Let me discuss agenda items 1 and 2. Since there are so many slides prepared, in the interest of time, I would like to pick some to elaborate on by spending the next 20 minutes approximately. Please turn to page 7, which shows highlights of our consolidated financial results. Net sales went up by 9.3% year-on-year to JPY 1,551.1 billion, with like-for-like growth of 3.7%, which excludes the impact of foreign exchange. The operating income came in with JPY 110.1 billion, down 23.3% year-on-year, with operating margin of 7.1%. The net income attributable to parent was JPY 86 billion, down 21.5% year-on-year.
The basic earnings per share was JPY 183.28, down 20.5% year-on-year. The cash dividend per share at the end of the fiscal year is planned to be increased by JPY 2 from the year before to JPY 74, resulting in an increase of JPY 4 to JPY 140 per share for the full year. Please take a look at page 8 for key points of the fiscal 2022 results. Looking back on the fiscal 2022, there were environmental changes such as unprecedented surges in raw material prices, economic slowdowns in China, the Americas, and Europe, and growing belt-tightening among consumers concerned about their future living standards in Japan. The impact and the speed of which we had not been able to catch up with fully.
As a result, the operating income varied substantially from the plan. We also realized that we had underestimated the extent of changes in the market. Here you can see the summary. I will give more detailed analysis of the current status of the three business areas later, together with future business portfolio management. Now, please move to page 13. This is the analysis of factors behind changes in consolidated operating income, which is about the JPY 33.4 billion decline in the operating income. Positive factors are indicated in blue, negative, orange. The result of the 4th quarter alone is shown in the parentheses. As you can see, surges in raw material prices was JPY 46 billion and higher freight logistics expenses to the order of JPY 9 billion, totaling JPY 55 billion, constituted major negative factors.
Other items which added up to about JPY 21.6 billion, including price hikes, canceled out about 40% of the JPY 55 billion. The biggest contribution came from the strategic price hike of JPY 14 billion. In terms of foreign exchange, progress in the yen's depreciation in fiscal 2022 significantly boosted the impact of currency translation on the profits by overseas subsidiaries into the positive territory. In the fourth quarter, as we had write-down of inventories due to the fluctuations in fats and oil markets, and therefore, the impact of currency translation and others wound up with a positive JPY 2.5 billion. Marketing expenses proactively spent in the third quarter were suppressed compared to the previous year in the fourth quarter, so they were reduced for the full year as well. In TCR, we achieved a record high of JPY 12 billion.
Next, let us move on to page 14 for variance between the fourth quarter forecast and the results. The operating income of JPY 68.1 billion was set as a goal for the fourth quarter, but we fell short by about JPY 35 billion. At the earnings briefing for the third quarter, I said that in order to achieve the goal, we would need to increase the operating income from the year before by JPY 38.5 billion, of which JPY 18 billion would be attained through increased marginal profits based on the growth in sales, and the remaining JPY 20 billion through price raise, TCR, and cuts in fixed costs. The JPY 18 billion rise in marginal profits would have required an 8% growth in sales.
As you can see in this chart, first of all, there was extra hike in raw material prices of JPY 3 billion, which also reflected energy costs and changes in the mix. Although strategic price raises went mostly as planned, we still fell short by JPY 1 billion. As for other, we had been planning to sell a piece of land, but it has been delayed into the fiscal 2023, which turned out to be a major contributor. What proved to be miscalculation on our part was in chemicals business, where the inventory write-downs, profit decrease due to decrease in sales prices, as well as sales volume decrease, especially in the Americas and Europe, where economic slowdown led to a reduction in inventories, totaled as much as JPY 4.5 billion in negative factors.
The biggest issue was a drop in profits of JPY 24 billion in consumer products. More details are given in the box below. Due to the gap in the market growth forecast, our sales in HNPC in Japan, which had been expected to grow 8%, turned out to be growing only 0%, while there was a 12% growth over achieving the forecast of 10% in cosmetics in Japan. In Asia, especially in China, cosmetics went down by as much as 31%, and HNPC down by 28%. In Americas and Europe, where we would normally see a boost in the fourth quarter, inflation-led economic slowdown pushed down the market by 3% or JPY 5 billion, which was another miscalculation on our part. This ultimately means we had underestimated the changes in the market, but this resulted in a big variance from the forecast.
