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Japanese cosmetic group Kao cautious despite strong year

Japanese cosmetics group Kao reported a 20 percent surge in net income in 2016, lead by a strong performance in Japan and Asia, making up for the terrible yen.
Still, the cosmetics group was careful this year, citing market concerns due to the rise of anti-globalisation trends.

Last year, net income rose 20.3 percent to 126,6 billion yen (1.05 billion euros), while profits from exports rose 11 percent to 185,6 billion yen.

Kao saw a positive impact from cost reduction measures, but suffered from less than lacklustre market conditions and currency fluctuations.

Net sales slightly dropped 1.1 percent to 1 457,6 billion yens, but excluding the effect of currency translation, net sales would have increased 3.2 percent, Kao specifies in a news release.

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Where the company makes two thirds of its profit, sales grew 1.6 percent thanks to its consumer products segment including beauty care, health care and home care, thanks to the launch of new products and the enhancement of sales promotion activities.

Much like competitors including Shiseido and Kosé, Kao continues to profit from a strong rate of Asian tourists in Japan where consumers get tax breaks on “Made In Japan” beauty products.

In Asia where the company markets to the middle class, sales were slightly down, but up 13 percent on a constant exchange rate basis.

For 2017, Kao anticipates a modest sales growth of 9 percent to 1,470 billion yen, a net revenue of 138 billion yen and operational revenue of 200 billion yen, up 7.8 percent.

(Source: Fashion Network)

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