Pola Orbis Holdings Inc. · TSE:4927
Pola Orbis — Q1 2017 Earnings Presentation
24 slides from Pola Orbis's earnings presentation, 2017
Slide 1: First Quarter of Fiscal 2017 Supplementary Material
First Quarter of Fiscal 2017 Supplementary Material POLA ORBIS HOLDINGS INC. Director and Vice President Management Planning, IT and Global Business Naoki Kume This report contains projections of performance and other projections based on information currently available and certain assumptions judge
Slide 2: Highlights of Consolidated Performance
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2017 4. Initiatives Going Forward & Appendices 1
Slide 3: Q1 Key Topics
Q1 Key Topics Cosmetic Market Japanese cosmetic market overall showed steady growth. However, pure domestic market excluding inbound seemed to be flat or declined slightly.* Department stores and online channels remained strong. Chinese cosmetic market sustained growth mainly at skincare categ
Slide 4: Analysis of Consolidated P&L Changes: Net Sales to Operating Income
Analysis of Consolidated P&L Changes Net Sales to Operating Income FY2016 FY2017 YoY Change (mil. yen) Q1 Results Q1 Results Amount % Consolidated net sales 49,516 56,074 6,557 13.2% Cost of sales 9,443 9,320 (123) (1.3%) Gross profit 40,073 46,753 6,680 16.7% SG&A* expenses 36,400 37,626 1,226 3.4%
Slide 5: Analysis of Consolidated P&L Changes: Operating Income to Profit
Analysis of Consolidated P&L Changes Operating Income to Profit Attributable to Owners of Parent FY2016 FY2017 YoY (mil. yen) Q1 Results Q1 Results Amount % Operating income 3,673 9,127 5,454 148.5% Non-operating income 111 107 (3) (3.1%) Non-operating expenses 402 279 (122) (30.5%) Ordinary income
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 59.8% yoy driven by increase in gross margin and profit structure Positive impact Negative impact (mil. yen) 12,000 Increase in sales at Difference due to extraordinary POLA brand 21 income recor
Slide 7: Segment Analysis
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2017 4. Initiatives Going Forward & Appendices 6
Slide 8: Segment Results
Segment Results FY2016 FY2017 YoY (mil yen) Q1 Results Q1 Results Amount % Consolidated net sales 49,516 56,074 6,557 13.2% Beauty care 46,154 52,345 6,190 13.4% Real estate 757 675 (81) (10.8%) Others 2,605 3,053 448 17.2% Operating income 3,673 9,127 5,454 148.5% Beauty care 3,820 8,790 4,970 130.
Slide 9: Beauty Care Business Results by Brands
Beauty Care Business Results by Brands FY2016 FY2017 YoY (mil. yen) Q1 Results Q1 Results Amount % Beauty care net sales 46,154 52,345 6,190 13.4% POLA 25,134 33,126 7,992 31.8% ORBIS 13,572 12,760 (812) (6.0%) Jurlique 3,369 2,603 (766) (22.7%) H2O PLUS 510 635 125 24.6% Brands under development 3,
Slide 10: Brand Analysis (1)
Brand Analysis (1) Q1 Result Topics POLA outperformed initial expectation. “Wrinkle Shot Serum”, launched Both the number of customers and average purchase on January 1st, has sold beyond price grew significantly driven by Wrinkle Shot Serum. initial plan. Inbound ratio is around 12%. (See n
Slide 11: Sales Progress of POLA Wrinkle Shot Serum
Sales Progress of POLA Wrinkle Shot Serum Three months has passed since its launch in January – Sales is beyond expectation. POLA revises the annual sales target upward from ¥10.0 billion to ¥12.5 billion. During January – March, Wrinkle Shot Serum sold approximately 420K units, booked ¥6.0 billion
Slide 12: Brand Analysis (2)
Brand Analysis (2) Q1 Result Topics New products were not strong enough to arouse Revamped the main series interest of new and existing customers. “AQUA FORCE”. Weak customer expansion resulted in sales decrease. Won “Amazon Marketplace Operating income decreased slightly with efforts in Awa
