During fiscal 2018 (the year ending December 31, 2018), 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 domestic toiletries industry, the Lion Group’s main business domain, despite anticipated expansion in the market for high-value-added products, competition is expected to remain fierce. And although the market is expected to expand in Asia, where the Group is currently expanding its businesses, Lion forecasts an increasingly harsh environment.
Amid these circumstances, the Lion Group will continue to aim to improve corporate value as it steadily implements strategies outlined in the three-year LIVE Plan starting from 2018 under the new vision of “Becoming an advanced daily healthcare company.”
In the Consumer Products Business segment, the Lion Group will cultivate markets for high-value-added products in its mainstay businesses, working to improve its market position and strengthen profitability while planning to enter growing categories, such as products for dentures. The Group will also work to expand production capacity, especially for the oral care field, and make its production system more efficient.
In the Industrial Products Business segment, Lion will focus management resources on key areas, such as automotive and electrical/electronic products, to reinforce its business foundation. Furthermore, Lion will continue efforts to acquire new customers, particularly to cultivate new customers in its vegetable washing system business.
With regard to the Overseas Business segment, the Lion Group will continue its aggressive marketing activities, primarily in the area of personal care, seeking to expand its business and strengthen its e-commerce business. In addition, the Group will establish a new venture in the plant-derived surfactant business in Malaysia as it works to expand its business globally.
As a result of the above, consolidated results forecasts for fiscal 2018 are as follows: net sales of ¥355,000 million (up 3.6% year on year), core operating income of ¥29,000 million (up 0.7% year on year), operating income of ¥33,000 million (up 8.3% year on year), and profit attributable to owners of parent of ¥25,000 million (up 19.7% year on year).
(Preconditions for the Estimated Figures in Outlook for Fiscal 2018)
Lion adopted the following foreign exchange rates in the calculation of the aforementioned estimated figures:
¥112 = US$1.00
¥3.5 = 1.00 baht
The forecast of fiscal 2017 consolidated cash flows is as follows:
In cash flows from operating activities, Lion projects income before income taxes of approximately ¥35,000 million. Depreciation is estimated to total about ¥9,000 million.
In cash flows from investment activities, Lion plans to undertake capital expenditures of around ¥19,000 million during fiscal 2018.
The cash flows from financing activities are expected to yield an outflow of about ¥6,000 million, mainly due to cash dividends paid and the repayment of loans payable.
Based on these projections, Lion estimates that cash and cash equivalents at the end of fiscal 2018 will be up approximately ¥19,000 million year on year.