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Lion Corp
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This is Lion Corporation. I would like to thank you for your precious time despite your busy schedule. I also now like to thank you for your continuing special support for our IR activities.
Now allow me to explain the results for the first 9 months of 2022. I will use the materials we disclosed today for my presentation. I assume you have the presentation materials at your hand, and I will specify the page in my explanation, so please refer to the materials. Now I'll begin my explanation.
First, please turn to Page 4. This shows the highlights for the third quarter results January through September. Net sales for the third quarter grew but core operating income on profit declined. So following in the first and second quarters, we continued the trend of increased sales and decreased profit year-on-year.
Net sales in the domestic Consumer Products business, Overseas business and Industrial Products business, each segment grew in sales. As for core operating income, moving into the third quarter, the impact of rising raw materials costs expanded despite our efforts such as the price increase and making our promotional activities more efficient as well as price pass-through and cost reduction efforts, our profit declined year-on-year.
Operating profit and profit for the period attributable to owners of the parent also declined year-on-year, mainly due to the decline in core operating income.
Now Page 5. This is the same format we always use to show the market trends in Japan for major domestic Consumer Products. Top left shows oral care. This market continued to grow firmly, thanks to the price increase driven by high values offered by toothpaste and toothbrushes.
Beauty care, the center in the top. Hand soap shows a little decline from the previous year. But this is a reaction from the last year. And compared with the pre-COVID year, the market maintained the level of about 1.3x.
As for fabric care, right. The market continued to expand, driven by the enlarged refills. All particular interest goes to laundry detergents, which are maintaining the trend of unit price increase since the second quarter.
Now going to the bottom left, living care. This market showed a slight decline in dishwashing detergents. Core product due to a reaction from the demand created during the stay-at-home phenomenon with COVID. The market is slightly slowing down.
Lastly, pharmaceuticals, the center in the bottom. The main antipyretic analgesics shows a decline slightly due to a reaction from the rapid demand created in the latter half of last year. But for January through September period, our steady market expansion was observed going above the last year.
Next, Page 6. This shows the situation overseas for the major countries and major categories. As for the toothbrushes, left and laundry detergents, right, we are observing consumption recoveries in those countries, resulting in market recoveries.
Even in South Korea, where the toothbrush recovery was somewhat slow, is now showing going above the last year for January through September period.
Hands soap in the center, it declined due to a reaction from the last year. But compared with the pre-COVID situations, each country is now 1.5x to 2.0x higher, indicating now hand washing has become a regular habit and this market has become stable.
Now Page 7. Now Lion's consolidated financial results against such a backdrop. Net sales was JPY 286.1 billion, up 6.9% or up JPY 18.5 billion year-on-year. Excluding the FX fluctuations, it grew 3.9% in substance.
Core operating income was down JPY 8.1 billion year-on-year. It was 6% of net sales or down 3.5 points year-on-year.
Operating profit includes the gain from the land sold in the first quarter this year. As for EBITDA, it was JPY 28.7 billion, down JPY 6.8 billion year-on-year. EBITDA margin was 10.1%, down 3.2 points year-on-year.
Next slide, Page 8. Here, I will explain the core operating income changes year-on-year. First, growth side. Changes in the sales and the changes in segment competition and others resulted in JPY 1.4 billion. This comes from the combination of increased sales, segment competition changes and increased depreciation and amortization. All combined, it was up JPY 1.4 billion. Total cost reduction was JPY 1.7 billion.
As for negative factors, increase in the prices of raw materials pushed down the profit by JPY 9.4 billion. It was JPY 5.5 billion up to the second quarter, so its impact became larger in July through September period.
Also due to the now starting operation of the mission-critical systems, cost for depreciation, amortization and others and SG&A increased resulting into a growth in others expenses. All in all, core operating income was down JPY 8.1 billion year-on-year.
Page 9, please. At the time of the second quarter briefing, we stated that in the beginning of the year, we were assuming about JPY 6 billion increase for raw materials. But it further went up by JPY 7 billion from the original assumption. So for the full year basis, we are now assuming for the increase of JPY 13 billion.
