Pola Orbis Holdings Inc. · TSE:4927
Pola Orbis — FY2023 Earnings Presentation
45 slides from Pola Orbis's earnings presentation, 2024
Slide 1: Financial Results of 2023 / 2024–2026 Medium-term Management Plan
Financial Results of 2023 2024–2026 Medium-term Management Plan POLA ORBIS HOLDINGS INC. Representative Director and President Yoshikazu Yokote • This report contains projections of performance and other projections based on information currently available and certain assumptions judged to be reason
Slide 2: Part I and Part II contents
Part I Fiscal 2023 Consolidated Performance 1. Highlights of Consolidated Performance 2. Segment Analysis Part II 2024–2026 Medium-term Management Plan 1. Review of the Previous Medium-term Management Plan and Recognition of Current Status 2. 2024–2026 Medium-term Management Plan 3. Forecasts for Fi
Slide 3: Part I Fiscal 2023 Consolidated Performance
Part I Fiscal 2023 Consolidated Performance 1. Highlights of Consolidated Performance 2. Segment Analysis 2
Slide 4: FY2023 Key Topics
FY2023 Key Topics Cosmetics Market ◼ It was recognized that the scale of the Japanese cosmetics market as a whole experienced low single-digit growth, partly due to the recovery from the COVID-19 pandemic. ◼ The cosmetics market in mainland China requires monitoring, with a sense of uncertainty conc
Slide 5: Actual vs Planned Variance Analysis
Actual vs Planned Variance Analysis FY2022 FY2023 YoY change Jul. 31, 2023 vs. Plan (mil. yen) Results Results Amount % Plan Amount % Consol. net sales 166,307 173,304 6,996 4.2% 180,000 (6,695) (3.7%) Operating income 12,581 16,080 3,499 27.8% 16,000 80 0.5% Ordinary income 14,928 18,469 3,541 23.7
Slide 6: Consolidated P&L Changes Analysis: Net Sales to Operating Income
Consolidated P&L Changes Analysis Net Sales to Operating Income FY2022 FY2023 YoY Change (mil. yen) Results Results Amount % Consolidated net sales 166,307 173,304 6,996 4.2% Cost of sales 31,037 31,227 190 0.6% Gross profit 135,270 142,076 6,806 5.0% SG&A expenses 122,688 125,996 3,307 2.7% Operati
Slide 7: Consolidated P&L Changes Analysis: Operating Income to Profit
Consolidated P&L Changes Analysis Operating Income to Profit Attributable to Owners of Parent FY2022 FY2023 YoY Change (mil. yen) Results Results Amount % Operating income 12,581 16,080 3,499 27.8% Non-operating income 2,773 2,691 (82) (3.0%) Non-operating expenses 427 302 (125) (29.3%) Ordinary inc
Slide 8: Factors Impacting Profit Attributable to Owners of Parent
Factors Impacting Profit Attributable to Owners of Parent Despite an increase in gross profit due to higher revenue, profit attributable to owners of parent declined by ¥1,781 mil. YoY due to the rebound of the reduction in income taxes, etc. in FY2022. (mil. yen) Positive impact Negative impact 20,
Slide 9: Part I Fiscal 2023 Consolidated Performance
Part I Fiscal 2023 Consolidated Performance 1. Highlights of Consolidated Performance 2. Segment Analysis 8
Slide 10: Segment Results
Segment Results FY2022 FY2023 YoY Change (mil. yen) Results Results Amount % Consolidated net sales 166,307 173,304 6,996 4.2% Beauty care 161,654 168,477 6,822 4.2% Real estate 2,083 2,078 (5) (0.2%) Others 2,569 2,748 178 7.0% Operating income 12,581 16,080 3,499 27.8% Beauty care 13,793 16,354 2,
Slide 11: Beauty Care Business Results by Brands
Beauty Care Business Results by Brands FY2022 FY2023 YoY Change (mil. yen) Results Results Amount % Beauty care net sales 161,654 168,477 6,822 4.2% POLA 96,371 98,499 2,127 2.2% ORBIS 38,417 42,874 4,457 11.6% Jurlique 8,388 9,032 644 7.7% Brands under development 16,892 17,368 475 2.8% Beauty care
Slide 12: Brand Analysis (1)
