Kao will not return to growth in 2023. The manufacturer of active ingredients for the cosmetics industry has reported a drop in sales in 2023 in a context of a slight economic recovery in China.
The Japanese company has reported a 1.2% decline in sales due to the Covid-19 crisis in China, which has continued to simmer over the past year. The manufacturer has also blamed the low growth on geopolitical conflicts in Europe and the Middle East as well as rising raw material prices and inflation in general, which it claims affected sales.
Sales of Kao's cosmetics division declined by more than 5% to a total turnover of 238.6 billion yen. Make-up sales also fell, while the Health and Beauty Care Business segment did increase in sales by up to 6.3%. This growth was led especially by higher sales in the skin care and hair care segment.
On the other hand, Kao has reorganised its business and commercial structure and this has also generated negative revenues. One of the moves made during 2023 was the creation of a new organisational structure for its Functions & Operations business. The objective of the creation of this area is to strengthen business growth in the Americas, Europe, Middle East and Africa regions.
The Japanese manufacturer expects an optimistic year ahead, forecasting a year-on-year increase of 3.1% and net sales of 1.58 billion yen. As for its business areas and divisions, it expects an increase in the 'Health and Beauty Care Business', led by skin care, hair care and personal care. As for the cosmetics business, it will continue to pursue its goal of building strong brands and consolidating its position in the beauty market.