So here we are showing the details of JPY 7 billion increase as of September. The actual numbers for January through September are shown in the parenthesis. Please look at those numbers.
The raw materials and price increase became a factor pushing down our original forecast by JPY 3.7 billion in terms of profit. By increasing prices, reviewing promotions as well as additional cost reductions, we will aim at our full year target. But in terms of the cumulative results until the end of September for the third quarter, we are somewhat behind in implementing the planned measures. So we will strengthen our efforts to review sales promotion measures as well as substantial price pass-through actions moving toward the fourth quarter.
Next Page 10, please. And here, I will explain our performance by segment. Net sales consists of 2 lines, as you see here. The upper line shows the total net sales and the lower line shows the sales to external customers. Consumer Products, oral care and beauty care, hand soaps and others grew. So we were able to secure growth in sales.
But when it comes to the segment profit, as I mentioned earlier, with the expanded impact of the increased prices of raw materials and increased depreciation and amortization from the new factory, profit was pushed down.
Industrial Products grew 9.9% in sales, driven by a good business with carbons and others for automotive batteries in the chemistry (sic) [ Chemical ] business. And this field, being able to absorb some of the impacts from the increased price of raw materials, the segment profit was able to grow year-on-year, though the growth was somewhat small.
Overseas business shows declines both in sales and profit. I will explain the details by region later.
So let's look at the domestic Consumer Products business, net sales by product category. In oral care, toothpaste, toothbrush, and dental rinse were all favorable, especially high value-added new products contributed and net sales increased by 4.3% year-on-year.
In beauty care, hand soap and foam type of body soap were strong. Net sales grew by 7% year-on-year.
In fabric care, major brand of laundry detergent, NANOX and SOFLAN Aroma Rich fabric softener grew in sales while bleach struggled. Overall, net sales were almost flat year-on-year.
In living care, shrinking market impacted dishwashing detergent. And overall, net sales declined year-on-year.
In pharmaceuticals, with market expansion and new product launch, our major product antipyretic analgesics continued to expand its sales. But overall, net sales declined year-on-year as other product sales decreased. In other, net sales grew with higher sales of manufacturing subsidiary within the group.
Page 12 shows Overseas business results. Net sales in Southeast Asia grew by 19.2%. On a constant currency basis, excluding ForEx fluctuations, growth was 9.1%. Recovery in Thailand was delayed, but we started to see some improvements. As market was weak, we enhanced sales promotion in local areas, mainly for detergent, which led to higher sales.
In Malaysia, resumption of storefront events and others contributed to realize major net sales growth. Because of the high product composition of household products, major cost increase led to lower core operating income. Overall net sales in Northeast Asia grew by 16.6%. On a constant currency basis, excluding ForEx impact, growth was 5%.
In China, change of e-commerce vendor led to temporary lower e-commerce sales, but it was offset by off-line sales increase. With lower export to the group, the total net sales in China decreased, but external sales increased year-on-year.
As for Korea, in addition to the hand soap and the laundry detergent increase, the overall sales grew significantly year-on-year.
Next, let me talk about our fiscal 2022 financial forecast. Turning to Page 14. 2022 full year consolidated financial forecast remains unchanged from the start of the year. We would increase sales in Q4 and as I explained earlier, we will take measures to absorb the impact of the raw material prices and aim to achieve the target set at the beginning of the year.
We will try to go back to the targets set in our medium-term management plan this year and next year and onwards.
Four measures were explained in August, and let me now make some comments on the progress so far.
First, is to accelerate the introduction of high value-added products. In oral care, in August, we launched Clinica Pro high-price range product, which has been growing steadily.
On the next slide, I will make some additional comments on toothpaste.
Second, is to revise profit structure by reshuffling the business portfolio. We enhanced the management of ROIC to promote the more decisive use of expenses and to shift to more efficient business structure. And we would also consider the integration as well as we saw of the low-profit businesses.
