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Results announcement

“Molting” must be done without fail, no matter how much it costs time

On October 24, 2018, the revision to the consolidated earnings forecast was announced. The forecast was revised, because the wardrobe update season in this spring started earlier than usual, producing some effects on the performance of mothproofing agents, and the sales of "SHALDAN" Botanical, which is high-priced, fell below the estimate.

Sales grew but profit dropped in the first half

In the second quarter of the year ending March 2019, products with high added value, including "Shoshu-Riki" Premium Aroma and "Kaori Mushuda" Botanical, contributed to sales, although the sales of some new products did not reach the estimates. On the other hand, profit decreased due to the rises in raw material prices, the augmentation of SG&A expenses, etc. As a result, sales grew but profit dropped.

To fortify our existing business

As for the Air Care business, which is our mainstay, sales grew 103% year on year, thanks to the contribution of high value-added products, such as "Shoshu-Riki" Premium Aroma and "Shoshu-Riki" Function Plus series, although the sales of new products did not reach the estimate. In the second half, we will vitalize the bathroom market with "Shoshu-Riki" Premium Aroma for bathrooms, and meet young women's needs for deodorants outside their homes by selling the portable type of "Shoshu-Riki" for restrooms. As for mothproofing agents, we will strive to energize our market as a market leader, by reeling in new young customers with "Kaori Mushuda" Botanical.

Steady progress toward new fields and markets

In the market of nursing care goods, which is new for us, the distribution of "Yells" brand products to shops increased steadily, and in the autumn, we released the new product "Yells" Dashu-Tan deodorant paper for diapers and urine absorbing pads. In the Clear Forest business, which is our new domain, we will accelerate open innovation for business purposes with other companies and the development of original products.

Strengthening of our overseas business

In the Thai market, on which we concentrate our energy, the distribution of "SHALDAN" Kawaii Plus to shops increased gradually, but our performance did not progress as initially planned, and neither our sales nor market share reached the goal. From the second half, we will enhance in-store promotion, to popularize our brand and expand our market share.

New foothold for thermal care products

As for the Thermal Care business, we established S.T. Mycoal Corporation in July 2018, and are steadily preparing for the operation of a new factory, which is scheduled to start in April 2019. In the Japanese market, we will launch the new brand "On Style" for women who have a cold constitution, for the purpose of creating a new warming business, and in overseas markets, we will determine areas on which we will concentrate our energy and design individual strategies.

Development of systems for growth

From the year ending March 2019, we have been upgrading our manufacturing systems for cost reduction, reforming our workstyles, developing diverse organizations and global personnel, and so on under the theme "Molting" in the medium or long term for further growth, but as the earnings forecast has been revised, all of our staff shared a sense of crisis, bracing ourselves up. To live up to the expectations of shareholders, we will adjust the time axis and concrete measures for realizing highly profitable systems. We would appreciate your further support.

December 2018
Takako Suzuki
President and Chief Operating Officer