Yakult sees net sales growth

By Jim Cornall

- Last updated on GMT

Yakult is looking to grow in new markets, including Latin America, Asia and Eastern Europe.
Yakult is looking to grow in new markets, including Latin America, Asia and Eastern Europe.

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Japanese dairy products company Yakult has released its financial results for the year ending March 31, 2016, and they show an increase in net sales of 5.9%.

Sales in the previous financial year were ¥368bn ($3.4bn), which rose to ¥390bn ($3.6bn).

The food and beverages division (Japan) showed modest increases from ¥197bn ($1.8bn) to ¥199bn ($1.8bn), with overseas sales rising from ¥143bn ($1.3bn) to ¥158bn ($1.5bn).

Gross profit increased 7.8% from ¥203bn ($1.9bn) to ¥218bn ($2bn).

Losses turn around in Europe

In FY2015, food and beverage net sales were highest in Japan, corresponding to 53.6% of sales, while for the year ending March 31, 2016, this dropped to 51% of sales.

Europe accounted for only 2.4% of net food and beverage sales in the previous year, and this led to an operating loss of ¥182m ($1.7m). However, this turned around for the most recent financial year to an operating income of ¥618m ($5.7m), in spite of a decline in sales income, and a reduction to 2.2% of the company’s sales.

Operating income was strongest in the Asia/Oceania region, with ¥20.4bn ($187m) in FY2015 rising to ¥27bn ($250m).

Yakult’s forecast for FY2017 are net sales in Japan to rise to ¥203bn ($1.9bn), with income in the region totaling ¥12bn ($110m), a slight increase over 2016.

Europe is expected to break even in terms of income, but see a decline in sales, and the Asia/Oceania region will see net sales increase, but profits shrinking slightly to ¥26.4bn ($242m).

Future growth

For its future growth, Yakult said it is currently undergoing feasibility studies in Indochina and the Middle East, based on the assumption of market entry, and it is preparing to start business in Myanmar and UAE.

The company is also undertaking feasibility studies in Europe, especially EU countries in which it is not present currently, and parts of Eastern Europe, as well as various countries in Latin America.

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