Unicharm Corporation · TSE:8113
Unicharm — FY2017 Earnings Presentation
27 slides from Unicharm's earnings presentation, Feb 16, 2018
Slide 1: Unicharm Presentation Materials for Investor Meeting
Fiscal Year Ended December 31, 2017 Unicharm Presentation Materials for Investor Meeting February 16, 2018 Takahisa Takahara President and CEO Unicharm Corporation Projections stated in these materials include those based on the Company’s currently obtained assumptions, forecasts and plans regarding
Slide 2: Financial Performance Summary: Fiscal Year Ended December 31, 2017
Financial Performance Summary: Fiscal Year Ended December 31, 2017 ◆ Document notations BC： Baby Care Business FC： Feminine Care Business HC： Health Care Business C&F：Clean & Fresh Business PC： Pet Care Business Copyright (c) Unicharm 2012 Unicharm Corporation. Corporation. All rights All rights res
Slide 3: Financial Performance Summary
Fiscal Period Year Ended Dec. 31, 2017 Financial Performance Summary Consolidated results (New record high established) Sales of 641.6 billion JPY (6.1% increase), core operating profits 86.8 billion JPY (9.8% increase). Achieved FY 2017 earnings forecast, and start the 10th Midterm Group Mana
Slide 4: Consolidated account highlights
6.1% sales increase, 9.8% core operating profit increase (both record highs) Sales and profit both reached earnings forecast Consolidated account highlights (Millions of yen) *1 FY Ended *2 FY Ended Difference (Forecast) FY Achievement Dec. 31, Des. 31, Difference Ended Dec. 31, Rate (%) 2017 2016
Slide 5: Core operating income fluctuation
Quantity sold increased due to effects of aggressive marketing investment With positive effects of product mix improvement and raw material price fluctuation, etc., core operating profit increased by 7.7 billion yen Core operating income fluctuation (100 millions of yen) Selling and administrative
Slide 6: Geographical segment information
In Japan, BC, HC, PC drive performance In Asia, India became profitable and profitability improved mainly due to Indonesia Geographical segment information (Millions of yen) *1 *2 *3 FY Ended FY Ended (Ref.) Difference Dec. 31, Dec. 31, Difference Actual (%) 2016 2017 difference Net sales 253,544
Slide 7: Operating profit ratio by location
In Japan, improved profitability with high value-added products and expanding exports In Asia, active marketing investment implemented in main countries Operating profit ratio by location 25.0% *1 Japan Asia Other Consolidated 21.7% 20.0% 16.7% 15.5% *3 (20.1%) 15.0% 13.7% 13.6% 13.8% 13.5% 13.0%
Slide 8: Business Segment Information
PC profitability greatly improved For Japan PC, profitability improved due to high value-added product increasing unit price For North America PC, shift to high value-added products improved profitability Business Segment Information (Millions of yen) *1 *2 FY Ending FY Ending Difference Differenc
Slide 9: Overseas sales composition ratio
Overseas sales composition ratio 58.9% （58.2％ excluding exchange effects） Domestic / overseas sales (Billions of yen) *3 70% 1,000 62.1％ 60.0％ 64.4% 60% 61.4% 800 58.9% 57.7% 57.7% 50% 52.6% 49.3% 600 46.2% 40% 42.8% 42.9% 42.9% 38.2% 30% 400 20% 200 10% 0 0% '13/3 '14/3 '14/12 *1 '15/12 '16/12 '1
Slide 10: Effects of exchange fluctuations
Effects of exchange fluctuations Approx. 10.5 billion yen increase in sales Approx. 1.3 billion yen increase in core operating profit Rate fluctuations by currency Currency Exchange rate for 2016 Exchange rate for 2017 Rate change China (CNY) 16.37 16.63 +1.6% Indonesia (IDR) 0.0082 0.0084 +2.4% T
Slide 11: Summary of Business Plan; Fiscal Year Ending December 31, 2018
Summary of Business Plan; Fiscal Year Ending December 31, 2018 Copyright (c) Unicharm 2012 Unicharm Corporation. Corporation. All rights All rights reserved. reserved.
