Unicharm Corporation · TSE:8113
Unicharm — H1 FY2013 Earnings Presentation
48 slides from Unicharm's earnings presentation, Oct 31, 2012
Slide 1: First Half of Fiscal Year 2013 Presentation Materials for Investor Meeting
First Half of Fiscal Year 2013 Unicharm Presentation Materials for Investor Meeting October 31, 2012 Takahisa Takahara President and CEO Unicharm Corporation Projections stated herein include those based on the Company’s assumptions, forecasts and plans as of October 31,2012. Therefore, actual resul
Slide 2: Table of Contents
Table of Contents 1. Financial Performance Review: 1H of FY2013 P3 2. Operating Environment Review: 1H of FY2013 P15 3. Financial Results Forecasts for FY2013 P21 4. Overview: Corporate Strategy P25 5. Shareholder Return Policy P44 Copyright (c) 2012 Unicharm Corporation. All rights reserved. 2
Slide 3: 1. Financial Performance Review: 1H of FY2013
1. Financial Performance Review: 1H of FY2013 Copyright (c) 2012 Unicharm Corporation. All rights reserved.
Slide 4: Year-on-Year Comparison
Net sales and operating income achieved an all-time high year on year; up 17.8% and 8.9%, respectively Year-on-Year Comparison （Millions of yen） Difference Difference Assessment 1H FY2012 1H FY2013 (Amount) (%) Net sales 199,354 234,859 35,505 17.8% ○ Operating income 25,457 12.8% 27,735 11.8% 2,2
Slide 5: Changes in Operating Income
Operating income increased approximately ¥2.3 billion, with higher gross profit due to a sales increase offsetting increased sales promotion costs, etc. Changes in Operating Income Increase in gross profit due 27.7 billion yen 25.4 billion yen to sales increase of ¥35.5 billion +16.3 Impact of pro
Slide 6: Geographical Segment Information
Both sales and profits largely increased in Asia Geographical Segment Information (Millions of yen) Europe, Elimination/ Japan Asia Middle East, Total Consolidated Company-wide etc. 1H FY2012 Net Sales 112,122 67,981 19,250 199,354 ‐ 199,354 Operating income 14,573 10,347 587 25,507 (50) 25,457 1H
Slide 7: Operating Income by Geographical Segment
Aggressive marketing campaigns expenditures in Asia, but the region continues to sustain high profitability Operating Income by Geographical Segment 20.0% 15.3% 15.2% 15.0% 13.9% 14.0% 13.0% 12.1% 12.4% 12.2% 12.0% 10.9% 10.7% 12.8% 10.5% 9.2% 12.4% 12.0% 11.8% 10.0% 9.4% 9.2% 12.4% 7.0% 9.2% 9.0%
Slide 8: Business Segment Information
Sales and profits expanded in personal care and pet care businesses Business Segment Information (Millions of yen) Personal Elimination/ Pet Care Others Total Consolidated Care Company-wide 1H FY2012 Net Sales 173,705 22,763 2,885 199,354 - 199,354 Operating income 23,273 1,947 224 25,445 12 25,45
Slide 9: Changes in Domestic and Overseas Net Sales
Sales contribution of overseas business reached an all-time high of 51.7% driven by the steady sales growth in Asia Changes in Domestic and Overseas Net Sales (Millions of yen) 60% 470,000 51.7% 430,000 50% 44.1% 390,000 42.0% 38.8% 38.3% 350,000 36.9% 37.2% 40% 34.0% 310,000 32.2% 31.2% 270,000 2
Slide 10: Change in Selling, General and Administrative Expenses Year-on-Year
Sales promotion and advertisement costs increased due to aggressive marketing campaigns Change in Selling, General and Administrative Expenses Year-on-Year (Consolidated) (Millions of yen) 1H FY2012 1H FY2013 Ratio to Ratio to Change Change Amount net sales Amount net sales (Amount) (% ) Freight-o
