Shiseido Company,limited · TSE:4911
Shiseido Company,limited — Shiseido Co Ltd Ord — Q1 2023 Earnings Presentation
23 slides from Shiseido Company,limited's earnings presentation, May 12, 2023
Slide 1: 2023 First Quarter Results
2023 First Quarter Results (January—March) May 12, 2023 Shiseido Company, Limited Takayuki Yokota Chief Financial Officer SHISEIDO
Slide 2: Forward-looking statements
In this document, statements other than historical facts are forward-looking statements that reflect our plans and expectations. These forward-looking statements involve risks, uncertainties, and other factors that may cause actual results and achievements to differ from those anticipated in these s
Slide 3: 2023 Q1 Key Headlines
2023 Q1 Key Headlines Expansion Trend in Japan Primarily from High Price Range Strong Americas and EMEA Drove Overall Sales, Recovering YoY Decline in China and Travel Retail Profit Increased from Higher Sales and Agile Cost Management > Like-for-like (LfL)’ sales:+7% - High price range drove the st
Slide 4: 2023 Q1 (January—March): Executive Summary
2023 Q1 (January—March): Executive Summary “i % of % of YoY YoY YoY Fx- YoY @illion yen) 2022 Q1 Net Sales 2023 Q! Net Sales Change Change% Neutral% LfL2% Net Sales 234.0 100% 240.0 100% +6.0 +2, 6% —3.6% +6.6% Core Operating Profit 5. 2% +8.2 +186. 3% Non-recurrent Items ~9. 8% +140.5% “Operating P
Slide 5: Global Brands SHISEIDO, Clé de Peau Beauté, NARS, and Drunk Elephant
Global Brands SHISEIDO, Clé de Peau Beauté, NARS, and Drunk Elephant Delivered Outstanding Results, Leading the Entire Sales Growth FX, etc. Net Sales by Brand — Like-forlike* brands (Billion yen) Drunk - Fragrance Elephant — ELIXIR ane 19% ig Ts = 5 NARS 5 Other s IPSA Cléde Gy , brands Peau _ ~24%
Slide 6: Net Sales Trend: Steady Recovery in Japan, Americas & EMEA Strong
Net Sales Trend: Steady Recovery in Japan, Americas & EMEA Remained Strong, China on a Recovery Trend after January Bottom, Travel Retail Impacted by Retailer Inventory Adjustments 2022 2023 Like-for-like Ql Q2 Q3 Q4 FY Ql Ql Japan —3% —2% +9% —3% +0% —32% +8% China -14% -14% —2% -8% -10% +10% —3% A
Slide 7: Japan: Steady Sales Recovery Driven by High Price Range
Japan: Steady Sales Recovery Driven by High Price Range Local Market LfL @ QI market: > Local: * Growth rate improved each month ¢ Low and high price ranges drove the market, while mid price range remained flat YoY ¢ All channels and all categories grew > Inbound: Recovery trend from increase in tra
Slide 8: China: Recovery in February - March from January Affected by Infection Cases
China: Recovery in February - March from January Affected by Infection Cases Offline Sales Turned to Growth after Six Quarters @ QI Market: > Offline: Weak in January, recovered in February - March > EC: Women’s Day promotion weak ® Shiseido Consumer Purchases’ Business total: Q1 —low single digit%
Slide 9: Americas, EMEA, and Asia Pacific Continued Strong, Driving Entire Sales
Americas, EMEA, and Asia Pacific Continued Strong, Driving Entire Sales Americas Strong growth driven by Drunk Elephant and NARS Growth in all categories, market expansion @ Shiseido External Sales: Q1 +30% >» Drunk Elephant: +over 2x > EC: +low 20% Q1 Market EMEA Strong momentum continued Growth co
Slide 10: COGS Ratio: Steadily Improved on a Like-for-like Basis
COGS Ratio: Steadily Improved on a Like-for-like Basis, despite the Impact of Kuki Factory Transfer in 2023 Q1 2022 2023 Full Year Qi COGS 30.3% 29.4% COGS LfL" 23.6% 21.6% COGS 34.5% eececce COGS LfL" 30.6% 29.4% 28.7%, 9 20.0% | 24.8% 23.8% 000° wr eee. “*e. 21,0% 21.6% 2022 2023 Qi Q2 Q3 a4 ai Q1
