Nine Months Ended September 30, 2021 (Jan. 1, 2021 - Sep. 30, 2021) [IFRS] <580KB>

Consolidated Financial Results for the Nine Months Ended September 30, 2021 [IFRS]

			November 2, 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: -

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 nine months ended September 30, 2021 (from January 1, 2021 to September 30, 2021)

(1)	Consolidated operating results
									(Percentages indicate year-on-year changes)
						Nine months ended				Nine months ended
						September 30, 2021		%		September 30, 2020		%
	Net sales	1,020,959	1.6			1,005,260	(9.4)
	Operating income	108,994	(9.2)			120,062	(20.5)
	Income before income taxes	113,509	(4.7)			119,148	(20.3)
	Net income	83,362	(4.6)			87,352	(16.9)
	Net income attributable to owners of the parent	82,070	(4.5)			85,941	(17.0)
	Comprehensive income	111,259	47.0			75,695	(18.9)
	Basic earnings per share (Yen)	172.42					178.70
	Diluted earnings per share (Yen)	172.40					178.67
(2)	Consolidated financial position
						September 30, 2021				December 31, 2020
	Total assets	1,632,789					1,665,616
	Total equity	929,915					938,194
	Equity attributable to owners of the parent	912,383					923,687
	Ratio of equity attributable to owners
	of the parent to total assets	55.9%					55.5%
	Equity attributable to owners of the
	parent per share (Yen)	1,925.35					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

Nine Months Ended September 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
3. 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
4. Number of issued shares outstanding at the end of this period (ordinary shares)

Number of issued shares including treasury shares Number of treasury shares

Weighted average number of shares outstanding during this period

Notice regarding execution of quarterly review procedures

September 30, 2021	December 31, 2020
475,000,000	482,000,000
1,120,039	1,054,019
Nine months ended	Nine months ended
September 30, 2021	September 30, 2020
476,000,663	480,925,176

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-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 7, "Qualitative Information on Financial Results for the Nine Months Ended September 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.

Nine Months Ended September 30, 2021

Qualitative Information on Financial Results for the Nine Months Ended September 30, 2021

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.

1. Description of Operating Results

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

Nine months ended September 30	2021	2020	Growth
Net sales	1,021.0	1,005.3	1.6%
Like-for-like:(0.4%)
Operating income	109.0	120.1	(9.2%)
Operating margin (%)	10.7	11.9	-
Income before income taxes	113.5	119.1	(4.7%)
Net income	83.4	87.4	(4.6%)
Net income attributable to owners of the parent	82.1	85.9	(4.5%)
Basic earnings per share (Yen)	172.42	178.70	(3.5%)

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 vaccinations progressed in countries around the world, the number of infections continue to fluctuate, and the business environment remained unclear.

During the period from January to September 2021, the household and personal care products market in Japan, which is the Kao Group's key market, began to show signs of recovery but shrank due to repeated resurgences of infections and the absence of the increase in demand that arose in the previous year. In addition, the cosmetics market shrank, and recovery lacked force due to the substantial impact of the state of emergency, which continued in various regions of Japan.

Amid these circumstances, net sales increased 1.6% to 1,021.0 billion yen. On a like-for-like basis, net sales decreased 0.4%. Operating income was 109.0 billion yen, a decrease of 11.1 billion yen, and income before income taxes was 113.5 billion yen, a decrease of 5.6 billion yen. Net income was 83.4 billion yen, a decrease of 4.0 billion yen.

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Nine Months Ended September 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	Third quarter
	Jan. - Mar.	Apr. - Jun.	Jul. - Sep.
U.S. dollar	105.96	(108.95)	109.47 (107.54)	110.09	(106.17)
Euro	127.74	(120.18)	131.90 (118.41)	129.78	(124.05)
Chinese yuan	16.35	(15.61)	16.95 (15.18)	17.01	(15.34)

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 15, "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 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.

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Nine Months Ended September 30, 2021

Consolidated Results by Segment

														(Billions of yen)
				Net sales			Operating income			Operating margin (%)
					Growth	Like-for-
Nine months ended September 30		2021	2020	%	like %		2021	2020			Change		2021	2020
	Hygiene and Living Care	357.2	367.2	(2.7)	(4.0)	41.1	55.9			(14.8)	11.5	15.2
	Business
	Health and Beauty Care	261.2	269.7	(3.2)	(4.8)	41.3	47.4			(6.1)	15.8	17.6
	Business
	Life Care Business	38.1	37.6	1.4	1.1	2.5	3.2			(0.7)	6.5	8.5
	Cosmetics	165.9	160.3	3.5	0.8	0.1	(7.3)			7.4	0.1	(4.5)
	Business
Consumer Products Business	822.4	834.8	(1.5)	(3.1)	85.0	99.3			(14.3)	10.3	11.9
Chemical Business	228.0	199.3	14.4	11.0	23.3	20.7			2.7	10.2	10.4
Total	1,050.3	1,034.1	1.6	(0.4)	108.3	120.0			(11.6)	-	-
	Elimination and Reconciliation	(29.4)	(28.9)	-	-	0.7	0.1			0.6	-	-
Consolidated	1,021.0	1,005.3	1.6	(0.4)	109.0	120.1			(11.1)	10.7	11.9

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