Pola Orbis Holdings Inc. · TSE:4927
Pola Orbis — Q1 2020 Earnings Presentation
26 slides from Pola Orbis's earnings presentation, 2020
Slide 1: First Quarter of Fiscal 2020 Supplementary Material
First Quarter of Fiscal 2020 Supplementary Material POLA ORBIS HOLDINGS INC. Director Finance, Legal & Administration, PR, IR and CSR Akira Fujii This report contains projections of performance and other projections based on information currently available and certain assumptions judged to be reason
Slide 2: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2020 4. Initiatives Going Forward & Appendices 1
Slide 3: Q1 Key Topics
Q1 Key Topics Cosmetics Market The overall size of the Japanese cosmetics market, including exports, fell dramatically due to the impact of Novel Coronavirus Inbound demand dropped significantly due to a decrease in foreign visitors to Japan The net domestic market is deteriorating, due to a c
Slide 4: Consolidated P&L Changes Analysis: Net Sales to Operating Income
Consolidated P&L Changes Analysis Net Sales to Operating Income FY2019 FY2020 YoY Change (mil. yen) Q1 Results Q1 Results Amount % Consolidated net sales 52,440 43,316 (9,124) (17.4%) Cost of sales 8,011 7,106 (905) (11.3%) Gross profit 44,429 36,210 (8,219) (18.5%) SG&A expenses 37,655 34,204 (3,45
Slide 5: Consolidated P&L Changes Analysis: Operating Income to Profit
Consolidated P&L Changes Analysis Operating Income to Profit Attributable to Owners of Parent FY2019 FY2020 YoY Change (mil. yen) Q1 Results Q1 Results Amount % Operating income 6,773 2,006 (4,767) (70.4%) Non-operating income 182 88 (93) (51.4%) Non-operating expenses 430 2,248 1,817 422.0% Ordinar
Slide 6: Factors Impacting Profit Attributable to Owners of Parent
Factors Impacting Profit Attributable to Owners of Parent A decline in gross profit, resulting from decreased revenue, pushed down profit attributable to owners of parent by ¥5,403 mil. YoY (mil. yen) Positive impact Negative impact POLA revenue decreased 6,000 4,157 4,000 2,000 Decrease due to POLA
Slide 7: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2020 4. Initiatives Going Forward & Appendices 6
Slide 8: Segment Results
Segment Results FY2019 FY2020 YoY Change (mil yen) Q1 Results Q1 Results Amount % Consolidated net sales 52,440 43,316 (9,124) (17.4%) Beauty care 51,165 42,082 (9,082) (17.8%) Real estate 658 636 (21) (3.2%) Others 617 597 (20) (3.3%) Operating income 6,773 2,006 (4,767) (70.4%) Beauty care 6,449 1
Slide 9: Beauty Care Business Results by Brands
Beauty Care Business Results by Brands FY2019 FY2020 YoY Change (mil. yen) Q1 Results Q1 Results Amount % Beauty care net sales 51,165 42,082 (9,082) (17.8%) POLA 32,021 25,057 (6,964) (21.7%) ORBIS 12,317 11,304 (1,012) (8.2%) Jurlique 1,866 1,297 (569) (30.5%) H2O PLUS 354 284 (69) (19.7%) Brands
Slide 10: Brand Analysis (1)
Brand Analysis (1) Q1 Result Topics Sales to inbound customers and buyers decreased due to Novel B.A LIGHT SELECTOR launch (March) Coronavirus Well received from the start In Japan, revenue decreased significantly from the impact of consumers refraining from outside activities and shorter depa
Slide 11: Brand Analysis (2)
Brand Analysis (2) Q1 Result Topics Revenue decreased with fewer customers due to narrowing down ORBIS CLEANSING CREAM launch customer targets (February) Skincare ratio and product unit price both increased year on year Third flagship product after ORBIS U and profitability increased, with inc
Slide 12: Brand Analysis (3) Overseas Brands
Brand Analysis (3) Overseas Brands Q1 Result Topics Jurlique placed the China business under direct ownership, and Jurlique strengthened its branding. Revenue declined with store closings Renewal of mainstay series due to the spread of Novel Coronavirus (January) H2O PLUS launched a subscripti
Slide 13: Brand Analysis (4) Brands Under Development
Brand Analysis (4) Brands Under Development Q1 Result Topics THREE struggled with reduced department store traffic and First ever duty-free shops launched for refraining from providing trial use of cosmetics due to Novel Amplitude, ITRIM and Coronavirus FIVEISM×THREE (March) The three new bran