Brand Analysis (1) FY2023 Result Topics ◼ Revenue experienced double-digit growth in the department store, e- ◼ Launched POLA’s premium serum B.A commerce and amenities business, and domestic revenue increased. ◼ The decline in customer numbers for consignment sales was ameliorated, GRANDLUXE (Octob
Slide 13: Brand Analysis (2)
Brand Analysis (2) FY2023 Result Topics ◼ Stabilization of the customer base progressed in the direct selling ◼ ORBIS U. Foaming Wash received channel, with double-digit growth in the number of new customers best cosmetics award from a beauty and a YoY increase in the number of existing customers. m
Slide 14: Brand Analysis (3)
Brand Analysis (3) FY2023 Result Topics ◼ Revenue grew in all key markets of mainland China, Australia, ◼ The business focused on face oil, Jurlique’s star and Hong Kong. product. ◼ Income was significantly impacted by a decline in gross profit due to a slowdown in duty free business, and the contri
Slide 15: Brand Analysis (4) Brands Under Development
Brand Analysis (4) Brands Under Development FY2023 Result Topics ◼ Domestic revenue for THREE increased, and initial results ◼ Launched a fragrance from THREE (November). from the launch of the brand’s first fragrance were strong. Sought product differentiation through an ◼ DECENCIA focused on marke
Slide 16: Part II 2024–2026 Medium-term Management Plan
Part II 2024–2026 Medium-term Management Plan 1. Review of the Previous Medium-term Management Plan and Recognition of Current Status 2. 2024–2026 Medium-term Management Plan 3. Forecasts for Fiscal 2024 15
Slide 17: Review of the Previous Medium-term Management Plan for 2021–2023
Review of the Previous Medium-term Management Plan for 2021–2023 Management Indicators FY2023 Results Performance Trend Domestic net sales Consolidated net sales ¥173.3 bil. CAGR* 0.1% Net sales (mil. yen) Overseas net sales Operating margin 200,000 Operating margin 10.0% Overseas sales ratio 16.7%
Slide 18: Review of the Previous Medium-term Management Plan: Strategies Evaluation
Review of the Previous Medium-term Management Plan for 2021–2023 Strategies Evaluation ◼ POLA promoted Online Merges with Offline (OMO) and focused on seamless cross-channel customer acquisition and development. Evolve Fell Achievements Turned around the decline in customer numbers in the domestic b
Slide 19: Business Environment
Business Environment Domestic Cosmetics Market Percentage by Domestic Price Range Chinese Cosmetics Market Bottom to top: 1-1000 1001-3000 3001-5000 (100 mil. yen) 5001-10000 10001- (100 mil. yen) 14,000 100% 100,000 12,000 80% 80,000 10,000 60% 8,000 60,000 6,000 40% 40,000 4,000 20% 20,000 2,000 0
Slide 20: Towards Achieving VISION 2029
Towards Achieving VISION 2029 VISION 2029 A collection of unique businesses that respond to diversifying values of “beauty” 【Targets for 2029】 ◼ Consolidated operating income: ¥50.0 bil. Develop the cosmetics business globally; reform and enhance Basic strategy 1 the brand portfolio ◼ Consolidated o
Slide 21: Part II 2024–2026 Medium-term Management Plan
Part II 2024–2026 Medium-term Management Plan 1. Review of the Previous Medium-term Management Plan and Recognition of Current Status 2. 2024–2026 Medium-term Management Plan 3. Forecasts for Fiscal 2024 20
Slide 22: Basic Policy of the 2024–2026 Medium-term Management Plan
2024–2026 Medium-term Management Plan Basic Policy of the 2024–2026 Medium-term Management Plan We designated the plan as the “three years of re-challenging and establishing a foundation for growth” to achieve VISION 2029, and will further refine our brands to strengthen our income- generating power
Slide 23: Management Indicators for 2026
2024–2026 Medium-term Management Plan Management Indicators for 2026 Domestic Net Sales CAGR approx. 4% Consolidated ¥200.0 bil. Overseas Net Sales CAGR approx.12% Net Sales CAGR approx. 5% Overseas Sales Ratio 20% Consolidated Operating Income Operating margin 12-13% Capital Efficiency ROE 10% or h