Please move to page 15, where we put a summary of strategic price increases. Various strategic price increase approaches are described here, and together, we succeeded in achieving JPY 14 billion worth of price hikes. This managed to cancel out the raw material price surges by only about 30%, which was not nearly sufficient yet. As we explain more later, we're planning to change our approach in our price hikes in fiscal 2023. Please turn to page 16. We implemented price hikes from the second quarter in fiscal 2022, and this is a graphic representation of the results of keeping track of the effects by quarter. You have seen the effect up to the third quarter, and in the fourth quarter, home care improved with price hikes and effects of new products.
Unfortunately, fabric treatments suffered declines in both its market share and sales prices, partly due to the price cuts by competitors. Please take a look at page 17, which would be the last page of the financial results of the fiscal 2022. Here you see the main initiatives and the results of the three areas. In the growth driver area, we enjoyed an 8.5% growth in sales and JPY 1 billion rise in operating income. Though the situation was very challenging, except for Chinese cosmetics business, we succeeded in securing sales and profits mostly as planned. On the other hand, in the stable earnings area, sales went up slightly, but the operating income fell by JPY 22.9 billion. Though fabric softeners still have some issues left, laundry detergents and home care saw their shares expand.
About 60% of the total rises in raw materials prices were concentrated in this area. Though partially offset by price hikes, we believe the biggest reason for the profit decline overall was the fact that we were affected by the soaring raw materials prices in this stable earnings area most. In the business transformation area, both sales and operating income had a negative growth. Sanitary napkins in China continued to grow in both sales and profits, but other segments, including baby diapers and hair care products, continued to struggle with some issues left. I will elaborate on this later.
Let me discuss the consolidated operating results forecast for 2023. Please turn to page 19. Here you see the business environment assumptions. In consumer products, moderate growth of 3.4% is expected globally.
On the other hand, for chemicals, the fats and oils prices are stable, and further decline in prices is not likely. However, the automobile and semiconductor markets and economic slowdown due to inflation are causes of concern, leading to a negative growth forecast of -2.3%. Net sales is expected to grow by JPY 36 billion year-over-year. On the other hand
The impact from change in raw material prices is estimated to be JPY 12 billion. In response to this, total strategic price increase is expected to have a JPY 20 billion positive impact. Total cost reduction activities are expected to have a JPY 10 billion impact. Capital expenditure and exchange rate assumptions are as you see here. Now please turn to page 20. Consolidated operating, rating results forecast for 2023. Net sales is forecasted at 1.58 trillion, a 2.3% like-for-like growth from the previous year. Operating income of JPY 120 billion, an increase of JPY 9.9 billion year-on-year. Net income attributable to owners of the parent of JPY 88 billion, a year-on-year increase of JPY 2 billion. Basic earnings per share JPY 189.31, a 3.3% increase.
Cash dividends per share JPY 150, an increase of JPY 2. Please turn to page 22 for the expected opportunities and risks. There is no doubt that 2023 remains to be uncertain. We assumed that the environment will be almost the same as that in 2022, with opportunities being offset by risks. Please turn to page 23 for the graph on the impact of hikes in raw material prices on consumer products business. We presented this slide last year as well, where material price is shown as a comparison to 2015 prices. The further up you go on the graph, the higher the negative impact. You can see how big the negative impact was in 2022 compared to the past, we forecast an additional JPY 12 billion of negative impact.
Of note is that natural fats and oils in green and petrochemical raw materials in blue had a major impact in 2022. The impact of these two will be reduced to 30% of total impact in 2023. Petrochemical packaging materials and inorganic materials like silicone and fragrances, paper pulp and cardboard, and electricity and other energy costs will be major factors in 2023. In case of natural fats and oils or petrochemical raw materials, price fluctuations can be predicted based on price formulae. For the others, prices are determined by the market. Market conditions differ from item to item, so it is very difficult to predict prices. In addition to that, price hikes include energy cost and labor cost, and therefore, prices are unlikely to be reduced now. Now please turn to page 24. In this environment, how should we raise prices?
In fiscal year 2023, at least we want to recover the JPY 12 billion in raw material cost increase from 2022. Furthermore, we want to recover more than 60% of total material cost increase up to now by raising prices. As the breakdown of raw material price increases differs from 2022 and the prices of a broader range of materials, including packaging material, paper and cardboard, and energy went up, we will aim at increasing the price for all products. The increase for each product will be small, but by covering a broad range of products, we intend to increase the total amount recovered by the hike. We hope the market, which is in livelihood protection mode now, will be more receptive with broad but small increases in product price. Now please turn to page 25 for the consolidated operating income analysis of change.
