Unicharm (8113) Q2 2025 earnings summary

Executive summary

• Net sales for the first half of FY2025 were ¥464.2 billion, down 4.8% year-over-year, with core operating income at ¥57.0 billion, down 22.0% year-over-year, mainly due to a reaction to last year's record performance and strategic investments in Asia.

• Interim profit attributable to owners of parent increased by 5.5% year-over-year, supported by improved net financial and insurance benefit income.

• Japan achieved record high net sales and profits, while overseas, especially Asia, saw declines due to reputational damage in China and market contraction.

• Overseas markets faced economic uncertainty, especially in Asia, while North America and the Middle East showed strong performance.

• The company revised its full-year forecast downward due to slower-than-expected recovery in Asia, particularly in China’s feminine care segment.

Financial highlights

• Consolidated sales: ¥464.2 billion (down 4.8% YoY); core operating income: ¥57.0 billion (down 22.0% YoY); EBITDA: ¥86.1 billion (down 10.4% YoY).

• Profit attributable to owners of parent: ¥41.8 billion (up 5.5% YoY); base EPS: ¥23.84 (up 6.3% YoY).

• Gross profit margin and sales & administrative expense rate both deteriorated year-over-year.

• Exchange rate fluctuations reduced sales by ¥10.2 billion and core operating income by ¥0.5 billion.

• Total comprehensive income fell sharply to ¥14.2 billion from ¥99.2 billion year-over-year, mainly due to negative exchange differences.

Outlook and guidance

• FY2025 full-year net sales forecast: ¥974.0 billion (down 1.5% YoY); core operating income: ¥120.0 billion (down 13.3% YoY).

• Performance forecasts revised downward due to negative publicity in China, delayed response to consumer needs, and contraction in the Asian baby care market.

• Profit attributable to owners of parent forecast at ¥85.1 billion, with basic EPS of ¥48.63.

• Recovery expected in the second half as measures to address Asian market challenges take effect.