Unicharm Corporation · TSE:8113
Unicharm — H1 2015 Earnings Presentation
42 slides from Unicharm's earnings presentation, Aug 7, 2015
Slide 1: Unicharm Presentation Materials for Investor Meeting, First Half FY2015
First Half of the Fiscal Year Ending December 31, 2015 Unicharm Presentation Materials for Investor Meeting August 7, 2015 Takahisa Takahara President and CEO Unicharm Corporation Projections stated herein include those based on the Company’s assumptions, forecasts and plans as of August 7, 2015. Th
Slide 2: Summary of Earnings Results
Summary of Earnings Results Effective 16.3% increase in sales and 4.7% gain in operating income in first half of the fiscal year ending December 31, 2015 Sales slightly exceeded the disclosed forecast, while income came in slightly below forecast In the second half, we expect sales and income to b
Slide 3: Financial Performance Summary: 1H of the Fiscal Year Ending December 31, 2015
Financial Performance Summary: 1H of the Fiscal Year Ending December 31, 2015
Slide 4: Fiscal period basis for 1H comparison (irregular settlement)
1H of the FY ended Dec 31, 2014 (Previous term) is an irregular settlement of accounts ①1H of the FY Ending Dec 31, 2015. (Afterward: “Financial report basis”) 1H of FY2014 ･･･ ◆Companies with FY Ending March: Apr-Sep 2014 ◆Companies with FY Ending Dec: Jan-Sep 2014 2015 2014 Jan-Mar Apr-Jun Jul-Sep
Slide 5: Consolidated Year-on-Year Comparison (Financial report basis)
【Consolidated】 Year-on-Year Comparison (Financial report basis) (Millions of yen) (Reference) 1H of FY 1H of FY Difference 1H of FY Ending Achievement Ending Dec Ended Dec Difference※ (%)※ Dec 31, 2015 rate 31, 2015 31, 2014 (Published value) Net sales 358,809 356,826 ー ー 350,000 102.5% Operating in
Slide 6: Segment Information (Financial report basis)
Segment Information (Financial report basis) Geographical Segment Information (Financial report basis) (Millions of yen) Elimination/ Japan Asia Others Total Companywide Consolidated 1H of FY Ended Dec 31, 2014 Net sales 123,617 179,102 54,106 356,826 － 356,826 Operating income 15,827 19,742 1,213
Slide 7: Overseas sales composition reached 63.3%, a record high
Overseas sales composition reached 63.3%, a record high (previous fiscal year was an irregular accounting period). Changes in Japan and Overseas Net Sales (Financial report basis) (Billions of yen) 400 65.6% 70% 63.3% 350 58.5% 60% 51.7% 50.3% 300 48.0% 50% 42.0% 44.1% 43.1% 250 38.3% 37.2% 34.0%
Slide 8: Aggressive up-front marketing investments were made in Asia
Aggressive up-front marketing investments were made in Asia Consolidated operating income margin was 9.7% Actual Operating Income Margin by Geographical Segment (Financial report basis) 20.0% Japan Asia Middle East/Europe/USA Consolidated 15.3% 15.2% 13.9% 14.0% 13.9% 15.0% 13.8% 13.0% 12.8% 12.4%
Slide 9: Aggressive marketing investments were made to expand the market
Aggressive marketing investments were made to expand the market Approximately 16% growth in net sales; operating income grew about 5% due to up-front investments Year-on-Year Comparison (Adjusted basis※ Jan-Jun 2015 vs Jan-Jun 2014) (Millions of yen) 1H of FY Ending 1H of FY Ended Difference Dec 3
Slide 10: Steady growth in Japan even excluding inbound
Steady growth in Japan even excluding inbound Up-front investments made to expand markets in Asia Geographical Segment Information (Adjusted basis Jan-Jun 2015 vs Jan-Jun 2014) (Millions of yen) Elimination/ Japan Asia Others Total Consolidated Companywide 1H of FY Ended Dec 31, 2014 Net sales 123
Slide 11: Proactive expansion of high value-added products in pet care
Proactive expansion of high value-added products in Japan in the pet care business to expand industry’s total assets and improve revenue in pet business in North America Business Segment Information (Adjusted basis Jan-Jun 2015 vs Jan-Jun 2014) (Millions of yen) Personal Elimination/ Pet Care Othe
