Kao : Six Months Ended June 30, 2021 (Jan. 1, 2021 - Jun. 30, 2021) <612KB>

Consolidated Financial Results for the Six Months Ended June 30, 2021 [IFRS]

			August 3, 2021
Company name:	Kao Corporation		Tokyo Stock Exchange in Japan
Stock code:	4452	(URL: www.kao.com/global/en/investor-relations/library/results/)
Representative:	Yoshihiro Hasebe, President and CEO
Contact person:	Mitsuhiro Watanabe, Vice President, Investor Relations	E-mail: [e-mail]

Scheduled starting date of the dividend payments: September 1, 2021

Supplementary documents of the financial results: Yes

Financial results information meeting: Yes (for institutional investors and analysts)

(Millions of yen, except per share amounts) (Amounts less than one million yen are rounded)

1. Consolidated financial results for the six months ended June 30, 2021 (from January 1, 2021 to June 30, 2021)

(1)	Consolidated operating results
									(Percentages indicate year-on-year changes)
						Six months ended				Six months ended
						June 30, 2021	%			June 30, 2020		%
	Net sales	675,179	1.2			667,158	(7.5)
	Operating income	70,551	(5.3)			74,484	(13.8)
	Income before income taxes	74,133	0.5			73,730	(13.8)
	Net income	53,455	3.7			51,543	(11.5)
	Net income attributable to owners of the parent	52,538	3.8			50,600	(11.7)
	Comprehensive income	79,988	94.2			41,191	(18.0)
	Basic earnings per share (Yen)	110.12					105.21
	Diluted earnings per share (Yen)	110.12					105.20
(2)	Consolidated financial position
						June 30, 2021				December 31, 2020
	Total assets	1,620,608					1,665,616
	Total equity	932,673					938,194
	Equity attributable to owners of the parent	915,770					923,687
	Ratio of equity attributable to owners
	of the parent to total assets	56.5%					55.5%
	Equity attributable to owners of the
	parent per share (Yen)	1,932.50					1,920.56
2.	Dividends
						Year ending		Year ending		Year ended
					December 31, 2021		December 31, 2021		December 31, 2020
						(Forecast)
	Annual cash dividends per share (Yen)
		1st quarter end				-			-
		2nd quarter end				72.00			70.00
		3rd quarter end	-								-
		Fiscal year end			72.00								70.00
		Total	144.00								140.00

Note: Revisions to the cash dividends forecast most recently announced: None

Notice regarding execution of quarterly review procedures

This quarterly financial results report is exempt from quarterly review by certified public accountants or accounting firms.

Explanation regarding the appropriate use of forecast of operating results and other special items

Forward-lookingstatements 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 7, "Qualitative Information on Financial Results for the Six Months Ended June 30, 2021 - 2. 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.

Six Months Ended June 30, 2021

3. Forecast of consolidated operating results for the year ending December 31, 2021 (from January 1, 2021 to December 31, 2021)

			(Millions of yen, except per share amounts)
			(Percentages indicate year-on-year changes)
						Year ending
				December 31, 2021		%
	Net sales				1,430,000	3.5
	Operating income				177,000	0.8
	Income before income taxes				177,000	1.7
	Net income attributable to owners of the parent				127,000	0.7
	Basic earnings per share (Yen)				267.11	-
	Note: Revisions to the consolidated operating results forecast most recently announced: None
4.	Others
(1)	Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in change in scope of
	consolidation): None
(2)	Changes in accounting policies and changes in accounting estimates
	1) Changes in accounting principles required by IFRS: None
	2) Changes in accounting principles due to reasons other than 1): None
	3) Changes in accounting estimates: None
(3)	Number of issued shares outstanding at the end of this period (ordinary shares)
			June 30, 2021			December 31, 2020
	Number of issued shares including treasury shares	475,000,000		482,000,000
	Number of treasury shares	1,121,651		1,054,019
			Six months ended		Six months ended
			June 30, 2021			June 30, 2020
	Weighted average number of shares outstanding	477,079,090		480,918,350
	during this period

Six Months Ended June 30, 2021

Qualitative Information on Financial Results for the Six Months Ended June 30, 2021

Note: Like-for-like growth rates below exclude the effect of translation of local currencies into Japanese yen.

1. Description of Operating Results

(Billions of yen, except operating margin and per share amounts)

Six months ended June 30	2021	2020	Growth
Net sales	675.2	667.2	1.2%
Like-for-like: (0.6%)
Operating income	70.6	74.5	(5.3%)
Operating margin (%)	10.4	11.2	-
Income before income taxes	74.1	73.7	0.5%
Net income	53.5	51.5	3.7%
Net income attributable to owners of the parent	52.5	50.6	3.8%
Basic earnings per share (Yen)	110.12	105.21	4.7%

The novel coronavirus (COVID-19) pandemic continued to have a major impact on social and economic activities and the lives of people around the world. Even as more people were being vaccinated in countries around the world, the number of infections continue to fluctuate, and the business environment remained unclear.

During the period from January to June 2021, the household and personal care products market in Japan, which is the Kao Group's key market, shrank compared with the same period a year earlier, reflecting the absence of the increase in demand, mainly for hygiene-related products, that arose in the previous year due to the pandemic, but grew compared with the same period two years before. On the other hand, the cosmetics market shrank compared with the same period a year earlier and has not recovered due to the substantial impact of factors including the declaration of a state of emergency, which continued in various regions.

Amid these circumstances, net sales increased 1.2% compared with the same period a year earlier to 675.2 billion yen. On a like-for-like basis, net sales decreased 0.6%. Operating income was 70.6 billion yen, a decrease of 3.9 billion yen compared with the same period a year earlier, and income before income taxes was 74.1 billion yen, an increase of 0.4 billion yen. Net income was 53.5 billion yen, an increase of 1.9 billion yen.

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Six Months Ended June 30, 2021

The main exchange rates used for translating the financial statement items (income and expenses) of foreign consolidated subsidiaries and associates were as shown below.

	First quarter	Second quarter
	Jan. - Mar.	Apr. - Jun.
U.S. dollar	105.96	(108.95)	109.47 (107.54)
Euro	127.74	(120.18)	131.90 (118.41)
Chinese yuan	16.35	(15.61)	16.95 (15.18)

Note: Figures in parentheses represent the exchange rates for the same period a year earlier.

Summary of Segment Information

The following is an overview of changes in reportable segments implemented as of the three months ended March 31, 2021 (Reference: Page 14, "1. Segment Information" in "Notes to Condensed Consolidated Financial Statements").

1. The Hygiene and Living Care Business has been newly established and incorporates sanitary products from the former Human Health Care Business in addition to fabric care products and home care products, which were previously classified in the Fabric and Home Care Business.
2. The Health and Beauty Care Business has been newly established and incorporates personal health products, which were previously classified in the Human Health Care Business, in addition to skin care products and hair care products, which were previously classified in the Skin Care and Hair Care Business.
3. The Life Care Business has been newly established and incorporates health drinks, which were previously classified in the Human Health Care Business, in addition tocommercial-use hygiene products, which were previously classified in the Fabric and Home Care Business.
4. Due to the reorganization of segments described in 1 to 3 above, sales and operating income for the same period a year earlier have been restated.

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Six Months Ended June 30, 2021

Consolidated Results by Segment

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