Takasago Reports Q2 2012 Financials

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Takasago posted its second quarter 2012 (April 1, 2011–Sept. 30, 2011) financial results, reporting ¥59,932 million in net sales, a slight 1% decrease from the sales in the same time period in 2010 (¥60,547 million). The company also reported a current quarterly net income of ¥2,623 million, and a quarterly net income per share of ¥26.15.

The economic environment during the company’s second quarter consolidated cumulative period saw a continued gentle recovery overseas in both the US and Europe, although fears of a global economic slowdown caused by financial insecurities in Europe are spreading. Asia maintained a bullish economic environment led by private sector demand, but the future of the global economy as a whole remains opaque, and the Japanese economy continued to be in a state of gentle deflation.

In the fragrance industry overall, growth markets such as China and other Southeast Asian countires are pulling the industry along. Additionally, upward momentum has been visible in the US and Europe. However, the environment of extremely fierce competition both inside and outside of Japan is continuing, due to market share competition, as well as the maturation of the market and business developments in Japan under continuing deflationary conditions.

In the flavor business, Takasago’s Asian subsidiaries performed well with net sales of ¥37,089 million (an increase of 1% from the same period last year). In the fragrance business, despite increased sales by the company and its European subsidiaries, the performance of its US subsidiaries was sluggish and net sales were ¥13,603 million (a decrease of 0.6% from the same period last year). In the aroma chemical segment, net sales were ¥4,830 million (an increase of 9.7% from the same period last year) due to the recovery of demand for menthol and the recovery of the fragrance market. In the fine chemicals business, pharmaceutical intermediates were sluggish, and net sales were ¥3,664 million (a decrease of 26.1% from the same period last year).

As to income, operating income was ¥4,479 million (a decrease of 12.2% from the same period last year) and ordinary income was ¥4,452 million (a decrease of 10.9% from the same period last year). Quarterly net income was ¥2,623 million (a decrease of 21.1% from the same period last year).

In Japan, due to earning recovery in the company’s flavor and fragrance businesses, net sales were ¥35,967 million (a decrease of 2.6% from the same period last year) and operating income was ¥3,008 million (an increase of 12.4% from the same period last year). In the Americas, net sales were ¥9,748 million (a decrease of 8.7% from the same period last year) and operating income was ¥98 million (a decrease of 90.9% from the same period last year) because the performance of the company's US subsidiary remained sluggish, as well as other factors. In Europe, profits stagnated despite increased sales in the French and Spanish subsidiaries and others, with net sales at ¥7,432 million (an increase of 10.9% from the same period last year) and operation income at ¥305 million (a decrease of 23.6% from the same period last year). In Asia, net sales were ¥6,784 million (an increase of 8.7% from the same period last year) and operating income was ¥907 million (a decrease of 5.1% from the same period last year) because the Chinese subsidiary and others remained steady.

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