Shiseido Announced Absorption-type Split Between Subsidiaries to Target Mid-Term Strategy

Shiseido announced an absorption-type split that to transfer the business of Shiseido Pharmaceutical to Shiseido Japan. The transfer will be executed through a company split and will take effect on January 1, 2024.

Shiseido released an announcement that Shiseido Japan Company, Limited, and Shiseido Pharmaceutical Company, Limited, which are wholly owned subsidiaries of Shiseido Company, Limited, have both made official decisions to transfer the business of Shiseido Pharmaceutical to Shiseido Japan. Shiseido Japan serves as the regional headquarters of Shiseido in Japan, overseeing the marketing and sales of its brands within the country. The transfer will be executed through a company split and will take effect on January 1, 2024.

On 10 Feb 2023, Shiseido launched its medium-term strategy “SHIFT 2025 and Beyond”. Shiseido said under a new management structure, the company plans to transition from a "defense" to an "offense" posture over the next three years and drive further growth to become a global leader in the beauty industry while staying true to its heritage.

Shiseido said the "SHIFT 2025 and Beyond" management strategy aims to address the remaining challenge of "WIN 2023 and Beyond" by first regaining growth in the Japanese business. The company plans to achieve a core operating profit of over 50 billion yen ($362.38 million) in the Japan business by implementing fundamental reforms over three years from 2023 and to achieve a core operating margin of 12% by 2025 and 15% by the plan's final year of 2027.

Shiseido pointed out that the company's goal is to achieve a CAGR of 8% in net sales over the three years from 2023 to 2025, as compared to 2022. Additionally, the company aims to achieve a CAGR of 6% in net sales over the two years from 2026 to 2027, as compared to 2025.

To achieve these goals, Shiseido said the Company has identified the "Clean & Dermatology" and "Inner Beauty" domains as areas of opportunity to capture evolving consumer preferences in Japan. By strengthening its initiatives in these domains, the company aims to create new demand and deliver value to consumers. As a result, Shiseido Pharmaceutical's business, which includes brands in these domains, will be transferred to Shiseido Japan, the company's cosmetics and healthcare business in Japan, through an absorption-type split.