-
-
-
Transfer from other components of equity to retained earnings
-
-
-
-
-
55
Total transactions with the owners
－
143
16
－
－
55
March 31, 2026
85,424
106,541
(5,109)
162,441
6
10,425
Equity attributable to owners of the parent
Other components of equity
Non-controlling interests
Remeasurements of defined benefit
plans
Retained earnings
Total equity
Total
Total
January 1, 2026
-
160,759
716,621
1,064,077
30,623
1,094,700
Net income
-
-
30,999
30,999
313
31,312
Other comprehensive income
－
12,058
－
12,058
442
12,500
Comprehensive income
-
12,058
30,999
43,057
755
43,812
Disposal of treasury shares
-
-
(0)
1
-
1
Purchase of treasury shares
-
-
-
(3)
-
(3)
Share-based payment transactions
-
-
-
161
-
161
Dividends
-
-
(34,829)
(34,829)
(773)
(35,602)
Transfer from other components of equity to retained earnings
-
55
(55)
-
-
-
Total transactions with the owners
－
55
(34,884)
(34,670)
(773)
(35,443)
March 31, 2026
-
172,872
712,736
1,072,464
30,605
1,103,069
-
Condensed Consolidated Statement of Cash Flows
Kao Corporation and Consolidated Subsidiaries Three months ended March 31, 2026
(Millions of yen)
Three months ended
March 31, 2025
Three months ended
March 31, 2026
Cash flows from operating activities
Operating income
30,899
44,903
Depreciation and amortization
21,485
22,307
(Gains) losses on sale and disposal of property, plant and equipment, and intangible assets
450
(11,207)
(Increase) decrease in trade and other receivables
11,257
5,797
(Increase) decrease in inventories
(19,522)
(5,710)
Increase (decrease) in trade and other payables
(8,348)
(6,713)
Increase (decrease) in retirement benefit liabilities
(975)
(1,125)
Increase (decrease) in provisions
(1,517)
(391)
Other
(36,258)
(33,526)
Cash flows from operating activities before income taxes
(2,529)
14,335
Income taxes paid
(17,360)
(31,092)
Net cash flows from operating activities
(19,889)
(16,757)
Cash flows from investing activities
Payments into time deposits
(1,917)
(1,880)
Proceeds from withdrawal of time deposits
1,913
3,800
Purchase of property, plant and equipment
(11,086)
(13,396)
Proceeds from sale of property, plant and equipment
46
14,114
Purchase of intangible assets
(2,237)
(1,421)
Interest received
911
734
Dividends received
2,618
3,364
Other
24
93
Net cash flows from investing activities
(9,728)
5,408
Cash flows from financing activities
Increase (decrease) in short-term borrowings
-
556
Proceeds from long-term borrowings
10,000
-
Repayments of long-term borrowings
(10,002)
(2)
Repayments of lease liabilities
(5,473)
(5,789)
Interest paid
(657)
(963)
Dividends paid to owners of the parent
(34,740)
(34,313)
Dividends paid to non-controlling interests
(471)
(773)
Other
(10)
(2)
Net cash flows from financing activities
(41,353)
(41,286)
Net increase (decrease) in cash and cash equivalents
(70,970)
(52,635)
Cash and cash equivalents at the beginning of the period
357,713
323,282
Effect of exchange rate changes on cash and cash equivalents
(8,026)
4,193
Cash and cash equivalents at the end of the period
278,717
274,840
-
Notes to Condensed Consolidated Financial Statements Changes in Accounting Policies
Early Adoption of IFRS 18 "Presentation and Disclosure in Financial Statements"
The Kao Group early adopted IFRS 18 "Presentation and Disclosure in Financial Statements" (issued in April 2024; hereafter, "IFRS 18") in the three months ended March 31, 2026. The Kao Group has applied the Standard retrospectively in accordance with the transitional provisions, and has also restated the comparative information in accordance with IFRS 18.
