Pola Orbis Holdings Inc. · TSE:4927
Pola Orbis — Q3 2016 Earnings Presentation
24 slides from Pola Orbis's earnings presentation, 2016
Slide 1: Third Quarter of Fiscal 2016 Supplementary Material
Third Quarter of Fiscal 2016 Supplementary Material POLA ORBIS HOLDINGS INC. Director and Vice President Management Planning, Accounting and Global Business Division Naoki Kume This report contains projections of performance and other projections based on information currently available and certain
Slide 2: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts and Initiatives for Fiscal 2016 4. Topics and Appendix 1
Slide 3: Q3 Key Topics
Q3 Key Topics Cosmetic Market Japanese cosmetic market seemed to progress steadily in spite of the decline in inbound growth and pure domestic demand seemed to be flat compared to last year.* Overall Chinese market continued to show the trend that consumption moves from urban department stores t
Slide 4: Analysis of Consolidated P&L Changes: Net Sales to Operating Income
Analysis of Consolidated P&L Changes Net Sales to Operating Income FY2015 FY2016 YoY (mil. yen) Q3 Results (YTD) Q3 Results (YTD) Amount % Consolidated net sales 152,503 159,150 6,647 4.4% Cost of sales 29,081 29,890 809 2.8% Gross profit 123,421 129,260 5,838 4.7% SG&A* expenses 108,174 110,949 2,7
Slide 5: Analysis of Consolidated P&L Changes: Operating Income to Profit Attributable to Owners of Parent
Analysis of Consolidated P&L Changes Operating Income to Profit Attributable to Owners of Parent FY2015 FY2016 YoY (mil. yen) Q3 Results (YTD) Q3 Results (YTD) Amount % Operating income 15,247 18,310 3,062 20.1% Non-operating income 457 342 (114) (25.1%) Non-operating expenses 301 1,202 901 299.2% O
Slide 6: Factors Impacting Profit Attributable to Owners of Parent
Factors Impacting Profit Attributable to Owners of Parent Profit attributable to owners of parent was up 32.8% yoy. Increases in gross profit and extraordinary income offset non-operating expense from unfavorable currency exchange and increased income tax expenses. （－） Increase of commissions due to
Slide 7: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts and Initiatives for Fiscal 2016 4. Topics and Appendix 6
Slide 8: Segment Results
Segment Results FY2015 FY2016 YoY (mil yen) Q3 Results (YTD) Q3 Results (YTD) Amount % Consolidated net sales 152,503 159,150 6,647 4.4% Beauty care 142,005 147,308 5,302 3.7% Real estate 2,198 2,285 87 4.0% Others 8,299 9,556 1,257 15.2% Operating income 15,247 18,310 3,062 20.1% Beauty care 14,128
Slide 9: Beauty Care Business Results by Brands
Beauty Care Business Results by Brands FY2015 FY2016 YoY (mil. yen) Q3 Results (YTD) Q3 Results (YTD) Amount % Beauty care net sales 142,005 147,308 5,302 3.7% POLA 76,382 83,543 7,161 9.4% ORBIS 41,702 41,982 279 0.7% Jurlique 12,196 8,800 (3,395) (27.8%) H2O PLUS 2,914 1,891 (1,022) (35.1%) Brands
Slide 10: Brand Analysis (1)
Brand Analysis (1) Q3 Result Topics Inbound sales ratio is approximately 12%. Launched a facial cream from the Aging-care and whitening products continued to popular “Whiteshot” series (July 1st). be strong. Sold 63,000 items in the first PB (1) channel sustained a high level of growth. month
Slide 11: Brand Analysis (2)
Brand Analysis (2) Q3 Result Topics Sales increased due to increase of the number of Introduced items with seasonal customers. appeal such as color makeup Operating income decreased due to increased point for autumn. expenses pushed by promotions and purchase price per customer lower than expe
Slide 12: Brand Analysis (3)