And the third is to increase sales prices, revise special prices and frequencies and others. We will continue with this measure. For Overseas and Industrial Products business, we have managed to reflect some of the higher material costs to the sales prices. In Japan, we would also work on the increase of the unit price through the improvements and also review the sales promotion, so that we can focus more on the price -- the control of the price-focused sales promotion.
The fourth is the additional cost reductions and cost streamlining. We will continue to take additional measures so that we can make group-wide efforts to promote this by strongly promoting those measures, we will build the foundation that is resilient to the future changes of the business environment and aim to achieve targets of not only this fiscal year, but also for the next fiscal year and onward.
Next page shows some additional explanation on the oral care. This is an example where we conducted the launch of the high value-added products as well as the improvement of the efficiency of promotional expenses at the same time. In toothpaste, we launched Systema Haguki Plus in February and in August, we launched Clinica Pro high-end products. And this pushed up the average unit price. And we are also reviewing the sales promotion of the low-end products. The graph on the left shows the chronological change in the long term.
You can see that the portion of the total sales value from high-end products has exceeded that of mid-priced products. The orange line represents a low-end products. And if you can look at the far right of this orange line in Q3, we intentionally reduced the ratio of the low-end products.
Based on our research, frequency of special sales of low-end products mentioned in retailers' flyers were reduced to about 70% of last year. So as you can see, within the same item, we are shifting toward high-end or higher-margin products. And as a whole, we are improving the volume and the market status and promote the high value-added products.
Lastly, about shareholder returns. The forecast is unchanged from the beginning of the year. We aim to increase the annual dividend by JPY 1 to JPY 25 per share, realizing seventh consecutive year of increase. Recently, the operating income has come down in the short term, but we would continue with our basic dividend policy to return profits to shareholders on a continuous and stable basis. Although difficult situation is expected to continue, we would endeavor in achieving full year targets, and we ask you to continue to support us. That concludes my presentation. Thank you for your attention.
Now I would like to move into the question-and-answer session. First, I would like to have Mr. Miyasako, Jefferies Securities.
This is Miyasako, Jefferies Securities. If I may, on Page 9, you mentioned you missed the forecast you had indicated in the first half. If that's the case, I appreciate if you could expand on how much you missed in Q3? And what areas you missed? Then what's going to happen to Q4?
Well, let me explain. Back in August briefing for the financial performance, we mentioned the cost will further increase by JPY 7 billion. And we intend to write it off by achieving those positive numbers, JPY 5.2 billion from controlling the sales promotion and JPY 3.5 billion from reducing cost. I was explaining our [ position ] to try to make it 0 by the end of the year. And the numbers you see in the bracket indicates the actual numbers by the end of September.
Simply stated, while I wish to make JPY 7 billion impact 0, again, it is going to be a matter of the simple calculation. As of now, we are still behind as much as JPY 800 million. So this is what we need to work in the fourth quarter. That's what I tried to explain to you. Again, I'd like to offer my apologies. Maybe I was not that clear.
If I may, I would like to further ask you where you are behind?
Well, vis-a-vis our [ own ] forecast, segment competition deteriorated to some extent. And we were not fully up to the point in [ real ] to our planned control for the sales promotion cost. Well, I hope you understand that this is going to be a part of the negotiation process. So we hope we will get results going forward. But as of now, we are somewhat behind.
I appreciate if you could further expand on the background, why you are behind in terms of the segment competitions and controlling sales promotion costs.
Segment competition was affected by the foreign exchange. Here, we need to look at the economic recovery in each country. For example, South Korea grew more than we had expected. Another factor is that our domestic sales of Consumer Products did not grow as we had hoped, partly due to the ongoing efforts in controlling sales promotions. So all in all, the segment competition changes got behind a little bit than we had expected.
How about the in the background why are you behind in terms of your controlling sales promotions?
This is also having to do with the Consumer Goods business in Japan. We are now engaged in a series of negotiations with the retailers, trying to improve sales promotion conditions for toothpaste in the low-end price and also to reduce the frequency of the special sales of household and fabric care-related products in the low-end price range. So actually, we are working on these efforts one by one with retailers.
What is the reason for the delay?
Yes, it is a matter of negotiation. So things do not go so quickly.
