Profitability increased as a result of positive sales in oral care and pharmaceutical products, along with improvement in the business mix stemming from a greater component ratio of high-value-added products in all fields. In addition to the above factors, earnings rose sharply on lower raw material prices, cost reductions, and the effective spending on sales promotion costs.
Size of major product markets in Japan and Lion’s market position
Note: Figures for market size presented above are based on retail sales data, and do not include sales of gift packages.
Source: INTAGE Inc., SRI survey, each category. Data from January through December 2016, on the basis of sales amount.
In Lion’s main business markets, sales rose steadily in 2016, up 4%* from the previous year on higher unit sales prices due to the expansion of high-value-added products, along with an increase in sales volume, and inbound demand.
During 2016, the midpoint for the V-2 Plan, Lion reaffirmed the goal of “increasing profitability” as its highest priority, and launched high-value-added and market-creating products in growing markets.
In oral care products, sales of high-value-added products, such as SYSTEMA Haguki (the Gums) Plus Toothpaste, CLINICA ADVANTAGE Toothbrush, and SYSTEMA Haguki (the Gums) Plus Toothbrush, rose by double digits, exceeding market growth and contributing to market expansion. In beauty care products, hadakara, a body soap launched in September 2016 in which moisturizing components are hardly washed away (compared to other Lion products), has been popular with customers as a market-creating product, with sales increasing. In fabric care products, Lion introduced TOP SUPER NANOX, expanding the sales ratio for super-concentrated liquid laundry detergent, and increasing profitability. In the pharmaceutical products, as a result of an ongoing effort to promote high-value-added products, sales were steady for antipyretic analgesic BUFFERIN PREMIUM, Smile 40 Premium eyedrops, and other high-value-added items, with increases in unit sales prices. Inbound market demand (consumption by overseas visitors to Japan) grew at a slower pace compared to the previous year, but remained steady, centered on PAIR acne treatment medicine.
* INTAGE Inc., SRI survey of 38 household goods markets. Accumulated sales amount from January through December 2016, compared with the previous year.
During 2017, although gradual continued recovery is forecast for the Japanese economy, the outlook going forward is expected to remain unclear, reflecting shifts in raw material prices and currency exchange rates, geopolitical risks, and other factors. In the Consumer Products Business, the Lion Group’s main business domain, despite anticipated expansion in the market for high-value-added products, competition is expected to remain fierce. For the final year of the V-2 Plan, Lion will pursue the following four measures during 2017 in order to further strengthen its market position, and establish a resilient earnings structure less susceptible to the market environment.