In the first year of applying IFRS 18, entities are required to disclose a reconciliation for each line item in the consolidated statement of income for the immediately preceding comparative period, showing the restated amounts presented applying this Standard and the amounts previously presented applying IAS 1, "Presentation of Financial Statements" (hereafter, "IAS 1").
The reconciliation of each line item in the condensed consolidated statement of income for the three months ended March 31, 2025 is as follows.
Three months ended March 31, 2025 (Millions of yen)
IAS 1
Reclassification
IFRS 18
Accounts
Amounts
Amounts
Notes
Accounts
Net sales
389,857
-
389,857
Net sales
Cost of sales
(241,879)
-
(241,879)
Cost of sales
Gross profit
147,978
-
147,978
Gross profit
Selling, general and administrative expenses
(117,772)
-
(117,772)
Selling, general and administrative expenses
Other operating income
4,448
-
4,448
Other operating income
Other operating expenses
(3,470)
(285)
(3,755)
(1)
Other operating expenses
Operating income
31,184
(285)
30,899
Operating income
999
999
(2)
Share of profit in investments accounted for using the equity method
(510)
(510)
(1),(3)
Other investment income
and expenses
204
31,388
Income before financing and income taxes
Financial income
1,076
15
1,091
(1),(3)
Financial income
Financial expenses
(1,685)
780
(905)
(1)
Financial expenses
Share of profit in investments accounted for using the equity
method
999
(999)
-
(2)
Income before income taxes
31,574
-
31,574
Income before income taxes
Income taxes
(8,569)
-
(8,569)
Income taxes
Net income
23,005
-
23,005
Net income
Notes on the Reconciliation of Income and Expenses for the First Three Months of the Previous Fiscal Year (January 1, 2025 to March 31, 2025)
Reclassification of Foreign Exchange Differences
Under IAS 1, foreign exchange differences were presented within financial expenses. Under IFRS 18, they are classified and presented within the operating, investing, or financing categories.
Reclassification of Share of Profit in Investments Accounted for Using the Equity Method
Under IFRS 18, the share of profit in investments accounted for using the equity method is presented within the investing category.
Reclassification of Other Investment Income and Expenses
Under IAS 1, interest and dividend income was presented within financial income. Under IFRS 18, it is presented as other investment income and expenses.
Segment Information
Summary of Reportable Segments
The Kao Group's reportable segments are the components of the Kao Group for which discrete financial information is available and are regularly reviewed by the Board of Directors in deciding how to allocate resources and in assessing their performance. Net sales and operating income are the key measures used by the Board of Directors to evaluate the performance of each segment.
The Kao Group is organized on the basis of five businesses: the four business areas that constitute the Global Consumer Care Business (the Hygiene Living Care Business, the Health Beauty Care Business, the Cosmetics Business, and the Business Connected Business) and the Chemical Business. In each business, the Kao Group plans comprehensive business strategies and carries out business activities on a global basis.
Accordingly, the Kao Group has five reportable segments: the Hygiene Living Care Business, the Health Beauty Care Business, the Cosmetics Business, the Business Connected Business, and the Chemical Business.
The Kao Group early adopted IFRS 18 in the three months ended March 31, 2026. The Kao Group has applied the Standard retrospectively in accordance with the transitional provisions, and has also restated the comparative information in accordance with IFRS 18.