I see. Are there any changes in consumption due to the price increase or inflation?
I would say on the consumers, we have to -- well, I would say consumers do not have choice, but in accepting the price increase, to some extent, though it is not as strong as that for the food products. Though it is a general theory, but just controlling sales promotion expenses will not necessarily cause our sales to stop all of a sudden. So this is the kind of situation we see ourselves. I hope you understand this.
Next, I would like to have Mr. Kuwahara from JPMorgan Securities.
This is Kuwahara of JPMorgan Securities. Can you hear me? One question for me. I'm also looking at Page 9. Please let me know if I understood you correctly. First of all, it says that impact of raw materials price hikes is JPY 3.7 billion down as of the third quarter. And if this continues, you will be behind your forecast as much as JPY 16.7 billion against our original forecast of JPY 13 billion. Am I right assuming this way?
No, that is not the case. JPY 6 billion plus JPY 7 billion. So we had assumed it would go up by JPY 13 billion for the full year which was the forecast we made back in August. And the latest number is JPY 6 billion plus JPY 3.7 billion. So JPY 9.7 billion is the latest number we calculated up until the third quarter.
I see. Then the full year impact of raw materials is not changing much. The August forecast has not changed much. Am I right?
Yes, you are right. It seems that it will be around the JPY 13 billion, which was the number we are thinking about back in August.
Yes, I would like to know the details. While palm oil has dropped substantially in price, but the Japanese yen has dramatically weakened. I wonder if you have taken into consideration these factors while you have not changed your forecast.
As you have just mentioned, prices of raw materials have softened to some extent. But that was canceled off by foreign exchange.
May I remind you that most of our materials are purchased in Japan and in Japanese yen, say, be it crude oil or palm oil, they are to be delivered or imported and the price is going to be passed on during the primary and secondary processing stages before we receive our raw materials. So it is in this process we are being affected by the foreign exchange.
I got it. So the FX will have an immediate impact, but decline in prices of fuels will affect you at somewhat later time. Am I right asking this way?
Yes, you're absolutely right.
Understood.
You can say there is going to be a time lag of 3 to 6 months.
Understood. If I may, I would like to ask my last question. For Lion, with the segment competition changes, cheaper Japanese yen will have a negative impact, ultimately. Is Lion having such a profit structure right now?
Yes, you are right. For the overall performance, cheaper yen is going to now affect our profit negatively.
Got it. I wonder if you could give me specific numbers with JPY 1 fluctuation.
Well, it's not that simple because we need to look at the supply-demand directions in terms of its impact on raw materials. Sorry that we are not calculating the number by JPY 1 fluctuation.
Next, I would like to have Ms. Kawamoto from UBS Securities.
And thank you, indeed, for your explanation. This is Kawamoto from UBS Securities. Can you hear me?
Yes.
I'm also looking at Page 9. It describes your controlling promotional expenses by revising the special sales prices and frequency as much as JPY 3.1 billion. This is a number for a total of 9 months. So just looking at the third quarter, it will be JPY 1.2 billion. Wonder if you could expand on the details of this JPY 1.2 billion. [ Per ] Industrial Product Japan versus Overseas, how much you have executed in each category?
Well, you are correct about the JPY 1.2 billion for the third quarter, July through September. We have not disclosed the breakdown of this number. But I can tell you that -- well, generally speaking, I would say at high level Overseas and the Industrial Products account for the majority of the total. Domestic Consumer Products account for only a small portion as of now.
I see. How about the interaction after the price hikes? Did it affect your market share or sales volume?
As I explained earlier with the examples of toothpaste, we have been promoting sales in higher price ranges and switching to higher value-added products in parallel. So we are trying not to reduce overall sales too much.
I see that. I understand that you are planning to raise prices in Japan in the fourth quarter. Any progress in this regard?
Well, we are negotiating with wholesalers to switch from price promotions for low price items in each category to promotions for value-added items. And we are working together with the wholesalers to ensure that sales on the sales floors do not decline. So this is what we are trying to do right now. Well, it is rather difficult to say whether or not there will be an immediate impact. But we would like to work out remaining efforts we need to carry out in the fourth quarter.
