Lion Corporation (4912) Q2 2024 earnings summary

Executive summary

• First-half 2024 sales and profits increased year-over-year, surpassing forecasts, driven by strong overseas growth, especially in China and Malaysia, and successful domestic price increases.

• Core operating income rose 50.2% year-over-year, supported by price pass-through, cost reductions, and capital gains from brand sales.

• Profit attributable to owners increased 131.0% year-over-year to ¥9,931 million.

• The period marked the final year of the current medium-term plan, focusing on rebuilding the revenue base and expanding overseas operations.

• Consumer products saw growth in oral care and pharmaceuticals, while fabric care declined due to a reactionary downturn from last year's launches.

Financial highlights

• Net sales reached ¥198.6 billion, up 3.0% year-over-year; constant currency growth was 0.2%.

• Core operating income was ¥9.55 billion, up 50.2% year-over-year.

• Operating profit was ¥13.36 billion, up 113.9% year-over-year.

• Profit attributable to owners was ¥9.93 billion, up 131.0% year-over-year; EPS was ¥35.76, up 136.5%.

• EBITDA rose to ¥18.6 billion, up 25.0% year-over-year, with EBITDA margin improving by 1.6 points to 9.4%.

Outlook and guidance

• Full-year 2024 forecast unchanged: net sales ¥410.0 billion (+1.8%), core operating income ¥23.0 billion, operating profit ¥27.0 billion (+31.7%), EPS ¥66.81 (+29.9%).

• Dividend forecast raised to ¥27 per share, marking the ninth consecutive year of increases; total return ratio expected to exceed 90%.

• Focus on portfolio reforms, SKU reduction targeting a 30% cut by 2027, and expansion in high-value-added products and overseas markets.