Slide 24: The Group's Domestic Strategy
The Group’s Domestic Strategy 2026 Consolidated domestic sales CAGR approx. 4% Key Strategies ◼ Boost the income-generating power of existing domestic brands, achieve sustainable growth, and use the profits generated to invest in growth domains and new businesses. • Further refine the individuality
Slide 25: The Group's Domestic Strategy (1) POLA
The Group’s Domestic Strategy (1) POLA ◼ Establish brand experience (the One POLA model) to promote the transition from new customer acquisition to high LTV. ◼ Introduce a new salon model for offline sales, the pillar of relationship-building with customers. (Please see p25 for details.) One POLA va
Slide 26: POLA Offline Customer Contact Points
The Group’s Domestic Strategy (1) POLA Offline Customer Contact Points ◼ Relocate offline customer contact points and clarify the role and value provided by each customer contact point. ◼ Strengthen the rollout of salons as a destination for customer direction through OMO and focus on attracting new
Slide 27: The Group's Domestic Strategy (2) ORBIS
The Group’s Domestic Strategy (2) ORBIS ◼ Stably grow the direct selling business pivoting on skincare and build a robust income base. ◼ Enter untapped markets and expand top-line in new domains. Growth pivoting on skincare Expand in growth domains and untapped markets ◼ Sales of ORBIS U. experience
Slide 28: The Group's Domestic Strategy (3) Brands Under Development
The Group’s Domestic Strategy (3) Brands Under Development ◼ Swiftly achieving profitability in brands under development remains a challenge. ◼ THREE will be in a brand regeneration phase, DECENCIA will achieve profitable growth, and FUJIMI will achieve profitability in 2024. ◼ Regenerate the brand
Slide 29: The Group's Overseas Strategy
The Group’s Overseas Strategy 2026 Drive the Group’s growth and establish an earnings structure. Consolidated overseas sales CAGR approx. 12% Overseas sales ratio 16.7% 20% FY2023 FY2026 Key Strategy 1 Regrowth in the Chinese market ◼ We have established a company to oversee management of the Chines
Slide 30: The Group's Overseas Strategy (1) POLA
The Group’s Overseas Strategy (1) POLA ◼ Continue to position mainland China as our main key market and restructure strategies to adapt to changes in the environment. ◼ Strengthen contact points expected to expand high-prestige, loyal customer demographic and boost brand recognition. Overseas sales
Slide 31: The Group's Overseas Strategy (2) Jurlique
The Group’s Overseas Strategy (2) Jurlique ◼ Narrow down our key markets to mainland China and Australia, and reset our profitability target for 2025. ◼ Concentrate resources to expand the top line and achieve greater efficiency in SG&A expenses. Progress on achieving profitability Ameliorate losses
Slide 32: Group Business Domain Expansion Strategy
Group Business Domain Expansion Strategy ◼ The groundwork is progressing for several new businesses and we aim to expedite monetization to achieve our VISION 2029: A collection of unique businesses that respond to diversifying values of “beauty.” Aesthetic medicine Remo-Fas Well-being Fasting mamani
Slide 33: Strengthen R&D Capabilities for New Value Creation
Strengthen R&D Capabilities for New Value Creation Research and development <Cosmetics Domain> ◼ The Technical Development Center (TDC) began operation in January 2024 ✓ New facility responsible for new dosage forms research and the manufacture of high value-added products ✓ Launch differentiated pr
Slide 34: Strengthen sustainability: unique KPIs