Understood. You are assuming [ JPY 130 ] for the second half of the year, right? But it appears that it may not be [ JPY 130 ] for the second half of the year. I wonder you have calculated maximum FX rates to realize your current expectation of raw materials.
As I mentioned at this point earlier, we are not necessarily buying in the U.S. dollar. So I believe that the current cost structure is actually within the range of our initial assumptions, even in the current range. We do not expect that the exchange rate of high in [ JPY 140s ] or [ JPY 150 ] in the current fiscal year and will have immediate impact on raw material prices for the current fiscal year.
Next, I would like to have Mr. Hirozumi from Daiwa Securities.
This is Hirozumi of Daiwa Securities. Can you hear me? I may be sounding here a little bit cunning, but Mr. Fukuda's explanation towards the end, you said that you will do your best to achieve the target for the current fiscal year and the next fiscal year and beyond. So I'd like to particularly focus on this part of the explanation, if you do not mind. 3 months ago, you said that you are going to achieve the plan for the current year by slashing out your marketing cost. That's what you told 3 months ago. And now you are behind the target. However, your company spends more than JPY 50 billion a year on [ NP ].
So whether it is good or bad, as long as you have a strong will, you should be able to cut the cost, and you will be able to generate profit, won't you?
Well, you have not given us any specific target for the next fiscal year. But I think our focus is based upon actually our midterm plan, JPY 32 billion for 2024. So I would like to inquire here your -- basically thoughts for the next fiscal year. And setting aside the costing issues, what kind of thought do you have in terms of achieving your original target? So these are the questions I like to inquire here.
Thank you indeed for your questions. As for our learning for the current fiscal year, well, based on the situations and up until the third quarter, we are somewhat behind the plan. Yes, we are somewhat behind the plan. So we need to do our best to go for the forecast we had announced for the year. Yes, that's what I said.
In terms of [ NP ] in reality, some can be stopped but some simply cannot be stopped immediately because they are part of the programs being [ reared ]. And also, they are part of production activities. We simply cannot stop them all of a sudden because -- just because we are running short of profit. I hope you understand this point.
So this is the kind of the situation we are faced with. Actually, in relationship with retailers, actually, we have a contract. So we simply cannot change on a short-term basis. So instead of working on those cost items, rather, may I remind you that we are now moving on the good trend in terms of growing the earnings. I think this is going to give us a tailwind, so to speak. So we would like to further increase sales and generate gross profit. And we'd like to try to control the entire things.
As for the next fiscal year, if the current situation continues as is, we will end up with an increase in costs in the first half of the year and the raw materials cost remains at a high level compared with the first half of the current year. So with these points in mind, we would like to go for our midterm plan of JPY 32 billion for operating income, while making efforts next and year after next. So from this year to the next year and from the next year to the year after next, we would like to go step by step to move out of the controlling mode to investment mode for further growth. We would like to steer ownership in such a way.
How about the phrase you used previously. You will slash the cost like an emergency in escape. How should I take it and it's bothering me for some time?
Well, I would like to recover step by step. Well, it all depends on the raw material situations.
Sorry to interrupt you. What I mean to say is, was it truly necessary for you to cut the cost for emergency and escape? Some other companies actually changed their numbers downwardly. I don't think just going forward sticking to the original full year number is going to be the only right answer. How do you feel about it?
Well, with the big external factors. It could be in [ 1 year ] to bring down your flag, so to speak, for some companies. But as far as how we are concerned, we actually valued our commitment to our stakeholders. I hope you understand this important point for Lion.
Then can I expect next fiscal year, you will also meet with your shareholders' return expectation in terms of your performance?
Yes. Of course. We are planning to go back to grow our profit.
I'm truly glad to hear that. That's all for me. Thank you.
Next, I would like to have Ms. Yamaguchi from Goldman Sachs Securities.
