Overseas Business

Net sales rose from the previous fiscal year, due mainly to firm results in major overseas markets including Thailand and South Korea, along with the inclusion of Malaysian company Southern Lion Sdn. Bhd. in the scope of consolidation. Operating income also increased, mainly as a result of improvement in the business mix following expansion of personal care products (combined oral care and beauty care), greater efficiency in the usage of expenditures to enhance competitiveness, and cost reduction measures, as well as a decline in raw material prices.

Percentage of Consolidated Net Sales*

25.1% (Sales to outside parties)

Net Sales*/Operating Income

Net Sales (Sales to outside parties): ¥99.2 billion / Operating Income: ¥4.5 billion

Market Environment and Business Results in 2016

Revenue and earnings growth exceeded rises in national GDP, boosted by the effects of weaker local currencies.

Lion achieved greater profitability in overseas markets through proactive marketing investments to strengthen brands, along with expansion of the personal care products in mainstay markets such as Thailand, South Korea, Malaysia, and China, with particularly sharp year-on-year gains in all markets for global brand Systema toothbrushes. In China, “modern store” sales through supermarkets and chain stores in urban areas declined, but sales through e-commerce channels continued to expand. Of note, Lion withdrew from the Philippine market, which it had entered in 2013, because of delays in establishing a stable business track.

Strategy for 2017

Lion will further expand its market position as part of the final effort to complete the V-2 Plan (Vision 2020 Part-2). We will further develop and strengthen the global brands Systema, Shokubutsu Monogatari, and KODOMO, and, through accelerating the shift to personal care products, will work to enhance profitability and achieve sustainable growth. We will also strengthen the e-commerce business, and further expand e-commerce in China, applying that know-how in other markets. Further, Lion will continue to explore new areas for market entry.

 

Regional Reports

Thailand

Sales Growth Rate
(Year on year, All on a local currency basis)
+9%
Review of 2016

Lion’s businesses in Thailand are oral care, beauty care, fabric care, and living care.

In oral care, Lion continued to develop the Systema and SALZ brands. Toothbrush sales were particularly favorable, with a sharp increase in Lion’s market share on the expansion of the production lineup with the launch of new Systema products in a higher price range. In beauty care, sales were favorable for new Shokubutsu Monogatari body soap. Exports to neighboring countries were also firm, and overall sales rose year on year on a local currency basis.

Strategy for 2017

Lion will aim to establish the leading market share in personal care products (combined oral care and beauty care). In oral care, we will continue to nurture the development of products in the growing high price range segment and introduce new items. In beauty care, we will continue to introduce new products for the expanding body soap market, accelerate the shift to the personal care field, and strengthen our foundations for growth. In fabric care, we will pursue added value in liquid laundry detergents and other products, and enhance profitability.


SYSTEMA
Toothpaste

SYSTEMA
Toothbrushes

Shokubutsu Monogatari
Body soap

Malaysia

Sales Growth Rate
(Year on year, All on a local currency basis)
+14%*1
Review of 2016

In oral care, sales of the new Systema toothbrushes were favorable, with positive sales in beauty care for Shokubutsu Monogatari body soap. In fabric care, Lion proactively launched new and improved products for Top and other major brands, maintaining its leading market share*2 in the laundry detergent market. Sales in the oral care, beauty care, and fabric care segments achieved double-digit growth.

Strategy for 2017

Lion will continue to actively introduce new and improved products for core brands, and continue its business development measures. In mainstay fabric care, we will maintain our top market share in the laundry detergent market, and further increase earnings. At the same time, we will expand personal care products, seeking to strengthen the business base and improve profitability.


Top
Liquid laundry detergent

Top
Powdered detergents

Systema
Toothbrushes

*1 Excluding Lion Eco Chemicals Sdn. Bhd.

*2 Source: Lion

South Korea

Sales Growth Rate
(Year on year, All on a local currency basis)
+13%
Review of 2016

Lion’s businesses in South Korea are oral care, beauty care, fabric care, and living care.

In beauty care, sales rose sharply for Ai-Kekute*3 hand soap on the launch of an improved product and promotional activities. In fabric care, a proactive promotional campaign led to favorable sales of Beat liquid laundry detergent. Both the beauty care and fabric care segments posted double-digit growth. Earnings in South Korea rose overall, owing to initiatives in high-margin sales channels, streamlining of promotional expenditures, cost-reduction measures, and lower raw material prices.

Strategy for 2017

Lion will continue marketing investment to enhance brand value and our market position in mainstay categories such as laundry detergent, hand soap, and dishwashing detergents. We will also work to establish a foundation for the future, including further development of the pharmaceutical business, which we entered in 2016, and initiatives for growth channels.


Ai-Kekute
Hand soap

Beat
Liquid laundry detergent

*3 Sold under the brand name KireiKirei in Japan

China

Sales Growth Rate
(Year on year, All on a local currency basis)
+23%
Review of 2016

Sales were positive for the newly launched Systema toothpaste and toothbrushes. In the growing e-commerce business, along with products in oral care, sales increased for hand soap and laundry detergent. Lion’s e-commerce sales in China increased 59% from the previous fiscal year, accounting for around 47% of net sales, and contributing to the expansion of the Chinese business overall.

Strategy for 2017

As the foundation of oral care, Lion will continue to develop existing products, introduce new products, and take other measures for continued business expansion. In addition to marketing investments, we will also launch products tailored to regional characteristics, upgrade our sales structure, and take other steps to strengthen this business field. Lion will further expand the growth in e-commerce business, broaden the scope of the Chinese business, and enhance profitability.


Systema
Toothpaste

Systema
Toothbrushes

KireiKirei
Hand soap

Taiwan

Sales Growth Rate
(Year on year, All on a local currency basis)
-18%

Lion established a wholly owned subsidiary in Taiwan to strengthen sales and marketing activities, and expedite management decision making. This subsidiary commenced operations in January 2016. We are shifting the focus of our business from detergents to personal care products, and are achieving positive results in oral care and pharmaceuticals by conducting successful marketing investments tailored to the local market. During 2017, Lion will continue to expand business in health care products, and enhance profitability.


NANOX
Liquid laundry detergent

Systema
Toothbrushes

Hong Kong

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

In fabric care, Lion posted positive sales for the renewed Soflan Aroma Rich fabric softener. In oral care, toothbrush sales rose steadily on proactive campaigns and promotional activities. During 2017, Lion will continue to strengthen development of high-value-added products, and enhance profitability.


NANOX
Liquid laundry detergent

Aroma Rich
Fabric softener

Singapore

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

In fabric care, Lion launched NANOX super-concentrated liquid laundry detergent, achieving positive sales of liquid laundry detergents overall, including regular types. During 2017, Lion will solidify its market position in each category, including dishwashing detergents, oral care, beauty care, and laundry detergents. We will expand our market share, and increase sales in high-margin categories.


NANOX
Liquid laundry detergent

Indonesia*4

Sales Growth Rate
(Year on year, All on a local currency basis)
+19%

In oral care, sales of new toothbrush products were positive, with a considerable year-on-year increase in sales overall. In beauty care, shampoo sales increased, with significant growth for the expanded lineup of deodorant body sprays. In living care, effective promotional activities for the dishwashing detergent mama resulted in a sharp rise in sales. During 2017, Lion will introduce high-value-added products to meet the needs of the growing middle class, maintain business growth, and enhance profitability.


Systema
Toothbrushes

mama
Dishwashing detergent

*4 Equity-method affiliate

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