Highlights for FY2002

April 22, 2003Kao Corporation

Takuya Goto

These are the translation of materials used for the analysts meeting of April 22, 2003 in Japan.

This presentation material contains forward-looking statements that are based on management's estimates, assumptions and projections as of April 22, 2003.Some factors, which include, but are not limited to, the risks and uncertainty associated with the worldwide economy, competitive activity and currency fluctuation, could cause actual results to differ materially from expectations.

(The figures in this presentation material are rounded down.)

The presentation material in PDF format is available on our website: http://www.kao.co.jp/e/ir_e/analystmtg/index.html

Agenda

1. Kao’s Growth Strategy- Domestic Operations- International Operations

2. Corporate Governance and management reforms

Market share gains

Consumer Products/Cosmetics - Japan

- An Offensive Posture -

Ability to graspconsumer needs/wants

Technological seeds

Superior R&D

Unique, innovativeand value-added

New market-creating

Products

Aggressive spendingfor marketing and

sales promotion

Effective supplychain management

Category management/retailer support activities

Sales/Distribution

Profitable growth under challenging economic condition

Healthcare/Functional Food

Econa

DiacylglycerolVegetable sterol

Cooking oilMayonnaise type (*)Dressing (*)

Prevention of fat depositLowering cholesterol

Healthya

Concentrated tea catechin

Ready-to-drink green tea

Suitable for people who are concerned about body fat

Brand

Producttype

Keyingredient

Healthbenefitsclaim

(*) The mentioned products contain Econa Cooking Oil, however, they do not have such health benefits as above mentioned.

SOO Relaxation

Clear Clean PlusWhitening Whitening the teeth

Clear Clean PlusRecalcification of teethPrevention of cavitiesin early decay

Success Flavacyte Hair restoration

(*) Monofluorophosphate

New Key Chemicals

Brand Product featuresKey chemicals

Cedrol

Malic acids

MFP(*)/Alkaline granulesNaF/Xylitol

t-flavanone

Consumer Products - Overseas (1)

1988 Andrew Jergens1989 Goldwell (KPSS)

1998 Curél1999 Alliance with SC Johnson

2000 Ban2001 ADM Kao2002 KMS Research Inc Kao (China) Holding

John Frieda Kao Transfer (Hangzhou)<October 2002>

M&A Joint Venture/Other

.....

.....

Consumer Products - Overseas (2)

Asia & Oceania

NorthAmerica Europe

Skin Care Bioré Jergens, BioréBan, Curél (Bioré)

ProfessionalHair Care Goldwell Goldwell

KMSGoldwellKMS

Fabric & HomeCare

Attack,Magiclean, Haiter

Feminine &Baby Care Laurier, Merries

Health Care/Functional Food Enova

Hair CareSifoné, Feather

LavenusGuhl

John FriedaJohn Frieda

- Brand Portfolio -

Healthy growth

Concentrate resourceson selected brandsReinforce the unified management in the regionReallocate production sites

Build solid foundationEstablish the brandsbacked by strategicmarketing investmentExpand to popularmarket through the joint-venture

China

In process of recoveryMaximize restructuringbenefits Reinforce core business for further profitable top-line growth

Taiwan

China, Hong Kong TaiwanASEAN

Consumer Products - Asia

- For reinforcement and expansion -

Consumer Products - China

- Strengthen the Market Presence -

Premium

Popular

Premium brands

Kao Corporation Shanghai-Bioré facial cleanser-Attack laundry detergent-Sifoné shampoo-Laurier sanitary napkins

Popular brands

Kao Transfar (Hangzhou) Co. Ltd-Transfar laundry

detergent and dishwashing detergent

Establish the brands

Expand to the popular market

Personal Care in North America/Europe

- Toward Comprehensive Personal Care -

Skin care Hair carePopular

Premium

Hand & Body Face Antiperspirant/Deodorant

Personal care

Mass Niche

Jergens

Ban

Bioré

CurélJohnFrieda

Guhl

Oleo Chemicals/ Surfactants

Focused Fields in Chemical Business

Specialty ChemicalsToner and toner binder

Specialty ChemicalsAroma chemicals

- Benefit from global production and market-specific product development capabilities

Directors’remuneration

Separationbetween the supervisoryfunction andexecution

External eyes

Compliance

Continuous Enhancement of Corporate Governance- Toward More Profitable and Ethical Company -

1999 2000 2001 2002 2003

Advisory Committee

Increase in number of Outside Corporate Auditors

Outside Directors

Committee for the Examination of the Nominees for the Board of Directors and the President

FY

Executive Officer System

Assigning certain position titles(*)

to executive officers instead of directors

Performance-linked bonus system based on EVA

Stock Option Plan for Directors

Retirement Allowance for Directors abolished

Compensation Advisory Committee

Compliance Committee

Corporate Audit Services

Cor

pora

te g

over

nanc

e

*Namely President, Senior Executive Vice President, Executive Vice President

Corporate Ethics Committee (1997-)

Internal Audit (1992-)

(Conference by Corporate Auditors of Domestic Group Companies)

Out

side

Law

yers

Board of Directors

Chairman of the Board

Internal Directors

Outside Directors

Board of Directors

Chairman of the Board

Internal Directors

Outside Directors

Shareholders MeetingShareholders Meeting

Committee for the Examination of the Nominees for the Chairman of the Board

of Directors and the President(Outside Directors / Outside Corporate

Auditors)

Compensation Advisory Committee（Representative Directors / Outside

Directors)

Corporate Audit Services

Management Committee“Keiei-Kaigi”

Executive OfficersPresident

Senior Executive Vice PresidentExecutive Vice President

SupervisionCompliance Committee

Consultation on Compliance

Internal CoordinatorExternal Coordinator

Accounting & Finance/Risk Management/Legal & ComplianceOther Business Divisions

Certified Public Accountants

子会社、関係会社子会社、関係会社子会社、関係会社子会社、関係会社子会社、関係会社子会社、関係会社子会社、関係会社子会社、関係会社Affiliates

Board of Corporate Auditors

Inde

pend

ent A

udito

rsIn

depe

nden

t Aud

itors

Board of Corporate Auditors

Internal Corporate Auditors

Outside Corporate Auditors

Board of Corporate Auditors

Internal Corporate Auditors

Outside Corporate Auditors

Audit

Audit

Audit

Audit

Audit

AuditAudit Audit

Audit

Audit

EPS and Net IncomeNet Income (Billion yen)

Adjusted Net Income per Share

Net Income

Weighted Average # of Outstanding Shares (MM)

Net Income per Share (Yen)

FY F

560577600615625620611601600600599598598593587577527512

467411390390

353327

64.062.4

3.05.2 5.5

7.09.3 10.5

12.9 13.4

17.5 17.820.0 20.0 20.4

22.123.6 24.5

27.5

34.7

52.1

59.4 60.2

24.4

115.2

108.1

9.214.9 14.3

18.022.8 22.6

25.2 25.530.4 30.3

33.7 33.5 34.137.0

39.5 40.945.9

40.1

56.0

83.4

96.7100.4

0

10

20

30

40

50

60

70

80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 030

20

40

60

80

100

120

140

Expansion of marketshares of our corebrands

Development of newmarket-creating products and acceleration of growth in new businesses

Corporate governanceand managementreforms

Strengthening and expansion of globalbusinesses

Achieve sustainable profitable growth and build corporate value

Basic Management Strategy