ENVALITH
ロート製薬株式会社 logo

ROHTO PHARMACEUTICAL CO.,LTD.

4527・Prime Market・Pharmaceuticals

Official website
ロート製薬株式会社 logo
ROHTO PHARMACEUTICAL CO.,LTD.4527

Business

Rohto Pharmaceutical is a leading Japanese health & beauty care company founded in 1899. It operates in four business areas: Eye Care Related Products such as eye drops and eye wash; Skin Care Related Products such as dermatological drugs and functional cosmetics; Oral & Food Related Products such as gastrointestinal medicine and supplements; and Medical Related products including CDMO, Prescription Ophthalmic Drugs, and regenerative medicine. In addition to its domestic operations, the company has built a global network spanning the Americas and Europe—centered on the Mentholatum Company—as well as Asia, primarily Southeast Asia and China, covering over 120 countries as of FY2026 (ending March 2026). The group, consisting of the company, 115 consolidated subsidiaries, and 18 affiliated companies, achieved total group net sales of ¥343,725 million.

Business Model

The core business model involves manufacturing flagship products at in-house factories and selling to consumers through domestic and overseas wholesale/retail channels, primarily via direct sales by the manufacturer. In Japan, sales through wholesalers such as Ohki Co., Ltd. account for 15.6% of sales. Overseas, local subsidiaries handle manufacturing and sales, developing products and marketing strategies tailored to the characteristics of each regional market. Business expansion through M&A (such as Yu-Yan-San International Co. and MONO Company) also contributes to revenue diversification.

Company Strengths

Building on eye care technology accumulated since its founding, the company offers high-value-added OTC eye drops such as "V Rohto Premium" and "Alguard." In skin care, multiple brands including "Hada Labo," "Melano CC," and "Obagi" have become established both domestically and internationally, with sales expanding into Asia and Europe as well. In FY2026 (ending March 2026), the skin care business has grown to account for just under 60% of total sales.

The company has manufacturing and sales subsidiaries in Vietnam, Indonesia, China, Singapore, and other countries, with the Asia segment growing to become its largest overseas revenue source, posting sales of ¥125,327 million (up 24.9% year on year). By adopting a decentralized management model in which local subsidiaries lead product development and marketing tailored to the characteristics of each regional market, the company has built a locally-rooted business foundation that is difficult for competitors to replicate.

Starting with the acquisition of Mentholatum Company in 1988, the company has continued to execute M&A, including Rohto Nitten Co., Ltd. in 2020, Amato Pharmaceutical Co., Ltd. in 2021, and Yu-Yan-San International and MONO in 2024. Each acquired company has contributed to sales growth, directly supporting the cultivation of the oral & food business as a third pillar and the expansion of the European and Asian markets.

ENVALITH's Perspective

In FY2026 (ending March 2026), the company achieved revenue growth of 11.4% and operating profit growth of 7.5%, recovering from the operating profit decline recorded in FY2025 (ended March 2025). However, the cost of sales ratio rose from 43.5% in the previous period to 43.9%, as increased raw material costs and substitute costs following the bankruptcy of a container supplier in the UK have constrained margin improvement. The Europe segment saw revenue increase 24.7% while segment profit declined 28.8%, and the widening gap in profitability across regions warrants continued attention.

In the previous period, the company invested ¥74,479 million in the acquisition of subsidiary shares, but investment cash flow contracted to an outflow of ¥29,780 million in FY2026 (ending March 2026), and free cash flow improved significantly given operating cash flow of ¥47,788 million. Meanwhile, goodwill amortization increased to ¥2,048 million (versus ¥1,205 million in the previous period), and the trademark rights balance rose to ¥40,152 million, indicating an increasing amortization burden over the medium to long term. Dilution risk from convertible bond-type bonds with subscription rights to new shares (balance of ¥25,316 million) also continues to warrant attention.

The Asia segment maintained high growth, with revenue up 24.9% and profit up 29.8% year on year, driving overall group profit growth. Externally, economic growth and population increases in emerging Southeast Asian countries provide a tailwind, but geopolitical risks—exemplified by import license issues in Myanmar—and foreign exchange volatility risk, as reflected in the next-period earnings forecast (assuming ¥155 to the US dollar), heighten uncertainty regarding performance. The forecast for FY2027 (ending March 2027) anticipates a 3.9% year-on-year decline in ordinary profit, and close examination is needed of how changes in foreign exchange assumptions will affect performance.

Growth Strategy

Under the Mid- to Long-term Growth Strategy 2025-2035, the company is advancing the strengthening of OTC and skin care businesses, expansion in Asia, and the development of the medical business.

By expanding sales of core brands such as Hada Labo, Acnes, and Selsun in high-growth Southeast Asian markets (Vietnam, Indonesia, etc.), and by deepening the integration of the Kampo medicine and oral-related business of Yu-Yan-San International (Singapore), the company aims to further strengthen the earnings base of the Asia segment. In FY2026 (ending March 2026), Asia segment sales reached ¥125,327 million and segment profit reached ¥15,048 million.

European sales are being expanded through the geographic expansion of sales countries for Dax's (Poland) Hadalabo Tokyo and YOSKINE brands, and through the continued earnings contribution of MONO (Austria), consolidated since August 2024. The company aims to restore the profit margin of the Europe segment by addressing the rise in cost ratio caused by container supply issues in the UK (securing alternative suppliers and cost management). In FY2026 (ending March 2026), segment profit declined 28.8%, leaving challenges remaining.

Based on the "Rohto Group Mid- to Long-term Growth Strategy 2025-2035" announced in May 2025, the company is nurturing the CDMO business and prescription ophthalmic drugs as new growth areas. A new "Medical" category has been established in the product/service classification, and Medical Related sales for FY2026 (ending March 2026) were ¥38,078 million (up 11.4% from ¥34,191 million in the previous fiscal year). The company continues to invest ¥13,727 million in research and development to expand its pipeline.

The annual dividend for FY2026 (ending March 2026) was increased to ¥46 (from ¥36 in the previous fiscal year), raising the payout ratio to 30.4% and the dividend-to-net-assets ratio to 3.7%. The forecasted dividend for FY2027 (ending March 2027) is ¥50, planning a further increase. The company has indicated a policy of expanding shareholder returns while strengthening its financial base, with an equity ratio of 62.1% and net assets per share of ¥1,334.04.

Last updated: July 19, 2026