Slide 14: Impact of Novel Coronavirus on Performance and Future Policies
Impact of Novel Coronavirus on Performance and Future Policies Impact of Novel Coronavirus in Q1 Policies on the Impact of Novel Coronavirus ■ By brand Change in values and conduct of consumers 1 Change in consumer conduct due to POLA Approx. ¥(6.5) bil. refraining from going outside Change in l
Slide 15: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2020 4. Initiatives Going Forward & Appendices 14
Slide 16: Forecasts for Fiscal 2020 (Revised)
Forecasts for Fiscal 2020 (Revised) FY2020 YoY Change FY2020 Vs Feb. 14 YoY Change (mil. yen) Q1 Results Amount % Full-year Plan Plan Amount % Consol. net sales 43,316 (9,124) (17.4%) 190,000 (27,000) (29,920) (13.6%) Beauty care 42,082 (9,082) (17.8%) 185,400 (27,000) (29,486) (13.7%) Real estate 6
Slide 17: Forecasts for Fiscal 2020 Details of Revision
Forecasts for Fiscal 2020 Details of Revision The impact of Novel Coronavirus on results is greater than was anticipated at the start of the fiscal year This is primarily due to a significant downturn within Japan Certain assumptions have been applied to reflect the downward impact on original plans
Slide 18: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2020 4. Initiatives Going Forward & Appendices 17
Slide 19: Initiatives for FY2020 Q2 Onward
Initiatives for FY2020 Q2 Onward Faced with an unclear business environment in Japan, by accelerating growth mainly in China and the rest of Asia, also strengthening e-commerce for recovery Strengthen cost control and thoroughly reduce fixed costs to improve profitability ■ Sustain stable growth of
Slide 20: Initiatives for FY2020 Q2 Onward
Initiatives for FY2020 Q2 Onward ■ Bring overseas operations solidly into the black overall With recovery in China under direct ownership, focus on online marketing leveraging key opinion leaders (KOL) Continue to downsize main office functions and strengthen control of SG&A expenses Focus on
Slide 21: About POLA ORBIS Group
(Appendix) About POLA ORBIS Group Beauty care is the core business of the Group, and 9 different cosmetics brands are operated under the Group umbrella FY2019 Consol. Net Sales ¥219.9 bil. Overseas Flagship Brands under Brands Brands development ¥20,000 High Prestige Price Range ¥10,000 Prestige ¥5,
Slide 22: Beauty Care Business Brand Portfolio
(Appendix) Beauty Care Business Brand Portfolio Sales Brand Concept and products Price Main sales channel ratio* JP:Consignment sales through High-prestige skincare Approx. Beauty Directors, department store counters Leading-edge technology in 63% aging-care and skin-whitening ¥10,000 and onli
Slide 23: Improvement in Capital Efficiency and Shareholder Returns
(Appendix) Improvement in Capital Efficiency and Shareholder Returns Initiatives to Improve Capital Efficiency (%) ROE movement Operating income CAGR10% Achieve net income growth 16.0 14.2 EPS which is higher than operating Target for 2020 (Earnings per share) income growth by decreasing 12.0 10
Slide 24: Long-term Vision
(Appendix) Long-term Vision STAGE3 Become a highly profitable global enterprise Consolidated net sales STAGE2 Goals for FY2020: •Consol. net sales: ¥250.0 bil. or higher (bil. yen) Further strengthen domestic •Overseas sales ratio: 20% STAGE1 earnings structure and •Operating margin: 13-15% accelera
Slide 25: 2017 – 2020 Medium-term Management Plan
(Appendix) 2017 – 2020 Medium-term Management Plan The final stage of the long-term vision for 2020. Aim to improve profitability in Japan, promote a solid shift toward overall profitability from overseas operations and build a brand structure for next-generation growth. Consolidated net sales Capit
Slide 26: Beauty Care Business Results for FY2017 – FY2019 by Brands
(Appendix) Beauty Care Business Results for FY2017 – FY2019 by Brands FY2017 FY2018 FY2019 2018 vs 2019 YoY Change (mil. yen) Results Results Results Amount % Consolidated net sales 244,335 248,574 219,920 (28,654) (11.5%) Beauty care net sales 227,133 231,207 214,886 (16,321) (7.1%) POLA 144,012 15