Slide 11: Change in Non-Operating Income/Loss Year-on-Year
Foreign exchange losses were incurred due to the evaluation loss of loans in foreign currencies (loans to affiliates) Change in Non-Operating Income/Loss Year-on-Year (Consolidated) (Millions of yen) 1H FY2012 1H FY2013 Change Amount Amount (Amount) Major causes Non-operating income Interest recei
Slide 12: Change in Extraordinary Income/Loss Year-on-Year
Structural improvement expenses were incurred for Australian affiliate Change in Extraordinary Income/Loss Year-on-Year (Consolidated) (Millions of yen) 1H FY2012 1H FY2013 Major causes Amount Amount Change Extraordinary income Gain on sale of fixed assets 1 24 23 Others 1 6 5 Total 3 31 28 Extrao
Slide 13: Change in the Consolidated Balance Sheet - Assets
Tangible fixed assets increased mainly due to the construction of new factories Change in the Consolidated Balance Sheet－Assets Year-on-Year (Millions of yen) As of Mar. 31, 2012 As of Sep. 30, 2012 Change Amount Percentage Amount Percentage Assets % % I Current assets 190,637 40.3 191,307 39.8 66
Slide 14: Change in the Consolidated Balance Sheet - Liabilities and Net Assets
Ratio of shareholders’ equity improved from 45.1% to 46.7% Change in the Consolidated Balance Sheet―Liabilities and Net Assets Year-on-Year (Millions of yen) As of Mar. 31, 2012 As of Sep. 30, 2012 Change Amount Percentage Amount Percentage Liabilities % % I Current liabilities 106,361 22.5 102,60
Slide 15: 2. Operating Environment Review: 1H of FY2013
2. Operating Environment Review: 1H of FY2013 Copyright (c) 2012 Unicharm Corporation. All rights reserved.
Slide 16: Changes in Naphtha and Pulp Prices
Recent naphtha prices continue to be on an upward trend, while pulp prices have shifted to a downward trend Changes in Naphtha and Pulp Prices (US$/ｔ) 1200 900 600 Naphtha Pulp 300 0 '09/4 '09/6 '09/8 '10/2 '10/4 '10/6 '10/8 '11/2 '11/4 '11/6 '11/8 '12/2 '12/4 '12/6 '12/8 '09/10 '09/12 '10/10 '10/
Slide 17: Year-on-year Difference in Raw Material Costs
Procurement costs increased by ¥0.3 billion due to soaring basic raw materials costs For FY2013, procurement costs are projected to rise by ¥0.1 billion due to a temporary drop in basic raw materials costs Year-on-year Difference in Raw Material Costs (Billions of yen) +7.2 +0.3 +0.1 +8.0 +5.6 +3.
Slide 18: Impact of Exchange Rate Fluctuations
The yen continues to rise against all currencies except the Chinese RMB Net sales and operating income dropped year on year by ¥4.0 billion and ¥0.3 billion, respectively Impact of Exchange Rate Fluctuations (year-on-year comparison) (Millions of yen) Operating Exchange rate Exchange rate Change i
Slide 19: Disposable Diapers: Changes in Retail Price per Piece
Retail prices of disposable diapers in Asia rose gradually In Japan, the prices leveled off after experiencing a dip Disposable Diapers: Changes in Retail Price per Piece (Average of All Manufacturers) China Thailand 1.4 (RMB) 12.00 (Baht) 1.3 11.00 1.2 10.00 1.1 9.00 1 8.00 0.9 7.00 0.8 6.00 2 3
Slide 20: Sanitary Products: Changes in Retail Price per Piece
In Thailand and Indonesia, the retail prices of female sanitary products remained stable, while the prices in China continued to post an increase through the introduction of high-value-added products Sanitary Products: Changes in Retail Price per Piece (Average of All Manufacturers) China Thailand
