Unicharm Corporation · TSE:8113
Unicharm — Investor Presentation (April 2014)
41 slides from Unicharm's investor presentation, Apr 30, 2014
Slide 1: Fiscal Year 2014 Unicharm Presentation Materials for Investor Meeting
Fiscal Year 2014 Unicharm Presentation Materials for Investor Meeting April 30, 2014 Takahisa Takahara President and CEO Unicharm Corporation Projections stated herein include those based on the Company’s assumptions, forecasts and plans as of April 30, 2014. Therefore, actual results may differ sig
Slide 2: To 10% of Global Market share
To 10% of Global Market share Accelerate growth utilizing strength of No. 1 position in Asia Aggressive strategic investments by focusing on emerging markets Market share 2013 (over previous fiscal year) World No.3 8.6% (+0.4%) Asia No.1 27.2% (+0.6%) Copyright (c) Unicharm Corporation. All rights r
Slide 3: Area with the greatest population growth by 2020: Asia
Area with the greatest population growth by 2020: Asia, up 270 mil. people Europe (10%) Asia (57%) North America (5%) 744 745 738 4719 4428 355 376 403 4160 2013 2020 2030 2013 2020 2030 MENA (5%) 315 341 389 2013 2020 2030 2013 2020 2030 Africa (14%) Oceania (1%) Latin America (9%) 1402 935 1110 61
Slide 4: Operating Environment Review: FY2014
Operating Environment Review: FY2014
Slide 5: Ordinary income and net income exceed released figures
Ordinary income and net income exceed released figures, absorbing decline in foreign exchange gains and higher effective tax rate Year-on-Year Comparison (Millions of yen) Difference FY2014 FY2013 Difference Note (%) Asia Net sales 599,455 495,771 103,684 20.9% Up ¥67.0 billion Operating income 67
Slide 6: Operating income increased ¥7.8 billion
Operating income increased ¥7.8 billion, with higher gross profit due to a sales increase offsetting higher sales promotional costs, etc. Changes in Operating Income 67.2 Increase in billion yen 59.4 billion yen gross profit due to sales increase of ¥103.6 billion +47.4 Impact of steep Impact of p
Slide 7: Overseas sales composition reached an all-time high of 57.7%
Overseas sales composition reached an all-time high of 57.7% driven by steadily increasing sales composition in Asia Changes in Domestic and Overseas Net Sales (Billion yen) 57.7% 900 60% 850 52.6% 800 46.9% 50% 750 42.4% 42.8% 700 38.5% 36.9% 37.1% 38.2% 650 40% 33.9% 600 31.4% 550 26.9% 30% 500
Slide 8: Operating Income Margin by Geographical Segment
Profitability reached record high in Japan, and was high in other areas at levels on par with Asia when excluding China and Pet Care Business in North America Operating Income Margin by Geographical Segment 20.0% Japan Asia Others Consolidated 15.5% 15.1% 15.0% 14.0% 13.6% 13.8% 12.4% 13.3% 12.4%
Slide 9: Personal Care Business was the driver for increase in sales and profits
Personal Care Business was the driver for increase in sales and profits Business Segment Information (Millions of yen) Personal Pet Care Elimination/ Others Total Consolidated Care Companywide FY2013 Net sales 417,187 73,182 5,401 495,771 - 495,771 Operating income 55,478 3,618 360 59,457 31 59,48
Slide 10: Increase in sales and income due to exchange rate
Increase in sales and income due to exchange rate (year-on-year comparison) Net sales increased approx. ¥52.7 billion year on year, while operating income increased approx. ¥0.2 billion Exchange rate for Exchange rate for Currency Change in rate FY2013 FY2014 Taiwan (TWD) 2.81 3.36 19.6% Thailand (T
Slide 11: BC: Trend for Average (retail) Price per Unit of Disposable Diaper
BC: Trend for Average (retail) Price per Unit of Disposable Diaper China Thailand (RMB) (Baht) 1.60 12.00 1.50 11.00 1.40 10.00 1.30 9.00 1.20 8.00 1.10 7.00 1.00 6.00 Indonesia Japan (Rupiah) 23.00 (Yen) 2,100 22.50 2,000 22.00 1,900 21.50 1,800 21.00 1,700 20.50 20.00 1,600 (*) Prices in Japan inc
Slide 12: FC: Trend for Average (retail) Price per Unit of Sanitary Product
FC: Trend for Average (retail) Price per Unit of Sanitary Product China Thailand (RMB) (Baht) 0.60 3.20 0.55 3.00 2.80 0.50 2.60 0.45 2.40 0.40 2.20 2.00 0.35 1.80 0.30 1.60 Indonesia Japan (Rupiah) (Yen) 600 9.60 9.40 550 9.20 500 9.00 450 8.80 8.60 400 8.40 350 8.20 300 8.00 Copyright (c) Unicharm
Slide 13: Financial Results Forecasts for Fiscal Year Ending December 31, 2014
Financial Results Forecasts for Fiscal Year Ending December 31, 2014
Slide 14: Change in fiscal year from March 31 to December 31