Slide 13: Brand Analysis (3)
Brand Analysis (3) Q1 Result Topics Sales dropped by 25.4% YoY (in AUD basis) In China, sales dropped due to business Hong Kong still suffers from the effect of model change last year. Sales on retail basis decrease of the number of tourists. was flat yoy. Operating income recovered due to b
Slide 14: Brand Analysis (4)
Brand Analysis (4) Q1 Result Topics Revamped products sold better than expected at New products launched retail stores and shipment sales exceeded budget 1Q are well received in North America. from market. Operating loss recovered due to increase in gross (AQUA DEFENSE Series) margin and decre
Slide 15: Brand Analysis (5) Brands Under Development
Brand Analysis (5) Brands Under Development Q1 Result Topics Sales of the brand category overall decreased yoy due (Left) March 3rd to sales of FL and pdc brands last year. Like-for-like THREE Limited Kit sales grew by 12% taking account of the yoy impact. (Right) March 1st Makeup products a
Slide 16: Forecasts for Fiscal 2017
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2017 4. Initiatives Going Forward & Appendices 15
Slide 17: Forecasts for FY2017 (Revised)
Forecasts for FY2017 (Revised) Both H1 and full-year forecasts are revised upwardly reflecting strong performance of POLA FY2017 vs. Initial YoY Change FY2017 vs. Initial YoY Change (mil. yen) H1 Forecast Amount % Full-year Forecast Amount % Consol. net sales 115,000 4,500 8,042 7.5% 233,000 6,000 1
Slide 18: Initiatives Going Forward & Appendices
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2017 4. Initiatives Going Forward & Appendices 17
Slide 19: Initiatives for 2017 Q2 Onward
Initiatives for 2017 Q2 Onward Sustain stable growth of flagship brands to lead Group earnings Promote Wrinkle Shot Serum focusing on customer acquisition and repeat purchases. Additional PR and advertisements are scheduled. Launch seasonal products including whitening items. - Revamp WHITISSIMO
Slide 20: Appendix: About POLA ORBIS Group
Appendix : About POLA ORBIS Group Beauty care is the core business of the Group, and 7 different cosmetic brands are operated under the Group umbrella FY2016 Consol. Net Sales ¥218.4 bil. Overseas Flagship Brands under Brands Brands development ¥20,000 High Prestige Price Range ¥10,000 Prestige ¥5,0
Slide 21: Appendix: Beauty Care Business Brand Portfolio
Appendix : Beauty Care Business Brand Portfolio Sales Brand Concept and products Price Sales channel ratio* Consignment sales through High-prestige skincare Approx. Beauty Directors： 57% Leading-edge technology in ¥10,000 POLA THE BEAUTY (PB), anti-aging and skin-whitening Esthe-inn and conven
Slide 22: Appendix: Beauty Care Business Results for FY2014–FY2016 by Brands
Appendix : Beauty Care Business Results for FY2014 – FY2016 by Brands FY2014 FY2015 FY2016 2015 vs 2016 YoY Change (mil. yen) Results Results Results Amount % Consolidated net sales 198,094 214,788 218,482 3,693 1.7% Beauty care net sales 184,475 200,570 202,446 1,875 0.9% POLA 99,571 109,352 116,12
Slide 23: Appendix: Long-term Vision
Appendix : Long-term Vision STAGE3 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% or higher STAGE1 earnings structure and •Operating margin: 13-15
Slide 24: Appendix: 2017–2020 Medium-term Management Plan
Appendix : 2017 – 2020 Medium-term Management Plan The final stage of the long-term vision for 2020. Aim to improve profitability in Japan, promote a solid shift toward overall profitability from overseas operations and build a brand structure for next-generation growth. Consolidated net sales Capit