Thank you, indeed. This is Yamaguchi, Goldman Sachs. If I may, I am a little bit concerned that in the third quarter, your Consumer Products weakened. Some of the reasons for you being behind the plan is the sales, for one thing. And also, you're controlling sales promotion spends. I'm not fully convinced here because if I'm not wrong, you have not fully met with your planned sales promotion control target. There seems to be [ uncomfort ] here, if I may say so. So could you kindly expand on this aspect?
Well, I can only make qualitative comments. So changing the sales promotion, for some cases, the contract is for 6 months. So there are things that we can change and others which cannot be changed right away. At the same time, when we negotiate to review the sales promotion, this could lead to conflict of interest with retailers. So it is possible to influence other negotiations. So we have to really look at the total picture. And initially, probably we were thinking just good size, that is to reduce the sales promotion and maintain sales. And in some areas, there were areas of the products that did not go so well.
I see. So it sounds like where you changed some of the conditions of the sales promotion impacted the volume. So is it correct to understand that your market share is declining?
No, that is not necessarily the case. As I said, we are, at the same time, shifting to higher unit price products. So the volume-based share might come down, but the value-based share is unchanged in terms of calculation. So controlling the promotional expenses does not always lead to the lower market share.
I see I understand that you are doing very well in oral care. But in living care and public care and pharmaceuticals, I think that those declines are quite big. So I was wondering why, I could not understand the reasons. So can we say that the sales were high while people stayed home?
For the dishwashing detergent, yes, that is one of the factors. In both living care and the public care, this is more due to the competition-related factors of individual products.
So that means market share.
Well, some product initiatives were successful and in living care, one of the reasons is that we had new products last year. In public care, there are a few players. So depending on which player launch new products and run major promotion that would change the competitive environment.
I see, I understand. So if you look at the 9-month cumulative numbers, the changes in sales and product mix pushed up the profit by JPY 1.4 billion, and the increase in raw material prices were much higher than that. So I am concerned that you will face some difficult steering next year. So how do you plan to lead the company next year? If you can make some comments on that.
It depends on what would happen to the raw material market prices. But fortunately, in the first year of the medium-term management plan, we are seeing the good direction toward the growth. And at the same time, controlling the promotional expenses does not mean that we actively -- we are not actively aiming for the high market prices but market share. And this is something that we want to continue in the medium to long term, that is to change the sales promotion to focus more on the high value-added products. And if those go well, and if the external environment improves, we can benefit from them.
Next, we have Sato-san from Mitsubishi UFJ Morgan Stanley.
This is Sato speaking. I also have a question on Page 9. You said that you were a little behind. So increased sales prices, revised special sales prices and frequencies. As a total picture, it did not go as planned. Is that the correct understanding?
Yes, that's correct.
So in terms of the different segments, as it was mentioned, oral care went well, but it did not go so well in public care, living care and pharmaceuticals. Is that correct?
As for pharmaceuticals, it is not the case that the promotional expense control did not go well. So it's in the public care and living care did not go so well. Yes, generally speaking, that is the case.
In public care, you mentioned that the bleach struggled. That was a little surprise for me. So are you saying that the laundry detergent and fabric softer went well, but bleach was lower than the plan? In living care, you had expected decline from last year's high level. So how were they different from the expectations in public care and living care?
Well, the -- I said that the laundry detergent and fabric softener were strong and the bleach was not. I was talking about year-on-year sales changes.
I see.
So I was not really comparing the sales to our expectations.
I see.
So in that sense, public care and laundry detergent and fabric softener, we are a little bit behind. And in living care and dishwashing detergent, we did expect the drop. But due to the competitive environment, the sales did not grow as much as what we expected.
I think that the prices are up in general. So -- and we are not seeing the market data showing the competition to lower prices. So what do you think are the reasons behind this in fabric care and living care?
Well, part of the reason is that as a kind of emergency measure, we reduced our promotional expenses in comparison to the competitors. Probably that was -- that had an impact in the short term.
I see. So we are trying to increase this back in Q4. Is it this particular area? Or are you going to grow your strong areas further, such as oral care? Or spend more for the ones that did not go well in Q3. Could you talk about how you plan to offset in Q4?
