Shiseido releases prudent forecast for 2022

By

Sarah Ahssen

Translated by
Nicola Mira

Published
Feb 9, 2022

On Wednesday, Japanese cosmetics group Shiseido released a prudent forecast for fiscal 2022, influenced by the “prolonged impact” of the Covid-19 pandemic on its business, especially in the group’s two main markets, Japan and China.

Shiseido is forecasting a slight shortfall in its net income for 2022, down to JPY40 billion (€303 million at current exchange rates) from the JPY42.4 billion recorded in 2021, which followed the JPY11.7 billion loss recorded in 2020 due to the pandemic, as indicated in a press release. The group’s operating income is instead forecast to rise to JPY60 billion in 2022, up from JPY41.6 billion last year, a result that is nearly three times higher than in 2020.

Shiseido's 2022 sales are expected to reach JPY1.1 trillion (€8.3 billion), in other words only a little more than the JPY1.035 trillion revenue generated last year, when it grew 12.4% on an annual basis. Shiseido cited “the prolonged impact of Covid and its variants” and the risks to its business implicit in the delayed recovery of the Japanese economy and the recent new lockdowns in China, which continues to pursue a ‘zero Covid’ policy.

Last year, Japan and China together accounted for 53% of Shiseido’s global sales. The group’s sales in Japan, where household consumption is weak and foreign tourists are still banned because of the pandemic, slumped by 1.4% last year, while they recorded a 19% increase in like-for-like terms in China.

In October 2021, Masahiko Uotani, CEO of Shiseido, stated in an interview to the Financial Times that, in order to reduce the group's dependency on China and strengthen its position on other markets, he envisaged acquiring a number of skincare brands, notably in Europe and the USA, as well as India and Africa.

In 2021, Shiseido's sales increased by 30% in the Americas region and by 17% in EMEA. They were up by 18% in the travel retail channel, a key segment for the Japanese group since it involves chiefly prestige products, an environment on which Shiseido is now keen to focus, especially with an eye on the highly dynamic skincare sector.

Last year, Shiseido sold its personal care and mass-market beauty business to the CVC investment fund. A sale that probably allowed the group to avoid posting a net loss for the second year running. In August 2021, the group’s Shiseido Americas subsidiary divested itself of make-up brands Buxom, BareMinerals and Laura Mercier, selling them to AI Beauty Holdings Limited, a new entity created by the Advent International group.

Following the publication of the latest forecasts, Shiseido announced a new sale: that of its professional haircare business in Japan and elsewhere in Asia, which has been snapped up by German group Henkel for the equivalent of €93 million.

With AFP