Major products by reportable segment are as follows:
Reportable segments
Major products
Global Consumer Care Business
Hygiene Living Care Business
Fabric care products
Laundry detergents, fabric treatments
Home care products
Kitchen cleaning products, house cleaning products,
paper cleaning products
Sanitary products
Sanitary napkins, baby diapers
Health Beauty Care Business
Skin care products
Soaps, facial cleansers, body cleansers, UV care
products
Hair care products
Shampoos, conditioners, hair styling agents, hair
coloring agents, men's products
Personal health
products
Bath additives, oral care products, thermo products
Cosmetics
Business
Cosmetics
Counseling cosmetics, self-selection cosmetics
Business
Connected Business
Commercial-use
hygiene products, life care products
Commercial-use hygiene products, life care products
Chemical Business
Oleo chemicals
Oleochemicals, fat and oil derivatives
Consumer care
chemicals
Surfactants and blending products, fragrances
Performance chemicals
Water-reducing admixture for concrete, casting sand binders, plastics additives, process chemicals
for various industries
Information materials
Toners/Toner binders, inkjet ink colorants, ink, fine polishing agents and cleaner for hard disk,
materials and process chemicals for semiconductor
Sales and Results of Reportable Segments
Three months ended March 31, 2025
(Millions of yen)
Reportable segments Global Consumer Care Business
Hygiene
Health
Business
Chemical
Reconciliation1 Consolidated
Living Care Beauty Care Cosmetics
Connected
Subtotal
Business Total
Business
Business
Business
Business
Net sales
124,468
97,863
58,298
8,241
288,870
100,987
389,857
-
389,857
-
-
-
-
-
11,027
11,027
(11,027)
-
124,468
97,863
58,298
8,241
288,870
112,014
400,884
(11,027)
389,857
16,726
6,741
(568)
(96)
22,803
8,065
30,868
31
30,899
999
Sales to customers Intersegment sales and transfers2
Total net sales
Operating income (loss)
Share of profit in investments accounted for using
the equity method
Other investment
income and
expenses
(510)
Income before
financing and income
31,388
taxes
Financial income
1,091
Financial expenses
(905)
Income before income taxes
Notes:
The operating income (loss) reconciliation of 31 million yen includes income and corporate expenses not allocated to reportable segments, as well as elimination of intersegment inventory transactions.
Intersegment sales and transfers are mainly calculated based on market price and manufacturing cost.
31,574
Three months ended March 31, 2026
Reportable segments
(Millions of yen)
Global Consumer Care Business
Hygiene
Health
Business
Chemical
Reconciliation1 Consolidated
Living Care Beauty Care Cosmetics
Connected
Subtotal
Business Total
Business
Business
Business
Business
Net sales
Sales to customers 128,972 106,470 62,887 8,496 306,825 106,399 413,224 － 413,224
Intersegment sales
and transfers2 － － － － － 11,863 11,863 (11,863) －
Total net sales 128,972 106,470 62,887 8,496 306,825 118,262 425,087 (11,863) 413,224
Operating income (loss)
Share of profit in investments accounted for using the equity method Other investment income and expenses
Income before financing and income taxes
19,551 7,915 2,085 93 29,644 3,602 33,246 11,657 44,903
1,145
1,362
47,410
Financial income 5
Financial expenses (1,435)
Income before income taxes
45,980
Notes:
The operating income (loss) reconciliation of 11,657 million yen includes income and corporate expenses not allocated to reportable segments, as well as elimination of intersegment inventory transactions.
Intersegment sales and transfers are mainly calculated based on market price and manufacturing cost.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist of the following:
(Millions of yen)
Three months ended March 31, 2025
Three months ended March 31, 2026
Selling expenses
Advertising
16,669
19,100
Sales promotion
12,442
14,211
Employee benefits
27,579
28,976
Depreciation
1,495
1,507
Amortization
765
830
Other selling expenses
7,697
9,241
Total selling expenses
66,647
73,865
General and administrative expenses
Employee benefits1
16,637
17,890
Depreciation1
2,346
2,553
Amortization1
2,145
2,331
Research and development1
16,086
15,563
Other general and administrative expenses
13,911
14,231
Total general and administrative expenses
51,125
52,568
Total
117,772
126,433
Note:
1. Employee benefits, depreciation, and amortization related to research and development activities are included in research and development.
- Note regarding Assumption of Going Concern
-
Condensed Consolidated Statement of Financial Position
None applicable.
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Kao Corporation published this content on May 12, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 12, 2026 at 07:03 UTC.
