Message from Our President
I would like to take this opportunity to offer our condolences to all those who lost loved ones in the novel coronavirus (COVID-19) pandemic and in the flooding disasters that have affected many areas. I wish to extend my heartfelt sympathy and best wishes to everyone who is fighting the infection or recovering from the devastation of natural calamities.
Sadly, COVID-19 remains rampant, impacting our lives and business activities drastically. Mandom Group has taken the decision to postpone for one year the start of MP-13, our new 13th Middle-Range Planning. This fiscal year we will: conduct risk management against the spread of the novel coronavirus and take prompt action; maintain financial stability in view of business expansion after conclusion of the coronavirus crisis and promote workstyle reform; promote the creation of new values and the resolution of business and management issues by positioning this year as "Pre-MP-13." We are in full preparation mode for the start next year of MP-13, "a period of reformation and challenge" to attain the goals we set in VISION2027. To this end, we are taking the following steps: revising the group-wide marketing functions to increase brand values; strengthening the overseas foundation, focusing on Indonesia; and improving productivity and enhancing corporate value through business process transformation.
Given this context, I will summarize our business results so far for fiscal the year ending March 2021. In the first half of the fiscal year, sales dropped by 24.5 % and operating profit decreased by 80.6%, which were the results of the tough blows dealt by COVID-19 across Japan and overseas. Extraordinary profit was posted on our accounts due to the sale of securities, bringing the net income attributable to owners of the parent company down by 34.8%. Looking at sales by geographical segment, revenue in Japan suffered a 18.6% decrease. With the government declaration of emergency calling for people to stay home and work from home, as well as education increasingly being delivered online and thereby reducing opportunities of people to step outdoors, the use of styling and cleansing agents dramatically declined. Compounded with this big dip in consumer demand, the record-breaking prolonged rainfall and low temperatures in July led to seasonal summer goods struggling and leading to the drop in income. In Indonesia, the nation suffered two large-scale flood disasters, on top of which the tough restrictive anti-COVID measures applied by the government meant a slump in consumption and a fall in income for Mandom of 32.1%. In the Other Overseas segment, the impact of COVID-19 was also strongly felt, mainly in Southeast Asia. Mandom's income reduced by 34.6%. As to operating profit, the decrease in sales had a big impact in each segment. Although in Japan and Other Overseas segments we were able to maintain a positive balance, Indonesia went into the red.
As to the second half of the fiscal year, we are seeing recovery that is slower than initially expected, due to the sluggishness in demand for cosmetics in both our Japanese and overseas markets. What is more, there is no clear prospect of control and end to the COVID-19 crisis in Indonesia and other Southeast Asian countries. We therefore revised our business forecast for the fiscal year. Meanwhile, in areas which are showing some upturn, we made new product launches and resumed marketing activities that had been temporarily shelved. In Japan, we will be making efforts to recover healthy sales by pushing new market-creating products such as new antibacterial brands and high-performance skincare for middle-age men.
We intend to face the storm with strength and endeavor. We hope that you will continue to provide us with your valued support.
President Executive Officer & Director