Lion (4912N) Q2 2026 Earnings Report

The call presented a clear set of operating achievements — double-digit operating profit growth, EBITDA margin expansion, strong Oral Healthcare performance, and visible recovery in overseas markets — while candidly acknowledging a larger-than-expected raw-material cost headwind, execution and volume risk from price increases, and higher near-term SG&A/one-time costs. Management provided concrete offset plans (price pass-through, mix shift toward high-value products, cost reductions and SG&A efficiency) and maintained full-year guidance and dividend policy. Given the magnitude of positive operating momentum and the detailed mitigation plan for headwinds, the tone is constructive and confidence-oriented, though execution risk and external uncertainties remain material.

Lion reiterated its unchanged full‑year guidance and commitment to hit the targets set at the start of the year, after reporting Q2 net sales +8.7% YoY and core operating income +21.3% YoY (H1 core OI up JPY 2.7bn), with EBITDA margin at 11.8% (+1.1ppt YoY). Management flagged a revised full‑year raw‑materials hit of -JPY 7bn (up from -1bn), of which -JPY 1bn occurred in H1 and -JPY 5bn is expected in H2, and said it will offset roughly 80% (~JPY 4bn) of the JPY 5bn H2 impact via gross‑profit gains (JPY 1bn from a shift to high‑value products/cost cuts and JPY 3bn from price increases—split ~JPY 0.5bn in Q3 and ~JPY 2.5bn in Q4, with price carry‑through into next year). Key business metrics supporting the plan include Oral Healthcare: group‑wide H1 growth >10% (Japan Oral Healthcare +9.6%, high‑end toothpaste >¥1,000 up 131% YoY, SYSTEMA ~1.4x Apr–Jun), Consumer Products sales +1.6% with a 0.4ppt margin gain, Home Care ex‑REED +2.9%, and overseas recoveries (China Apr–Jun +14–15% vs Jan–Mar -21.6%, Southeast/South Asia & Oceania Apr–Jun ex‑FX +11.9%, Northeast Asia Apr–Jun +11.5%, total Apr–Jun +16.1%). Lion also reiterated plans to strengthen profitability (targeting core OI rising from JPY 35bn this year toward JPY 40bn next year) and to pursue the 11th consecutive annual dividend increase.