Kao (4452) Status update summary

Digital investment scale and strategy

• Digital investment in FY2023 was JPY 35 billion, with a sales ratio of 2.3%, aligning with or exceeding the global industry average of 2.5%.

• Digital investment increased from ¥220 billion in 2010 to a projected ¥400 billion in 2027, with future plans for moderate total growth and aggressive DX expansion.

• Investment in core systems like SAP S/4HANA will decrease by 2027, while DX investment will rise.

Return on digital investment and operational efficiency

• ROIC management focuses on reducing operational costs, inventory, and workforce optimization through digital initiatives.

• Data-driven management is enabled by the Kao i-Lake platform, integrating data across R&D, production, sales, and HR.

• Strategic price increases, such as ¥25 billion in Japan in 2023, and improved decision-making are enabled by digital tools.

Competitive advantage and human capital

• Kao's i-Lake data lake, developed over 30 years, is central to its DX strength and global standardization.

• Human capital development includes company-wide DX skill programs and over 3,000 citizen developers, with plans to double by 2027.

• 90% of 13,000 employees have completed Level 1 of the DX Adventure Program.