Slide 21: 3. Financial Results Forecasts for FY2013
3. Financial Results Forecasts for FY2013 Copyright (c) 2012 Unicharm Corporation. All rights reserved.
Slide 22: Financial Results Forecasts for 1H and Full Year FY2013
Operating income surpassed the forecast substantially, even though net sales fell short of the forecast for 1H of FY2013 Financial Results Forecasts for 1H of FY2013 (Millions of yen) 1H FY2013 1H FY2013 Change Achievement Forecasts Results (Amount) Rate (%) Net sales 235,000 234,859 -140 99.9% Op
Slide 23: Changes in EPS
EPS decreased in FY2012 due to the impact of the revised taxation system (about ¥13.2 billion) EPS for FY2013 is expected to be ¥171.91 Changes in EPS (Yen） 200.00 178.11 180.00 171.91 160.00 144.95 140.00 128.56 120.00 100.00 86.46 89.44 80.09 81.42 76.45 77.44 80.00 59.10 61.76 60.00 50.18 46.62
Slide 24: Changes in Cash Flow
Cash flow was actively utilized for sustainable business growth Changes in Cash Flow （Billions of yen） 53.1 43.0 45.4 41.6 40 34.1 36.7 29.2 27.8 29.3 30.4 25.7 23.3 20 15.3 16.8 13.8 13.1 8.3 3.8 3.3 0.2 0 '03/3 '04/3 '05/3 '06/3 '07/3 '08/3 '09/3 '10/3 '11/3 '12/3 '13/3E キャッシュフロー Cash flow フリーキャ
Slide 25: 4. Overview: Corporate Strategy
4. Overview: Corporate Strategy Copyright (c) 2012 Unicharm Corporation. All rights reserved.
Slide 26: Maintained high sales growth in China
Maintained high sales growth in China, comprising over 10% of the Company’s sales. Baby care business ranked second, expanding the share to 17.3% in August 2012 In addition to the standard type, economical disposable diapers were introduced to fully develop the volume zone (middle-income segment)
Slide 27: Expand the market to other cities and develop distribution channels
Expand the market to other cities and develop distribution channels swiftly in tandem with growth in demand from middle-income segment in inland China As of September 2012, the number of Chinese cities in which Unicharm has increased its business is over 700. The expansion will be further accelera
Slide 28: Feminine care business developed overseas by accommodating local needs
The feminine care business developed overseas by accommodating local needs Overseas business growth accelerated with the Chinese market at its core Accelerated overseas business growth Favored by young consumers in China Further acceleration of overseas growth Advertising, packaging, and display
Slide 29: Increase production sites in China to realize an effective supply chain
Increase production sites in China to realize an effective supply chain Under the policy of locating production in proximity to the market, increase production sites along with the expansion of sales areas In August 2012, the fourth plant in China began operation in Tianjin. To offer a stable an
Slide 30: Indonesia: accelerate penetration across the archipelago
In Indonesia, which boasts a solid No.1 share, accelerate penetration across the archipelago for further business growth In Indonesia, Unicharm has the No.1 market share in both baby care and feminine care businesses To expand the market, the third plant is planned to be constructed in Surabaya
Slide 31: In Thailand, the baby care business boasts a solid No.1 share
In Thailand, the baby care business boasts a solid No.1 share With the launch of daytime disposable diapers Happy Pants, daytime use rate rose 132% Maintained a solid No.1 share in baby care business Launched daytime disposable diapers Happy Pants in August 2010 Succeeded in creating a market
Slide 32: Vietnam: No. 2 share in baby care after acquiring Diana
In Vietnam, achieved No. 1 share in two major cities in baby care business after acquiring Diana, and expanded share in the feminine care market Accelerated business growth by integrating UC’s product development capabilities and production technologies with Diana’s sales network and consumer unde
Slide 33: Business in India grew to a market share of 11.9%
Business in India grew to a market share 11.9% of approx. two years after entry into the baby care market Accelerated the creation of the pants category (achieved 13.2% recently) Changes in baby care market share in India Promote the use of pants-type diaper (six months moving average) and market di
Slide 34: MENA area: direct investment in Egypt finalized
In the MENA area, direct investment in Egypt has been finalized and preparations are being made to secure medium- to long-term business opportunities Egypt plant scheduled to begin Market size of the MENA area operations in FY2013 The market for absorbent products grew at Market expansion antici