In the short term, we would like to increase the sales of our growth products and increase the added-value product.
So you want to grow where you are strong. I see.
Next is Narikiyo-san of Nomura Securities.
I have a question on sales in China. I think Q3 sales were flat or slightly up year-on-year. And I'm sure that the environment was tough in China. So how did you manage these good results?
Well, you are correct. In China, there were lockdowns due to the pandemic. And in order to diversify the e-commerce, we changed our vendor. So temporarily, e-commerce sales declined. To offset this, we enhanced the off-line or physical channel.
So e-commerce sales are slightly down -- but with this new vendor, we are starting to see the signs of improvements. And in Chinese market, there are so many small competitors. And currently, our market share is 1% to 2%. So we enhanced our physical or off-line distribution and tried to offset the decline.
I see. Could you talk about specific products? And why were you successful in developing offline channels?
Toothpaste is an example. Before the COVID-19 pandemic, we had strong inbound demand. The tourists came to Japan and bought our products and brought them back to China. But now it's the cross-border trade or we export from Japan and sell the products in physical stores. And for example, White & White, which has become the low-end product in Japan, we are selling them for a China-specific product in China, and it's growing.
So what is the background behind the successful off-line channels? Until now, we were mainly focused on the major cities. But now we are expanding into the surrounding cities. Unlike Japan, we do not have nationwide sales channels. So gradually, we are expanding the areas that carry our products to expand the business flow.
Last question. How do you plan to capture the inbound demand in Japan? And what is the size of it? We don't really see White & White in Japan. And you mentioned that your share is 1% to 2%. You're not so well known in China.
Well, inbound demand in Japan, that is not something that we have expectations from because Chinese tourists have not yet come back to Japan. So we manufacture White & White in Japan for Chinese market and export them to China and sell them in China.
Well, the Southeast Asian tourists are now back in Japan, but you're not seeing any sales from the inbound demand or in-territory products?
We are not seeing any momentum from inbound tourists. This is not only for us, but for the industry as a whole.
Next is Saji-san of Mizuho Securities.
I have some questions about the onetime factors. First, in November, there will be a launch of the new products in public care. So what would be the expenses for that in this fiscal year and also the next fiscal year? And also about the relocation of the headquarters in the spring next year. What would be the onetime cost? You will be consolidating, I think, 4 different sites in Tokyo. So what is the expected cost reduction? Could you give us a guidance on the onetime factors?
Yes. Thank you. On the 28th of November, we will be -- we will make announcement on the fabric care products. Our plan is to launch the first product in the first half next year. We will be able to tell you the date when we make this announcement. So in the first half next year, we expect higher promotion costs.
As for the relocation of the headquarters, we plan to do this early next year. So there will be a concentration of expenses in the first half. So when you look at the full year, due to the raw material price factors, the balance between the first half and second half might be uneven.
In public care, in Q3, July to September, it seems weak. When you said that it was going well, were you referring to January, June or July, September? So fabric softener, laundry detergent, and are there any plans to reduce the number of the products before the launch of new products? Also, what is the size of the onetime cost for the relocation of headquarters?
About fabric care, I was talking about the cumulative January to September sales decrease and increases. Now in the case of fabric care, throughout the life cycle, we keep making improvements. So depending on the timing. Well, before the improvement is made, in terms of competition, we become weaker. So relatively speaking, this is the timing that we are -- we tend to struggle.
As for the cost of relocation of the headquarters, initial relocation onetime expense is expected to be JPY 500 million to JPY 600 million. And there will be rents to be paid after that.
So through the consolidation of about the 4 different sites, we can expect a reduction in the medium term?
Well the subsidiaries to be consolidated, when you look at the size of those companies, pluses and minuses offset each other. So our current headquarter building is 51 years old. In order to continue to use this, we would need to make drastic repair. So that will lead to the high running cost. So if you include that factor, there will be an advantage from relocation.
Thank you very much. We have answered to all the questions that we received. And our time is almost up. So with that, we would like to end the first 9 month financial results briefing of Lion Corporation. Thank you very much for your participation.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]