Change in fiscal year (closing date of the business year) from March 31 to December 31 The Company plans to change its fiscal year (closing date of the business year) from March 31 to December 31, and accordingly the fiscal year ending in December 31, 2014 will be a transitional period. The chan
Slide 15: We expect record-high results in the fiscal year ending December 31, 2014
We expect record-high results in the fiscal year ending December 31, 2014 (Millions of yen) Fiscal year ending FY2014 Change (Amount) Change (%) December 31, 2014 Net sales 540,000 599,455 ― ― Operating income 56,600 67,240 ― ― Operating income margin 10.5% 11.2% Ordinary income 55,000 67,913 ― ― Or
Slide 16: Foreign exchange rate sensitivity to a 1% depreciation of the yen
Foreign exchange rate sensitivity to a 1% depreciation of the yen vis-à-vis local currencies increases net sales and operating income approx. ¥3,500 million and ¥300 million, respectively Impact of a 1% change (depreciation of yen) Assumed rate for FY (Millions of yen) Currency ending Dec 31, 2014 N
Slide 17: Overview: Corporate Strategy
Overview: Corporate Strategy (Information and data noted here is from Unicharm)
Slide 18: Achieved higher sales growth than market growth in Japan
Achieved higher sales growth than market growth due to effect of introducing Japan high value-added products Baby Care (BC) Share No.1 34.2% 日本BC市場規模 BC market scale in Japan UC BC売上高 BC market scale in US 2012 2013 Net sales by brand 1.25X 1.26X 1.19X 1.21X 1.10X 1.0X 1.0X 1.01X 0.98X Premium Sub-c
Slide 19: Expand sales with a focus on light incontinence
Expand sales with a focus on light incontinence Japan category to further dominate the market Health Care (HC) Retail market total Light adult incontinence market 60 60 40 Share Share 20 No.1 51.6% 40 No.1 60.4% 20 Competitor A 14.1% Competitor A 15.2% Competitor B 10.1% Competitor B 9.6% 0 0 2011/3
Slide 20: China: BC and FC market share
BC is currently being strengthened for expansion to regional and urban growth channels FC has gained second-highest market share due to China shifting of target to youth generation Baby Care (BC) 40 Share 20 Competitor A 30.1% No.2 13.6% Competitor B 12.7% 0 2012/2 2013/2 2014/2 Feminine Care (FC) S
Slide 21: Indonesia: BC and FC market share
Accelerate dominant position in BC with economy type diapers FC has captured almost 40% market share with high value-added products Indonesia Baby Care (BC) Share 60 40 No.1 65.8% 20 Competitor A 18.0% Competitor B 0 9.1% 2012/2 2013/2 2014/2 Feminine Care (FC) 45 Share 35 25 Competitor A 35.4% No.1
Slide 22: Achieved No. 1 market share just months after health care entry
Achieved No. 1 market share just 11 months after full scale entry of health care category Indonesia Health Care (HC) Share No.1 80 No.3→ 60 5.4%→31.3% (2013/1) (2014/1) 40 Competitor A 76.7% → 31.0% 20 Competitor B 9.2% →2.9% 0 2013/1 2014/1 Copyright (c) Unicharm Corporation. All rights reserved. 2
Slide 23: Accelerate regional development and reinforce production capacity in Indonesia
Accelerate regional development, reinforcement of production capacity and improvements to logistics Indonesia -related costs through new plant operations Indonesia Jakarta Plants No. 1 and 2 Surabaya Plant No. 3 has started operation Copyright (c) Unicharm Corporation. All rights reserved. 27
Slide 24: Thailand: BC and FC market share
Aiming for further expansion of market Thailand share by expanding product lineup Baby Care (BC) Share 60 40 Competitor A 29.7% No.1 61.2% 20 Competitor B 4.6% 0 2012/2 2013/2 2014/2 Feminine Care (FC) Share 40 Competitor A 35.9% No.1 49.5% 20 Competitor B 12.3% 0 2012/2 2013/2 2014/2 24 Copyright (
Slide 25: Led market growth through expanded sales of Happy Pants
Led market growth through expanded sales of Happy Pants, a disposable Thailand diaper for daytime use Number 使用枚数 of pieces 昼間使用率 Daytime usage ratio Daytime usage ratio used 50% Launch of Happy Pants July 2010 40% 20%→ 50% 50 Number of pieces used per month 28% 30% 39 pieces 20% 50 54 Pieces →54 pi
Slide 26: India: Expanded sales of economy pants type diaper
Expanded sales of economy pants type diaper India led to take No. 2 market share position! Baby Care (BC) 70 Share 60 Competitor A No.2 No.3→ 50 54.3% → 56.5% 40 12.1%→22.6% (2012/2) (2014/2) 30 20 Competitor B 27.6% → 18.3% 10 0 2012/2 2013/2 Copyright (c) Unicharm Corporation. All rights reserved.
