Kao : Summary of Consolidated Financial Results for the Three Months Ended March 31, 2021

Consolidated Financial Results

for the Three Months Ended March 31, 2021

Kao Corporation

May 7, 2021

These presentation materials are available on our website in PDF format:

www.kao.com/global/en/investor-relations/library/presentations/

Forward-looking statements such as earnings forecasts and other projections contained in this release are based on information available at this time and assumptions that management believes to be reasonable, and do not constitute guarantees of future performance. Actual results may differ materially from those expectations due to various factors.

・The following is an overview of the reportable segments that have changed as of the three months ended March 31, 2021. (For details, please refer to page 16).

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 to commercial-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.

• Numbers in parentheses in charts are negative

2

Consumer Products Market in Japan

■Growth of household and personal care market1

■Growth of cosmetics market2

(%)									SRI+(vs. two years before) 3		(%)
160				SRI+(vs. previous year)		160
140		130		121					122						140
109	118	109	106	112		113	111	111	107	106	120
120	126		110	104		100
100		112	118		106 108		111	110
105		107	107		104	106			80
80				95
							77					85	60
60													40
	2020											2021

(Source: SRI+ POS data by INTAGE Inc.)

				SRI+(vs. previous year)		SRI+(vs. two years before) 3
102	98							91	81	82		80	96
	80			80	76	77		76
100	67	70	72
93	79	77
	79	65	69	72	51	72	78	79	76	75	77
2020											2021

(Source: SRI+ POS data by INTAGE Inc. )

■Consumer purchase price for 15 major household and personal care categories4

Index

115

110

105

100

95

90

115

111

106

100	100	101	103

Laundry detergents, Fabric softners, Dishwashing detergents, Body cleansers, Facial cleansers, Makeup removers, Hair colorants

Shampoos, Conditioners, Hair styling agents, Toothpastes, Toothbrushes, Adult incontinence products

Baby diapers, Sanitary napkins

(Year-on-year)

1.

2.

3.

4.

2015

2016

2017

2018

2019

86 major household and personal care product categories

26 cosmetics product categories

SRI+: Estimates based on POS data from approx. 6,000 retail outlets nationwide

Index with January to December 2015 as 100 (Figures for 2015 and 2016 are estimated from the ratio of SRI+ to SRI prices)

20202021/1-3

(Source: SRI+ POS data by INTAGE Inc.)

3

Kao's Main Markets in Asia, the Americas and Europe (Main Categories)

Main Markets in Asia

◆ China	: Steady market recovery with continuing year-on-year growth since 2Q/FY2020 due to success in controlling the COVID-19
◆ Indonesia	pandemic.
: Market slump due to the pandemic, with continuing shrinkage in many categories except during 1Q/FY2020, when there
	was special demand.

• Thailand : Continuing market shrinkage since 2Q/FY2020 due to the impact of the pandemic, with no signs of recovery at present.

＜Market Growth Rate (%)＞

	China (including e-commerce)		Indonesia			Thailand
	20 1Q	20 2Q	20 3Q	20 4Q	21 1Q	20 1Q	20 2Q	20 3Q	20 4Q	21 1Q	20 1Q	20 2Q	20 3Q	20 4Q	21 1Q
UV care	105	105	95	118	151						88	69	87	77	84
Sanitary napkins and panty liners	96	103	100	105	104	112	92	87	95	97	106	84	93	94	87
Baby diapers	101	105	105	105	105	110	96	94	102	103	97	86	88	88	89
Laundry detergents	92	99	96	97	111	107	98	89	91	96	102	83	93	94	90
House cleaning products											125	105	99	107	85

Source: NielsenIQ. China includes e-commerce (UV care and laundry detergents include business-to-consumer only.)

Main Markets in the Americas and Europe

Although vaccinations have begun, the pandemic continued, and the hair care market shrank in the U.S., U.K. and Germany in 1Q/FY2021. On the other hand, the hand and body lotion market continued to grow as a result of more frequent hand washing and other factors, increasing 7% compared with the same period a year earlier.

＜Market Growth Rate (%)＞

			U.S.					U.K.				Germany
	20 1Q	20 2Q	20 3Q	20 4Q	21 1Q	20 1Q	20 2Q	20 3Q	20 4Q	21 1Q	20 1Q	20 2Q	20 3Q	20 4Q	21 1Q
Hair care	104	100	99	97	97	103	79	90	90	84	109	88	95	96	89
Facial cleansers	104	102	100	101	98						105	91	93	94	90
Anti-perspirants and deodorants	106	88	92	93	89
Hand and body lotions	103	108	105	103	107											4
Source: NielsenIQ/IRI

Highlights of Consolidated Financial Results

Three months ended March 31

(Billion yen)				FY2020	FY2021		Growth %	Change
Net sales		337.8		320.6		(5.1)	(17.2)
				Effect of currency translation1	+0.6	+2.0
Like-for-like growth excluding effect of currency translation	(5.7)	(19.2)
Operating income	39.3		30.9	(21.2)	(8.3)
Operating margin		11.6%		9.7%		-	-
Income before income taxes		37.3		33.9		(9.1)	(3.4)
Net income		27.2		26.2		(3.4)	(0.9)
Net income attributable to owners of the parent		26.7		25.7		(3.5)	(0.9)
EBITDA (Operating income + Depr. & amort.)2		56.3		48.1		(14.5)	(8.1)
Basic earnings per share (yen)		55.45		53.61		(3.3)	(1.84)

1. Exchange rates: 105.96 yen/USD, 127.74 yen/Euro, 16.35 yen/Yuan
2. Excluding depreciation of right-of-use assets

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