Euglena Co.,Ltd.

Business Details

Plans, manufactures, sells, and provides OEM supply of health foods and cosmetics utilizing proprietary materials such as the microalgae Euglena and Chlorella. Operates through a combination of multiple channels: direct sales (e-commerce and telephone), distribution (drugstores, etc.), OEM and raw material supply, and overseas expansion. The group as a whole, including the Kyusai Group (Hiza Support Collagen, etc.) and the Satis Pharmaceutical Group (cosmetics OEM), holds a diverse range of brands and serves as the revenue foundation accounting for approximately 92% of group net sales.

Recent Overview

Both direct sales and OEM expanded, with segment net sales growing 11.6% year-on-year to ¥12,189 million

In the first quarter of FY2026 (ending December 2026), "Karada ni Euglena" product series for the child-rearing generation and Kyusai Group's "Hiza Support Collagen" and other products performed steadily, expanding the group's number of regular customers and direct sales revenue year-on-year. In addition to increased orders from the Satis Pharmaceutical Group, expanded OEM and raw material transactions in microalgae materials and strengthened distribution expansion by the Kyusai Group drove significant growth in OEM, raw material, and overseas revenue, from ¥1,646 million in the same period of the prior year to ¥2,501 million. Continued contributions from profitability structure streamlining measures, including improved gross margin and reduced logistics costs, sales promotion expenses, and sales commission ratios, resulted in segment profit of ¥1,499 million (up 24.6% year-on-year), even while recording ¥629 million in M&A-related amortization expenses.

Key Products

Growth Drivers

• Significant growth in OEM, raw material, and overseas revenue driven by expanded orders from the Satis Pharmaceutical Group (up 52.0% year-on-year to ¥2,501 million)
• Expansion of the group's number of regular customers through the Kyusai Group's expanded distribution and steady performance of direct sales brands
• Improved gross margin through price revisions of flagship products and factory productivity improvement measures
• Optimization of advertising investment efficiency through creative improvements (LTV improvement via strengthened e-commerce mall sales channels, improved retention rates, and cross-selling)
• Thorough review of cost structure across the group, including reductions in logistics costs, sales promotion expenses, and sales commission ratios
• Maintaining the growth trend centered on the "Karada ni Euglena" product series for the child-rearing generation

Risks

• Continued significant amortization burden of intangible assets and goodwill related to past M&A (Kyusai Group and Satis Pharmaceutical Group) (¥629 million cumulative in the first quarter)
• Risk of price competition due to diversification and intensifying competition of functional materials in the health food and cosmetics markets
• Structural tendency for the direct sales channel's customer base to skew toward seniors, and risk of market contraction due to medium- to long-term population decline in the Japanese market
• High dependence on flagship brands (concentration risk in revenue composition)
• Risk of increased costs and reduced investment efficiency due to planned expansion of advertising investment from the second quarter onward
• Impact on raw material and energy prices and the supply chain due to geopolitical risks surrounding the Middle East situation