Unicharm (8113) Q4 2023 earnings summary

Executive summary

• FY2023 sales, core operating income and profit attributable to owners of the parent reached record highs; sales rose 4.9% YoY and core operating income rose 7.0%.

• Growth reflected value-added product launches, price pass-through and demand recovery, while higher sales and improved profitability offset cost pressures.

Financial highlights

• Sales were ¥941.8bn, up 4.9%; core operating income was ¥128.0bn, up 7.0%, with a 13.6% margin, up 0.3 percentage points.

• Profit before tax was ¥132.3bn, up 14.3%; profit for the period was ¥98.0bn, up 25.0%; profit attributable to owners of the parent was ¥86.1bn, up 27.3%.

• EBITDA was ¥179.1bn, up 10.9%; sales rose for a seventh consecutive year. FX added ¥24.1bn to sales and ¥3.1bn to core operating income.

• FY2023 results were below forecasts for sales by ¥21.7bn, core operating income by ¥13.0bn and PBT by ¥5.2bn; attributable profit exceeded forecast by ¥5.2bn.

Outlook and guidance

• FY2024 guidance: sales ¥1,006.0bn (+6.8%), core operating income ¥144.0bn (+12.5%), PBT ¥144.0bn (+8.8%) and attributable profit ¥90.0bn (+4.6%); sales and core operating income targeted at all-time highs.

• Guidance assumes gross margin improvement of 1.4 percentage points and core operating margin improvement of 0.7 points, despite a 0.7-point increase in SG&A expense rate from DX, R&D and labor costs.

• Japan sales are forecast to grow 5–7% with profit declining; overseas sales are forecast to grow 6–8% with profit increasing. FY2024 capital investment is planned at ~¥45bn, with depreciation of ~¥42bn.

• The 2024–2026 plan targets FY2026 sales of ¥1,150bn; strategy includes high-value hygiene products, DX, China recovery, growth in India and Southeast Asia, and pet-care expansion in North America and Asia.