Overseas Business

22.3% (% of consolidated net sales, sales to outside parties)

Sales in fiscal 2014 showed a major increase over the previous year because of the favorable performance of oral care products and body soaps in Thailand and oral care products in China. Operating income was below the level of the previous year because of investments for future business expansion.

Net Sales

¥81.7 billion (12.5% up) sales to outside parties

Operating Income

¥1.1 billion (20.0% down)

Market Environment and Review of Performance in Fiscal 2014

In fiscal 2014, sales were positively influenced by the decline in the value of the yen and rose 12% (6.0% after excluding the effects of foreign currency fluctuations). Thailand, Hong Kong, and certain other countries experienced political instability, and the growth of the Chinese economy slowed; however, sales in the personal care field, which were targeted mainly at the growing middle-income classes principally in Southeast Asia, showed increases. In addition, sales growth in Thailand recovered in the latter half of the fiscal year and made up for weaker performance in the first half. In China, sales of oral care products were favorable and sales via the Internet expanded.

In the Overseas Business segment, in the mainstay fields of oral care, laundry detergents, and other products, Lion pursued aggressive marketing activities and expanded its global brand items, including Systema, TOP, KireiKirei, and Shokubutsu Monogatari, focusing on increasing the scale of its business activities. Moreover, Lion is adding to its production capacity step by step, and, in 2014, began operations at a new oral care products plant in China.

Strategy for Fiscal 2015

In fiscal 2015 also, Lion is raising its presence in Asia and working to bolster its earnings base. Principal initiatives include tapping into the rising demand in the middle-income classes, further nurturing its global brands, and taking further measures to strengthen its personal care brands, while also working to expand sales and improve its mix of businesses. Also, drawing on the capabilities of efficient production facilities, Lion is working to strengthen its business base and increase its cost-competitiveness. In the Philippines, where it began business activities in fiscal 2013, Lion is working to expand its operations there and is also working to expand the customer base of its MES business, with the aim of realizing a return on the investments for future growth it has made in that country.

Regional Reports

Thailand

Sales Growth Rate:
(Year on year, on a local currency basis)
+5%
Review of Fiscal 2014

Lion's business activities in Thailand include oral care, laundry detergents, shampoo, body soap, kitchen detergents, and other products. Lion's sales in Thailand are the largest among the overseas businesses where it has a presence.

In Thailand, sales of Systema toothbrushes and Shokubutsu Monogatari body soap, in which Lion has focused its promotional activities, were favorable. Moreover, sales of toothpaste, where Lion continued promotional activities, and sales of conventional powdered laundry detergents were favorable. Although there were signs of deterioration in consumer confidence and slowing of markets where Lion has a presence, in the latter half of the fiscal year, sales growth recovered, and overall sales were above the level of the previous fiscal year, even when converted to yen.

Strategy in Fiscal 2015

In its mainstay brand lines of oral care and laundry detergents, Lion is launching additional high-value-added products based on new technology and incorporating new materials, while also further developing the toothpaste business through advertising and other promotional activities. In both the mainstay oral care and laundry detergents businesses, Lion is working to increase profitability.


Pao
Laundry detergents

Systema
Toothbrushes

Shokubutsu Monogatari
Body soap

South Korea

Sales Growth Rate:
(Year on year, on a local currency basis)
-4%
Review of Fiscal 2014

In South Korea, Lion is developing its business operations in the fields of laundry detergents, oral care, kitchen detergents, hand soaps, and other items. In fiscal 2014, sales of newly introduced Systema brand oral care toothpaste and toothbrushes for removal of tartar, Beat liquid laundry detergent, and a new product in the hand soap lineup, Ai-kekute (sold under the KireiKirei brand in Japan), were favorable. However, sales of kitchen detergents were sluggish. Overall sales were below the level of the previous year, but, because of foreign currency fluctuations, sales converted to yen were significantly higher than in the previous year.

Strategy in Fiscal 2015

In South Korea, Lion has positioned improving profitability and strengthening of its mainstay brands Beat, Ai-kekute, Systema, kitchen detergent Cham Green, and other items as priority business themes. Lion will work to raise its position in the market through the introduction of high-value-added products, emphasizing business in growth markets, and expanding sales through new channels, including e-commerce.