Slide 35: Health care business in Japan expanded its retail share to 49.7%
The health care business in Japan expanded its retail share to 49.7% Continue to develop each marketing channel aggressively to further dominate the market Most recent trends in the health care business Charmnap and Lifree are the driving force of the in Japan light incontinence care market Improv
Slide 36: Elderly population in Asia will double in 20 years
The elderly population in Asia will double in 20 years In the future, possible to deploy senior care practice developed in Japan to other countries in Asia Changes in the population of people aged Introduce the Japanese care model to 65 and over in Asian countries overseas markets (Million persons)
Slide 37: Baby care in Japan: two-brand strategy and full lineup
Aim for growth in the baby care business in Japan by stabilizing prices based on the two-brand strategy and offering a full lineup that only Unicharm possesses Two-brand strategy Full lineup The only manufacturer that can offer The only manufacturer that can offer premium and standard lineups a full
Slide 38: Feminine care business in Japan
While the overall market continued to shrink, the feminine care business in Japan penetrated the market with high value-added product categories, expanded its market share, and improved the profit ratio Feminine care business share in Japan Operating results for the feminine care business in Japan
Slide 39: Accelerated sales growth of Hada Omoi, Center-In Compact, and Kiyora
While the overall Japanese market continues to shrink, Unicharm succeeded in creating its unique position, further accelerating growth Accelerated sales growth of Hada Omoi, Center-In Compact, and Kiyora Hada Omoi: Easiest on sensitive skin Unique positioning Center-In Compact: The only napkins
Slide 40: Pet care: reinforce segmentation, brand value, and lineups
Further reinforce segmentation, brand value, and lineups Post definite sales growth in both foods and toiletries in the Japanese market Identify and cater to specific needs Create a new market for urination diapers for male dogs Further expand the share in the diaper market (%) Unicharm (%) 80 Uni
Slide 41: Accelerate globalization in the U.S. and China
Accelerate globalization upon building a solid position in the U.S. and China Business scale doubled in the U.S. Expand business areas in the Chinese market The Hartz Mountain Corporation boasts the No.1 Share in Shanghai (entered in 2010) is expanding position in six categories in the U.S. mark
Slide 42: Opening and closing production sites across the world
Meet new demand that emerges simultaneously in different areas in advance Take proactive steps in opening and closing production sites across the world China Egypt The fourth plant in China began operation in Tianjin A new plant will start in August 2012 operation in 2012 The fifth plant will
Slide 43: Participation in Business Call to Action (BCtA)
Participation in Business Call to Action (BCtA), a program promoted by the United Nations Development Program to support women and children in Asia through acts of kindness Contribute through business to resolve international social issues (e.g., the improvement of women’s status in society and th
Slide 44: 5. Shareholder Return Policy
5. Shareholder Return Policy Copyright (c) 2012 Unicharm Corporation. All rights reserved.
Slide 45: Changes in Dividends
Planned dividend for FY2013 is ¥34, a ¥2.0 increase from FY2012, achieving the 11th consecutive year of dividend raise Changes in Dividends （Yen） 40 35 34 32 30 28 25 23 20 18 15 15 15 10 11 10 8 8 9 6 7 5 0 '0 0 / 3 '0 1 / 3 '0 2 / 3 '0 3 / 3 '0 4 / 3 '0 5 / 3 '0 6 / 3 '0 7 / 3 '0 8 / 3 '0 9 / 3
Slide 46: Outlook for Returns to Shareholders
Maintaining total shareholder returns of 50% through result-driven dividends and the share repurchase program Outlook for Returns to Shareholders (Millions of yen) Dividends Share repurchase Payout ratio 1 8 ,0 0 0 7 0 .0 % 64.2% 1 6 ,0 0 0 59.9% 6 0 .0 % 58.7% 1 4 ,0 0 0 55.6% 56.0% 49.5% 5 0 .0
Slide 47: Unicharm Ideals
Unicharm Ideals We contribute to creating a better quality of life for everyone by offering only the finest products and services to the market and customers, both at home and abroad. We strive to pursue proper corporate management principles which combine corporate growth, associated well-being and
Slide 48: Copyright (c) 2012 Unicharm Corporation. All rights reserved.
Copyright (c) 2012 Unicharm Corporation. All rights reserved. 48