Strengthen sustainability combining the resolution of social issues with uniqueness The unique KPIs to realize a sustainable society No changes have been made to the five categories, established based on the Group’s strengths and social responsibilities. Materiality Categories Corresponding SDGs KPI
Slide 35: Strengthen sustainability: Main Initiatives
Strengthen sustainability combining the resolution of social issues with uniqueness Main Initiatives ◼ Promote the creation of environments where employees can make the most of their abilities, regardless of gender, nationality, or age. We have established the percentage of female division managers
Slide 36: Improvement in Capital Efficiency and Shareholder Returns
Improvement in Capital Efficiency and Shareholder Returns 【Enhancing Capital Profitability】 Return on equity (ROE) has been declining due to the decrease in profit. Under the new Medium-term Management Plan, we aim to achieve ROE of at least 10% by 2026 through capital profitability enhancement foun
Slide 37: Part II 2024–2026 Medium-term Management Plan
Part II 2024–2026 Medium-term Management Plan 1. Review of the Previous Medium-term Management Plan and Recognition of Current Status 2. 2024–2026 Medium-term Management Plan 3. Forecasts for Fiscal 2024 36
Slide 38: Forecasts for Fiscal 2024
Forecasts for Fiscal 2024 FY2023 YoY Change FY2024 YoY Change (mil. yen) Full-year Results Amount % Full-year plan Amount % Consol. net sales 173,304 6,996 4.2% 179,000 5,695 3.3% Beauty care 168,477 6,822 4.2% 174,000 5,522 3.3% Real estate 2,078 (5) (0.2%) 2,250 171 8.3% Others 2,748 178 7.0% 2,75
Slide 39: Appendices
KKK POLA ORBIS Khh HOLDINGS Appendices 38
Slide 40: (Appendix) Quarterly Segment Results
(Appendix) Quarterly Segment Results ◼ Net sales FY2023 Jan.–Mar. FY2023 Apr.–Jun. FY2023 Jul.–Sep. FY2023 Oct.–Dec. YoY YoY YoY YoY (mil. yen) Results Results Results Results Change Change Change Change Consolidated net sales 42,136 11.9% 43,700 6.4% 40,902 (0.0%) 46,564 (0.2%) Beauty care 40,950 1
Slide 41: (Appendix) Quarterly Results by Brands
(Appendix) Quarterly Results by Brands ◼ Net sales FY2023 Jan.–Mar. FY2023 Apr.–Jun. FY2023 Jul.–Sep. FY2023 Oct.–Dec. YoY YoY YoY YoY (mil. yen) Results Results Results Results Change Change Change Change Beauty care net sales 40,950 12.1% 42,578 6.7% 39,731 (0.2%) 45,216 (0.5%) POLA 24,183 13.9% 2
Slide 42: (Appendix) Beauty Care Business Results for FY2021–FY2023 by Brands
(Appendix) Beauty Care Business Results for FY2021–FY2023 by Brands FY2022–FY2023 FY2021 FY2022 FY2023 YoY Change Results (mil. yen) (recalculated under the Results Results Amount % 2022 standard) Consolidated net sales 174,896 166,307 173,304 6,996 4.2% Beauty care net sales 170,403 161,654 168,477
Slide 43: (Appendix) About POLA ORBIS Group
(Appendix) About POLA ORBIS Group Beauty care is the core business of the Group, and six different cosmetics brands are operated under the Group umbrella. FY2023 Consol. Net Sales ¥173.3 bil. Overseas Flagship Brands under Brands Brands development ¥20,000 High Prestige Price Range ¥10,000 Prestige
Slide 44: (Appendix) Beauty Care Business Brand Portfolio
(Appendix) Beauty Care Business Brand Portfolio Sales ratio* Brand Concept and products Price Main sales channel ◼ High-prestige skincare Approx. ◼ JP: Consignment sales, department stores and e-commerce 59% ◼ Leading-edge technology in aging- ¥10,000 ◼ Overseas: Department stores, directly-operated
Slide 45: (Appendix) Long-term Management Plan – VISION 2029
(Appendix) Long-term Management Plan – VISION 2029 VISION 2029 A collection of unique businesses that respond to diversifying values of “beauty” Basic strategy 1 Develop the cosmetics business globally; reform and enhance the brand portfolio Basic strategy 2 Create new value and expand business doma