Ai-kekute
Hand soap

Beat
Liquid laundry detergent

Systema
Toothbrushes

China

Sales Growth Rate:
(Year on year, on a local currency basis)
+22%
Review of Fiscal 2014

Sales of Systema brand toothbrushes were favorable, and newly introduced Systema toothpaste was well received by consumers. In addition, sales through e-commerce channels and imported Japanese products increased. Therefore, overall sales were substantially higher than in the previous fiscal year, and, even converted to yen terms, showed major increases. Lion completed a plant for manufacturing oral care products in 2014 and began operations there in April. As a result, production capacity has increased about threefold, and Lion was able to increase production as scheduled.

Strategy in Fiscal 2015

In China, Lion will continue to concentrate on oral care products, implement strategies to expand its geographical coverage and sales channels, introduce products suited to the characteristics of particular regions, upgrade its marketing systems, and work to increase the scale and profitability of business activities. Due to the start-up of the new production plant, Lion will be positioned to respond to growing demand for oral care products in China. Also, Lion will optimize its production systems for oral care products in northeast Asia, realize further synergies, and accelerate product development.


Systema
Toothbrushes

Systema
Toothpaste

New production plant

Taiwan

Sales Growth Rate:
(Year on year, on a local currency basis)
-2%

In the fabric care field, Lion introduced NANOX detergent in May, and sales rose above the previous year, but, in the oral care field, sales were stagnant. As a consequence, sales for the full year were below the previous fiscal year. Lion is aiming to increase profitability by strengthening its position in the health care field and through implementing strategies suited to each market channel.


NANOX
Liquid laundry detergent

Hong Kong

Sales Growth Rate:
(Year on year, on a local currency basis)
+5%

In the fabric care field, sales of NANOX superconcentrated liquid laundry detergent were favorable. Also, in the oral care field, as a result of the continuation of promotional activities, sales of Systema toothbrushes held firm. Overall sales in Hong Kong were above the previous year in both local currency and yen terms.


NANOX
Liquid laundry detergent

Singapore

Sales Growth Rate:
(Year on year, on a local currency basis)
+3%

Lion successfully launched new products in the Systema series of oral care products; the TOP lineup of powdered detergents in the fabric care business; in the KireiKirei series of foaming hand soaps in the beauty care business; and in its body soap lineup. As a consequence, overall sales in local currency and yen terms were above the previous fiscal year. For each product category, Lion will implement sales promotion activities, including effective in-store promotions, to consolidate its position as the leading brand and expand sales of high-margin products.


Top
Powdered detergents

KireiKirei
Foaming hand soap

Philippines

Sales Growth Rate: Since business activities in the Philippines began during fiscal 2013, comparable data is not available for the previous fiscal year.

Lion began sales of oral care products in July 2013 and beauty care products in September 2013. In fiscal 2014, Lion implemented active advertising and other promotional activities to increase the awareness of its new brands. Along with the expansion of the middle-income classes, sales of high-value-added shampoo and toothpaste are increasing. Lion will invest in advertising and promotional activities and expand distribution to retail stores to increase sales and raise profitability.


ph_philippines1

HANA
Shampoo

ph_philippines2

Systema
Toothpaste

Malaysia*1

Sales Growth Rate:
(Year on year, on a local currency basis)
No Change*2

In the oral care business, sales of Systema toothbrushes were favorable. In the fabric care business, Lion maintained the No. 1*3 market share in fiscal 2014, but sales were unchanged from the previous fiscal year. Lion will work to strengthen its No. 1 position in the laundry detergents market and, in the health care business, will strive to expand its product lineup and implement other measures to strengthen its business base and increase profitability.


Top
Powdered detergents

Systema
Toothbrushes

*1 Company accounted for under the equity method

*2 Excluding Lion Eco Chemicals Sdn. Bhd.

*3 Results of Lion's research

Indonesia*

Sales Growth Rate:
(Year on year, on a local currency basis)
+16%

In the first half of fiscal 2014, there were signs of a slowing trend in the markets where Lion has a presence, but, in the living care field, sales of Lion's dishwashing detergent Mama were favorable. In addition, in the beauty care field, sales of an improved version of emeron shampoo and sales in the oral care field of toothbrushes held firm. Sales in both local currency and yen terms were above the previous fiscal year. Lion also introduced high-value-added products to respond to demand from the growing middle-income classes of consumers, with the goals of maintaining growth and increasing profitability.


Mama
Dishwashing detergent

emeron
Shampoo

*Company accounted for under the equity method

Link to Overseas Affiliates list: http://www.lion.co.jp/en/company/group/global/