Kao (4452) Status update summary

Digital investment and efficiency

• Digital investment in FY2023 was JPY 35 billion, with a sales ratio of 2.3%, close to or above the industry average.

• Digital investment is projected to reach ¥400 billion by 2027, shifting from core systems to DX advancement.

• ROIC management focuses on operational efficiency, inventory reduction, and value creation, supported by digital tools.

• Kao's i-Lake data platform integrates data across R&D, production, sales, and HR, supporting data-driven management.

DX strategy and transformation goals

• DX is defined as creative destruction, accelerating transformation by discarding legacy systems and outdated practices.

• The goal is to become a global leader by 2027 through data-driven management, operational excellence, and enhanced customer experience.

• Four DX pillars: data-driven management, operational excellence, enhanced customer experience, and rapid global expansion.

• Employee empowerment and DX talent development are central, with a target of 3,000 citizen developers by 2027 and a company-wide skill-up program.

• Human augmentation combines digital technology with employee creativity.

Achievements and operational excellence

• DX initiatives enabled a strategic price increase of ¥25 billion in Japan in 2023 while expanding market share.

• 27 projects completed, including AI customer service, digital supply chain visibility, and high-speed automated manufacturing.

• R&D innovations include materials informatics and precision design, reducing experimental workload by thousands.

• Operational excellence projects in R&D and business processes have reduced labor and errors, saving significant time.

• Digital marketing tools and scrum methods have accelerated brand growth and market share.