Lion Corporation (4912) Q3 2024 earnings summary

Executive summary

• Net sales and profits for the first nine months of 2024 increased 1.7% year-over-year to ¥301,159 million, with core operating income up 47.8% and operating profit up 36.7%, driven by profit structure reforms and overseas expansion.

• Profit attributable to owners of the parent rose 43.1% year-over-year to ¥12,664 million, with EPS at ¥45.67.

• An impairment loss of ¥6.2 billion was recorded from domestic fabric care production restructuring, but the full-year consolidated forecast remains unchanged.

• The period marked the final year of the Vision2030 1st STAGE plan, focusing on rebuilding the profit base and expanding overseas, especially in China.

• Portfolio revision included the sale of some pharmaceutical brands and ongoing profit structure reforms.

Financial highlights

• Net sales reached ¥301.1 billion (+1.7% year-over-year); core operating income was ¥18.6 billion (+47.8%), and operating profit was ¥17.1 billion (+36.7%).

• EBITDA rose to ¥32.5 billion (+25.0%), with the EBITDA margin improving to 10.8%.

• Gross profit increase from sales growth was ¥2 billion, with a positive product mix impact of ¥0.3 billion, including a domestic price revision effect of ¥2.8 billion.

• Total cost reduction was ¥2.2 billion, mainly from lower raw material costs.

• Profit attributable to owners: ¥12.6 billion (+43.1%); EPS: ¥45.67.

Outlook and guidance

• Full-year 2024 forecast: Net sales ¥410.0 billion (+1.8%), core operating income ¥23.0 billion (+14.2%), operating profit ¥27.0 billion (+31.7%), profit attributable to owners ¥19.0 billion (+29.9%), EPS ¥66.81.

• Forecast remains unchanged despite the impairment loss, with asset sales and further streamlining planned in Q4 to support targets.

• Annual dividend planned at ¥27 per share, marking the ninth consecutive year of increases.

• Price revisions are expected to contribute ¥4 billion this year, with a similar pace targeted for next year.

• Structural reforms in Fabric Care are expected to return the segment to profitability, with annual cost improvements of close to ¥1 billion.