Kao Corporation (KAOOY) Q2 2026 Earnings Call Prepared Remarks Transcript

The first half of fiscal 2026 was a highly significant 6-month period, demonstrating that our reforms to earning power have taken root for a shift to a profitable growth stage. In the GC business, profitability improved through the promotion of high value-added products and total cost reduction or TCR, and our gross margin recovered to above the pre-pandemic level in fiscal 2019. Operating income reached JPY 95.8 billion, a record high for the first half. Even excluding the gain on the sale of land, operating income was JPY 84.3 billion, the highest level since fiscal 2019, confirming that our underlying earning power is steadily strengthening. Based on these first half results, we have raised our full year fiscal '26 operating income forecast by JPY 8 billion to JPY 190 billion. Looking further ahead, we will strengthen our semiconductor-related business, which is capturing demand from generative AI and data centers and our Cosmetics Business, where we are accelerating global expansion as future growth drivers. President and CEO, Hasebe, will provide further details later. Now please turn to Page 6. Let me summarize our financial results for the first half of fiscal '26. Net sales increased 7.8% year-on-year to JPY 871.9 billion. On a