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Recently, Eunice released the 2022 Q1 performance report. The report shows that in the first quarter of 2022, Eunice's net sales were about 204.4 billion yen (about 10.53 billion yuan), a year-on-year increase of 12.3; core business income was about 29.9 billion yen (about 1.556 billion yuan), a year-on-year decrease 4.5%; net profit attributable to owners of the parent company was about 16.8 billion yen (about 0.874 billion yuan), a year-on-year decrease of 16.3.

By region, in the Asian market, sales of Eunice increased while profits decreased. In the Japanese market, the health care business, pet care business and female care business maintained good performance under the promotion of high value-added products, and sales and profits in other regions increased. Due to the strategy of transferring product value to high value-added products, the performance of the North American market and the Indonesian market achieved considerable growth.

By business segment, both Eunice's personal care business and pet care business grew in the first quarter of 2022, while other businesses declined. The net sales of personal care business were about 176.3 billion yen (about 9.203 billion yuan), up 11.8 percent year-on-year, with baby care and female care businesses dominating.

Focus on Nursing Business

The financial report shows that due to the decline in demand for "Made in Japan" products, sales growth in the Chinese market has been weak due to the decline in the birth rate and the rise of local companies. The company takes e-commerce channels and baby stores as the main channels to strengthen the sales of domestic high value-added moony diapers and strive to improve profitability. However, profits have fallen as soaring resource prices have led to higher manufacturing, logistics and other costs.

In the Japanese market, where the market is shrinking and the birth rate is low, the company is also expanding its product lineup to include high value-added diaper products, and thus achieve stable growth. In India and Indonesia, the business has achieved high growth.

In the women's care business, in China, the company was temporarily affected by blockades and other effects due to the spread of the new coronary pneumonia epidemic in some areas. Nevertheless, the company's high-quality, high-value products are still loved by the younger generation, especially pants-type sanitary napkins and organic cotton sanitary napkins products and other new value-oriented products. In addition, the company has also taken the initiative to expand the number of sales areas and stores, and use new e-commerce platforms and other activities to promote sales.

In terms of health care business, Eunice revealed in the financial report that it is optimistic about the adult incontinence product market. With the aging of China's population, the company has developed new products to meet the local needs of China, and actively invested in marketing to expand brand recognition.

It is worth mentioning that some insiders said that compared with its previous marketing policy, Eunice has spent more marketing budget on adult diapers rather than baby diapers. Since last year, the company's lucrative profits in the field of female care products in China have been used to promote adult diapers.

In addition, Eunice also said in the financial report that the company has merged wet wipes and cotton soft wipes in the baby care business and health care business into Kriei care business ("Kriei" means "beautiful and clean" in Japanese word pronunciation), and this new business will be launched worldwide.

The impact of the Shanghai outbreak and rising prices of raw materials

In addition to the sales results of different business units presented in the latest quarterly financial results, in an investor conference interview, Eunice executives also said that the Shanghai epidemic closure has put pressure on the Chinese market, while the Russian-Ukrainian conflict, exchange rate fluctuations, raw material price increases and other variables have also had an impact on business operations.

According to company executives, in April, of the three factories in China, the Shanghai factory was the most affected, with output and operating rate falling by about 30%. At the same time, some roads were blocked during the closure of Shanghai, and enterprises had to detour for transportation, affecting the speed of logistics. Fortunately, Eunice has three factories in China, so even if the company cannot supply from Shanghai, it can supply from other factories such as Tianjin.

On the other hand, Eunice Q1 has grown faster in terms of costs. Due to the uncertainty of the conflict between Russia and Ukraine, oil market prices continue to rise, and prices related to raw materials and distribution costs are expected to soar further. According to reports, although there are no relevant detailed statistics, in all countries, the prices of raw materials, including logistics costs, have been rising. In this context, Eunice will increase product value, including updating product-related pricing, and said that China, Japan, North America and other countries will become market centers.

Source: Jung-International Nonwoven Industry Business