Slide 12: FY2018 initiatives to achieve goals of the 10th Midterm management plan
FY initiatives to achieve goals of the 10th Midterm management plan (G20) FY 2020 800 billion JPY Core operating profit 15% ROE15% FY 2018 Initiatives Ensure approx. 7% for sales growth CAGR (annual growth rate) With low prevalence rates and use rates for disposable baby diapers and feminine hyg
Slide 13: Consolidated summary of business plan
Fiscal year ended December 31, 2018 Consolidated summary of business plan Sales/core operating profit main points Consolidated (sales 687 bn. JPY + 7.1%, core operating profits 94 bn. JPY +8.2%, profitability 0.2% improvement) Financial impact due to exchange rate fluctuations decreased by 2.9 b
Slide 14: Consolidated earnings forecast
Record highs for 2018 as well in preparation for 2020 Profitability improved mainly in Asia Consolidated earnings forecast (Millions of yen) *1 (Ref.) FY Ended FY Ending Difference Difference Actual Dec. 31, 2017 Dec. 31, 2018 (%) difference Net sales 641,647 687,000 +45,353 +7.1% +7.5% Core opera
Slide 15: Shareholder Return Policy
Shareholder Return Policy Copyright (c) Unicharm 2012 Unicharm Corporation. Corporation. All rights All rights reserved. reserved.
Slide 16: Continued dividend increase and total return ratio of 50%
Continued dividend increase in FY 2018 and total return ratio of 50% scheduled through the purchase of own shares and dividends linked to business performance Shareholder return policy (Millions of yen) 60% Dividends Purchase of own shares Total return ratio 35,000 50% 50% 30,000 25,000 40% 20,000
Slide 17: Steady and continuous dividend payments
Steady and continuous dividend payments, on track for 17 consecutive periods of increased dividends Raise dividend payout ratio by stages Dividends per share (JPY) Annual dividend (JPY) Consolidated divident payout ratio 35% 30 30% Approx. 24% 25% 20 20% 15% 24 10 20 10% 15 16 13 13 11 11 5% 9 8 0
Slide 18: Swiftly acquire stocks through buy-back
Swiftly acquire stocks through buy-back based on cash conditions Stock buy-back acquisition graph (100 millions of yen) Stock buy-back acquisition 150 140 140 130 120 110 100 90 76 80 65 50 0 '10/3 '11/3 '12/3 '13/3 '14/3 '14/12*1 '15/12 '16/12 '17/12 *1： 9-month FY irregular settlement Copyright
Slide 19: Raising Corporate Value
Raising Corporate Value Copyright (c) Unicharm 2012 Unicharm Corporation. Corporation. All rights All rights reserved. reserved.
Slide 20: Unicharm Value creation model
With 6 types of UC-style capital, as we work to resolve social issues, raise “Earning Potential” and promote “Realizing a cohesive society” Unicharm Value creation model Unicharm corporate NOLA&DOLA principles From babies, to the elderly, and pets, reducing burden carried with a diversity of lifes
Slide 21: Environment: Promoting a recycling model
Environment Promoting a recycling model in collaboration with local groups Aiming to create products that are environment- friendly throughout their life-cycles Waste reduction Recycling system in development by Unicharm ・Sorting ・Resource-saving ・Energy-saving (fecal matter in From hospitals and ・F
Slide 22: Cost reduction by promotion of environmentally-friendly products
Environment Cost reduction by promotion of environmentally-friendly products Response to climate Product creation that aimed for reduction in use of raw materials changes Approx. 3/4 reduction compared to 25 years ago Cut waste in manufacturing Making products by using waste ECO CHARMING Mark produc
Slide 23: Sustainable procurement of raw materials and CO2 reduction
Environment Initiatives for sustainable procurement of raw materials and promotion of CO₂ reduction Sustainable procurement of Initiative for climate change raw materials Environmentally- Paper/pulp Palm oil friendly products Third party certified •Palm oil (kernel oil/fruit oil） •Primary processed
Slide 24: Social contributions using Unicharm's positive image
Social Engage in social contributions that make use of Unicharm’s positive image to increase number of UC fans ◆BC Achieving an ideal child-rearing environment for ◆FC Changing women’s “discomfort” during parents and children menstruation into “comfort” App to supporting toilet training for children
Slide 25: Governance: employee health and productivity
Governance Reinforcement of initiatives with the goal of employee health maintenance and productivity improvement Telecommuting system Avg 2 days/month Interval work shift system Income system revised Approx. 25％ improvement Salary raised about 5％ Establish the “Work-style reform development office”
Slide 26: Revitalization of Japan markets for all categories
Revitalization of Japan markets for all categories New products for FY 2018 spring (Japan) Copyright Copyright (c) (c) Unicharm Corporation. 2012 Unicharm All rights Corporation. reserved. All rights reserved. 26
Slide 27: Copyright Corporation. All rights
Copyright Copyright (c) (c) Unicharm Corporation. 2012 Unicharm All rights Corporation. reserved. All rights reserved. 27