Slide 27: Launch of XS size pants type diaper in India
Launch of XS size pants type diaper Aimed at attracting new users and encouraging India use of pants type diapers at early stage 売上 Net パンツ比率 Pants usage ratio Launch of XS pants sales Permeation of October 2013 39% 0 pants strategy Pants usage ratio 00 0 00 26% 0 0 26%→ 39% 00 19% 0 00 13% 0 Net sa
Slide 28: Steadily expand the number of cities we operate in
Steadily expand the number of cities we operate in Further promote the penetration of Baby disposable India diaper mainly focused on pants type Number of cities in operation 3040 2407 1884 2015 3,000 cities Major expansion 08/3 09/3 10/3 11/3 12/3 13/3 14/3 14/1215/12 Copyright (c) Unicharm Corporat
Slide 29: Vietnam: BC and FC market share
BC will promote spread of standard pants type diaper FC is near top market share due to reinforcement Vietnam of high value-added products Baby Care (BC) 50 Share 40 30 Competitor A 34.4% No.1 40.4% 20 Competitor B 18.0% 10 2012/2 2013/2 2014/2 60 Feminine Care (FC) Share 40 Competitor A 45.1% No.2
Slide 30: Higher share in Middle East region in Saudi Arabia
Higher share in Middle East region Saudi Arabia due to acclaim for high quality Share of Baby Care Market in 2013 Copyright (c) Unicharm Corporation. All rights reserved. 34
Slide 31: Introduce new products infused with Japan's expertise in the U.S.
Introduce new products infused with Japan’s expertise in growth segments achieved market U.S. share increase Dog Pads Flea and Tick Controls Cat Litter Cat Snacks With fresh Best Generic Best Standard Premium scent UC UC Hartz Hartz UC UC technology technology technology technology technology techno
Slide 32: Ninth Medium-Term Management Plan
Ninth Medium-Term Management Plan
Slide 33: Three 15% G20 plan targets ¥1.6 trillion in net sales in 2020
Three 15% G20 plan targets ¥1.6 trillion in consolidated net sales in 2020 Management targets Capital Growth potential Profitability Sales growth rate Operating income margin efficiency rate ROE 15% 15% 15% Copyright (c) Unicharm Corporation. All rights reserved. 37
Slide 34: Consolidated net sales plan
Ninth medium-term management plan Consolidated net sales plan Eighth plan Ninth plan (April 2014 – Eighth medium-term management plan (April 2011 – March 2014) December G20 plan (April 2011 – March 2014) 2016) Average Target of 15.0% ¥1.6 trillion annual growth average annual Initial sales target: ¥
Slide 35: Big Five Strategy
Big Five Strategy 1. Focus on priority countries and regions 2. From product creation to value creation - Innovation and brands - 3. Personal care business Thoroughly entrench and spread “Unicharm winning pattern” 4. Pet care business “Distinctive differentiation” in Japan, US, China and Taiwan 5. M
Slide 36: Portfolio supporting continual growth
Portfolio supporting continual growth North America and Europe Secure low-risk revenue efficiently through licensing and export business Middle East and North Africa Work to become dominant in neighboring countries, particularly KSA and Egypt North America pet care East Asia, ASEAN, India Focus on d
Slide 37: The company ranked high in JPX Nikkei 400
Reference The company ranked high in JPX Nikkei 400 Unicharm is ranked 26th out of Nikkei 225 JPX Nikkei 400 the companies included in the JPX Nikkei 400 (our estimate). Unicharm We will manage the company with a focus on 73 152 248 ROE (capital efficiency), operating income companies companies co
Slide 38: Shareholder Return Policy
Shareholder Return Policy NOLA&DOLA
Slide 39: ¥2 increase in dividends over initial plan of ¥36
¥2 increase in dividends over initial plan of ¥36 *Fiscal year ending Dec. 31, 2014 is a transitional nine-month Change in dividends fiscal period: Actual increase in dividends (yen) Initial dividend forecast of ¥36 + ¥2 increase = ¥38 * Copyright (c) Unicharm Corporation. All rights reserved. 43
Slide 40: Forecast a 50% total shareholders' return
We will continue to pay dividends that are consistent with earnings and increase dividends in fiscal year ending Dec. 2014 through the share buy back, and forecast a 50% total shareholders’ return. *Fiscal year ending Dec. 2014 is an irregular fiscal year lasting nine months. (Million yen) Dividends
Slide 41: Copyright (c) Unicharm Corporation. All rights reserved.
Copyright (c) Unicharm Corporation. All rights reserved. 45