This graph shows measures to be taken in order to achieve JPY 120 billion in operating income in 2023. As you can see clearly from the graph, marketing expenses will be higher than last year. Having said that, last year's marketing expenses were lower than the year before, so marketing expenses will be up JPY 6 billion compared to two years ago. With this, we plan to increase sales, which will push up marginal profit. Plus, as already mentioned, strategic price increases of JPY 20 billion will be the key to achieving JPY 120 billion. The environment continues to be difficult, but we will work towards achieving this goal. Please turn to page 26. This shows the trend in EVA. Kao introduced EVA in 1999, which was the first in Japan. We still use EVA to make decisions on investment.
At the company level, we constantly use EVA to develop plans. While we expanded business categories, we were not able to sufficiently do business-by-business management.
From fiscal year 2023, we will introduce business by business ROIC for improved capital efficiency in day-to-day management. In particular, in 2023, in an effort to reduce capital costs, we will reduce inventory and CapEx that does not generate profits. Sales measures will be made more efficient and low cost product development will be done to improve EVA. Please turn to the next page 27. The vertical axis is business growth, and the horizontal axis is ROIC, representing profitability. Last year, we divided our businesses into three areas. Those businesses are shown in four quadrants here. Those in green are growth businesses, those in blue are stable earnings businesses, those in orange are for business transformation. The three businesses in the top right are performing solidly despite the difficult environment last year and are making profits.
The stable earnings business in blue were hit significantly by increase in material price. However, if we maintain our share, we can expect stable earnings again once material prices return to previous levels. In these businesses, we are rebuilding our strategy towards strengthening the profit structure. The sanitary napkins, products for hair salons, and hair care businesses in the business transformation area on the left-hand side require structural reform, including efficiency improvements. For paper diapers, we need to decide on the direction to take. Now, Mr. Hasebe, our president, will explain the management policy, including the strategy and reform measures. That concludes my presentation. Thank you for your attention. Thank you very much, Mr. Negoro. Now we'd like to invite President Hasebe to discuss management policies. President Hasebe, please.
I am President Hasebe.
As the president, I feel deep responsibility for our failure to achieve the publicly announced numbers for 4 consecutive fiscal years. For the past 2 years as president, I have been working to improve the business management, our business transformation has not been fast enough to catch up with the changes in the business environment. Let me explain about the future, along with the business portfolio management, which was discussed by Negoro earlier. The growth driver area indicated at the top right showed a strong result last year. We are hoping to build a growth trajectory, not just in Japan, but globally in this area. The problem lies in the stable earnings area shown on the right bottom, which is built on mass production with its core business in Japan.
We were not able to offset the impact from the rise in raw materials prices with the planned extent of price hikes alone. That said, we were the first company who declared price hikes in this category in Japan and went ahead with the strategy, which I believe was not wrong. This year, taking advantage of our experiences last year, we hope to expand profitability in this area and increase the share even further. The adjacent hair care business, we will work to solve issues in both business structure and marketing so that we can bring the business into the zones in the right. Sanitary napkins and products for hair salons, where we still have some issues to solve, do have enough potential to become global core businesses, and reform initiatives are now underway to transform the business in that direction.
However, what is in serious trouble is the left bottom quadrant or diaper business. Next, please. Now, today, we would like to announce the drastic structural reforms for Kao. First of all, with regard to the diaper business mentioned earlier, we will conduct fundamental review of its business strategy. As you know, this business at one time used to be a growth engine for Kao, but we have not been able to respond to rapid changes fully in this business, where China had become the main battlefield and we are going through discussions from different perspectives. We have now reached a point where we need to make decisions on this matter, including the way the business should be. We would like to have a separate opportunity to explain to you by the end of this fiscal year.
That said, however, in Indonesia, Japan and China, they are extremely popular products and therefore we would never draw a simple conclusion. Furthermore, for the business from transformation area, as described below that, there are unprofitable brands and businesses with limits to their future potential. For them.