Brand Analysis (3) Q3 Result Topics Sales decreased by 17% (AUD basis). Launched Jurlique Hydrating Sales in China remained at same level as last year Water Essence (August 25th). in retail basis. Hong Kong and DFS both continued to struggle. Operating income dropped yoy because of the dec
Slide 13: Brand Analysis (4)
Brand Analysis (4) Q3 Result Topics In North America, revamped products became available Withdrawal from China will be completed by the end at stores from September (mainly at ULTA Beauty). of 2016. Operating loss recovered on a quarterly basis. Q3 (YTD) Results (mil. yen) YoY change(1) Quarte
Slide 14: Brand Analysis (5) Brands Under Development
Brand Analysis (5) Brands Under Development Q3 Result Topics At THREE, new stores and existing stores both performed THREE: very well and sales were approximately up 50% yoy. in July, e-commerce At decencia, the number of customers has steadily started in Japan. increased and sales were approx
Slide 15: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts and Initiatives for Fiscal 2016 4. Topics and Appendix 14
Slide 16: Forecasts for FY2016 (No Change from August 1st)
Forecasts for FY2016 (No Change from August 1st) Aim to achieve increase in sales and operating income for the 7th consecutive year and achieve the Mid-term Management Plan FY2016 YoY change FY2016 YoY change (mil. yen) Full-year Plan Amount % Q3 (YTD) Amount % Consol. net sales 223,000 8,211 3.8% 1
Slide 17: Initiatives for FY2016 Q4
Initiatives for FY2016 Q4 Realizing 2014 - 2016 Medium-term Management Plan Sustain stable growth of flagship brands to lead Group earnings Launch a limited item from the flagship “B.A” series and promote a high-prestige serum. Implement strategic investments for promotion of “Wrinkle Shot Medi
Slide 18: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts and Initiatives for Fiscal 2016 4. Topics and Appendix 17
Slide 19: Transfer of Consolidated Subsidiaries
Transfer of Consolidated Subsidiaries Stock transfer of pdc and FUTURE LABO is scheduled to be completed in 2016 Q4 【Objectives】 ・ To review the brand portfolio as a part of multi-brand strategy of the Group. ・ To achieve the long-term vision, “Highly Profitable Global Company” and attain operating
Slide 20: Appendix: About POLA ORBIS Group
Appendix: About POLA ORBIS Group Beauty care is the core business of the Group, and 9 different cosmetic brands are operated under the Group umbrella. FY2015 Consol. Net Sales ¥214.8 bil. Overseas Flagship Brands under Brands Brands development High prestige ¥10,000 Prestige Beauty care business 93%
Slide 21: Beauty Care Business Brand Portfolio
Beauty Care Business Brand Portfolio Sales Brand Concept and products Price Sales channel ratio* Consignment sales through High-prestige skincare Approx. Beauty Directors： 55% Leading-edge technology in ¥10,000 POLA THE BEAUTY (PB), anti-aging and skin-whitening Esthe-inn and conventional door
Slide 22: Appendix: Beauty Care Business FY2015 Results by Brands
Appendix: Beauty Care Business FY2015 Results by Brands FY2014 FY2015 YoY Change (mil. yen) Results Results Amount % Consolidated net sales 198,094 214,788 16,693 8.4% Beauty care net sales 184,475 200,570 16,095 8.7% POLA 99,571 109,352 9,780 9.8% ORBIS 52,302 56,354 4,051 7.7% Jurlique 17,600 18,3
Slide 23: Appendix: Long-term Vision
Appendix: Long-term Vision Corporate Philosophy STAGE3 “Inspire all people and touch their hearts” 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%
Slide 24: Appendix: 2014–2016 Medium-term Management Plan
Appendix: 2014–2016 Medium-term Management Plan The 2nd stage of the long-term vision for 2020 Aim to enhance the enterprise value by further strengthening domestic earnings structure, accelerating overseas expansion, and improving capital efficiency. Consolidated net sales Capital efficiency Cons