Slide 11: Core Operating Profit by Reportable Segment
Core Operating Profit by Reportable Segment: Profit Improved thanks to Higher Sales and Continued Agile Cost Management Japan: Increased thanks to higher margins coming from sales growth, and cost efficiency initiatives China: Asia Pacific: Increased thanks to cost management, etc., despite lower ma
Slide 12: Japan: Expand the Skincare User Base and Strengthen Activities
Japan: Expand the Skincare User Base and Strengthen Activities to Capture the Consumer Demand post Mask Removal CD cle de peau BEAUTE ELIXIR am a | i p re Utes. = INU JOB EAPYYY TONER AB
Slide 13: China: Brand Equity Enhancement and Sustained Profitability Improvement
China: Brand Equity Enhancement and Sustained Profitability Improvement | @ Vv Accelerate Offline Growth, Enhance Response to Online Platform Diversification er | Ma | cle de peau BEAUTE Acquiring Luxury Users Strengthen the Supreme Series “Height of Radiance” campaign Mother’s Day & 5.20 promotion:
Slide 14: みんな、いい顔してる。 SHISEIDO
Slide 15: Be a Globes Winner
STMSEIDO Be a 2 Globes Winner
Slide 16: Supplemental Data: KPI Trends
Supplemental Data 1 KPI Trends mmm Net Sales Core Operating Profit —-Core Operating Profit Margin (Billion yen) 5.2% 2021 2022 2023 16
Slide 17: Supplemental Data: Net Sales and Core Operating Profit by Segment
Supplemental Data 2 Net Sales and Core Operating Profit by Reportable Segment Top: Net Sales 2022 9 2023 9 YoY . Bottom: Core OP foals Nas hoy crore x Change _Like-for-like %? (Billion yen) Qi 2 Qi 2 9 ge % _EX:Neutral % 57/1 +4.6 +8.0% +8.0% +8.4% Japan 426 . 2.9% +0.7 - - - China -8.0% +15.7% . ;
Slide 18: Supplemental Data: Net Sales by Category
Supplemental Data 3 Net Sales by Category (Billion yen) YoY Change % / . Ja an “or Net ees Or Net eaes change YoY Change, Like-for-like™* P EX-Neutral % Prestige 16.1 28.2% 18.1 29.3% +2.0 +12.3% Premium 34.5, 60.3% 36.7 59.4% +2.2 +6.4% Others 6.6 11.5% 6.9 11.3% +0.4 +5.9% Total Japan Sales 571 10
Slide 19: Supplemental Data: Cost Structure
Supplemental Data 4 Cost Structure (% of Net Sales based on Core Operating Profit ) SG&A 69.9% 67.3% Marketing 24.2% ey) investments 23.0% 1.2 pts Brand development/ 35% Tere Personnel expenses” +0.7 pts Other SG&A —0.4 pts 2022 Ql Ql * Including POS personnel expenses @ Marketing investments > Lowe
Slide 20: Supplemental Data: SG&A
Supplemental Data 5 SG&A YoY aye 2022 % of 2023 % of YoY YoY Change (Billion yen) Ql Net Sales Ql Net Sales Change Change % FX- Neutral % Marketing 4 80.9 34.6% 79.2 33.0% —1.7 -2.1% -71% Investments Bea evelopment / 12.2 5.2% 84 3.5% -3.8 -31.3% 32.5% nvestments Personnel Expenses 29.9 12.8% 33.3 1
Slide 21: Supplemental Data: Cash Flow Management
Supplemental Data 6 Cash Flow Management (Billion yen) Free Cash Flow: +4.1 Operating CF: +2.9 Investing CF: +1.1 « . Inventories 139.6 151.6 148.2] 130.9 134.7 (Billion yen) _ 150 153 Depreciation, DSI (Days) 185 185 163 . . amortization and (210) (220) impairmentloss 419.8 Net D/E ratio 0.09 on on
Slide 22: Supplemental Data: Non-recurrent Items
Supplemental Data 7 Non-recurrent Items 2022 2023 (Billion yen) Qi Qi Core Operating Profit 44 12.5 Gain on Transfer of Business Gain on Sales of Fixed Assets - 24 Structural Reform Expenses Impairment Loss - Structural Reforms-Related 0.1 Profit (Subsidy income) 0.1 Loss (Salaries and allowances fo
Slide 23: SHISEIDO
SHI/SEIDO