We have been carrying out analysis using ROIC trees and detailed discussions on the potential of the businesses. For a certain portion of the area, we intend to proceed with clear withdrawal in a planned manner. The other item is drastic reform of fixed cost structure. Together with the business transformation area mentioned earlier, we will proceed with reorganization work and systemic reform. If we use ROIC tree as a basis, we can derive fixed costs indispensable for each business, and we will aim for a goal of maximizing the business productivity. Moreover, given the current status of Kao, a separate briefing is scheduled to be held on the progress of Kao Group Mid-term Plan 2025, K25, announced in 2020. Next, let me explain about the organizational and structural changes for growth.
The first one is financial reform based on work that emphasizes capital efficiency as we have been explaining from the outset. In order to supervise accounting, procurement, and human capital assets comprehensively as assets, we will strengthen management finance. For this, Mr. Negoro, who just spoke earlier, will lead the effort. This means that there will be rigorous supervision on day-to-day statuses of everything. This will entail strict supervision over the status on a daily basis of not just businesses, but each of the individual products. Next is business reform. At Kao, business management and sales management were not effectively integrated in the past. This was because the sales organization focused on net sales as the core indicator to manage. From now on, business and sales will be managed by EVA, focusing on profitable sales.
In order to do so, integrated management of business and sales based on financial management will be implemented globally. Today, we talked about strategic price increase. If business and sales work together on strategic price negotiations, execution of strategy by retail chain, marketing based on a speedy business model that responds to changes, I am confident that Kao will be stronger. Third, an urgent task is to reform product development, which has not been up to our expectations lately. We want to revive Kao's reputation for marketing and innovation. To do so, we will switch to a scrum type process where all divisions promote business, leading to a transformed speed and level of work. In the past, Kao took a matrix approach to management, but this will not upgrade speed or level. In recognition of this, we introduced scrum type management this January.
Speed and level will be changed so that Kao will regain its reputation for marketing and innovation this year. Lastly, digital transformation. Mr. Murakami, who has led reform in the cosmetics business, will shift his focus to DX. 2023 will be positioned as the starting year of digital Kao. Please look forward to a uniquely Kao digital transformation. Next page, please. I will not go into the details of each business, but this slide summarizes the business strategy direction of the three domains. For stable earnings businesses, we will continue to pursue expansion of share and profitability, which we discussed before. On the other hand, we will place more emphasis on the growth drivers. In cosmetics, at last, we are seeing post-COVID momentum. Last year, makeup products were very popular.
Not shifting our focus to skincare products was a major weakness of Kao, but now having both makeup and skincare products will give us momentum to be a strong player. In chemicals business, we will expand globally number one growth businesses and adopt unique technologies. In skincare, we will expand globally with our highly appreciated UV care products that have tangible advantages in field of use and performance as a core product. As this tangible effect UV care product is extremely well accepted. In Brazil, this year with this product, we hope to expand this business by starting local production. In the business transformation area, we will aim at converting the sanitary napkin business into a growth business. In hair care, by capitalizing upon all technologies and marketing know-how that Kao has, we aim to have it rebuilt as a core business.
Lastly, for hair salon products. As the challenges are clear, we will move quickly to transform this business into a high profitability business. Lastly, let me explain the policy that Mr. Negoro and I developed. This year, we will more consciously focus on achieving targets set at the beginning of the year. We believe this is the only way we can regain your trust in us. Although there are major challenges, this will be our number one target this year. What is important is to change to a resilient business structure that does not depend on market conditions. As we have already mentioned, expanding strategic price increases to all categories is a must. Based on lessons from last year, we will strategically raise prices slightly for a broad range of products. The direction is to minimize the burden on consumers and retailers while we steadily improve our profit structure.
At the same time, this year's new products target high value add and high profitability from the beginning. Second, we will promote focused management based on portfolio management. My Kao Mall, our direct sales channel, started in December last year. By summer of this year, we intend to cover all product categories by this channel. Third, Another Kao, our new business area, which I call Life Skin Care Area. We will expand sales of products for prevention of vector-borne infections. This year, we expect to be able to report to you commercialization of 2 new areas in the chemical business. We will also be announcing the commercialization of the RNA test business next month. This will be our first product in the digital life platform business. This year again, social change, including material price increases, are difficult to predict.
We expect Q1 and Q2 to be most difficult, but we will endeavor to reduce the negative impact to the minimum so that we can achieve our final target. This is all from myself. Thank you for your attention.