Slide 12: Impact of exchange rate fluctuations on sales and income
Impact of exchange rate fluctuations on sales and income (adjusted basis) Impact boosted net sales by about ¥23.5 billion and operating income by ±0 compared to previous year Exchange rate for 1H of Exchange rate for 1H of Currency FY Ending Dec 31, 2015 FY Ended Dec 31, 2014 Change in rate Taiwan (
Slide 13: Financial Results Forecasts for Fiscal Year Ending December 31, 2015
Financial Results Forecasts for Fiscal Year Ending December 31, 2015
Slide 14: Double-digit gains in sales and income in fiscal year ending Dec 2015
Double-digit gains in sales and income in fiscal year ending Dec 31, 2015 Take up challenge of setting new effective record (Millions of yen) Reference FY Ending Dec 1H of FY Over FY 31, 2015 Ending Dec 31, Achievement 1H of FY Ending Ending Dec. (Published 2015 Rate (%) Dec 31, 2015 31, 2015 value)
Slide 15: Impact of 1% depreciation of yen against local currency
Impact of 1% depreciation of yen against the local currency boosts sales by about ¥5.0 billion and operating income by about ¥500 million Impact of a 1% change (depreciation of yen) Assumed rate for FY (Millions of yen) Currency Ending Dec 31, 2015 Net sales Operating income Consolidated Total 5,000
Slide 16: Growth Strategy
Growth Strategy (Information and data noted here is from Unicharm)
Slide 17: No.1 position in Asia
To 10% of Global Market Share Accelerate growth utilizing strength of No.1 position in Asia As of June 2015 World No.3 9.5% Asia No.1 25.7% Baby care Feminine care Health care No.3 No.4 No.3 World 9.4% 9.2% 10.7% No.1 No.1 No.1 Asia 25.7% 22.1% 35.2% 17 Copyright (c) Unicharm Corporation. All rights
Slide 18: Japan's Best Global Brands 2015
Unicharm ranked 23rd in Japan’s Best Global Brands 2015 Source: Interbrand Unicharm set a record high for net sales Such products match consumers’ emphasis for the twelfth straight year and for on high quality, which has resulted from operating income for the seventh straight higher income levels in
Slide 19: Low usage rates of diapers and sanitary products in Asia
In Asia, usage rates for disposable diapers and sanitary products are low, and we aim to popularize these products while expanding our area of operation 2015 出生数 of births 2015 Number 2015 Population 2015 生理人口数 of menstruating females 紙おむつ使用率(日本=100%) Usage ratio of disposable diapers 生理用品 Usage rat
Slide 20: Asian populations aging faster than Japan
In Asia, populations are aging at a faster pace than in Japan We will endeavor to spread the care model established in Japan Number of elderly persons (aged 65 years and over) 2015→2030 (Thousand) 1.8X 2015 2020 2030 200,000 2015→2030 1.7X 100,000 2015→2030 2015→2030 1.1X 2015→2030 2.0X 2015→2030 1.
Slide 21: GDP per capita expected to increase as economies grow
GDP per capita is expected to increase as economies grow Management resources will be aggressively invested in advance Comparison of GDP per capita in Asian countries and GDP fluctuations in Japan Market (Reference) expansion USD Japan (2014) = 36,194 USD line 14,000 13,000 From 12,000 Brazil 13,000
Slide 22: Sales Composition
Capture growth markets by developing new markets in emerging economies and rapidly expanding product promotion Sales Composition 2005 (Actual) 2014 (Actual) 2020 (Estimate) (Adjusted to 12-month basis) Overseas Japan Japan Approx. 22% Overseas 39% 30% Overseas ratio Japan Overseas 61% 78% Approx.
Slide 23: Highest D & E Ratio in the sanitary goods industry
Unicharm has the highest D & E Ratio in the sanitary goods industry D & E Ratio / Growth Change 2011 2014 value 54% 57% +3 P 50% 56% +6 P Sanitary goods industry Industry Growth No. 1 No. 1 38% 46% +9 P 37% 38% ±0 P 28% 30% +2 P 11% 17% +6 P 23 Copyright (c) Unicharm Corporation. All rights rese
Slide 24: Japan: premium brands and inbound demand
Stable supply to meet inbound demand Promote premium brands in Japan to achieve Japan 10% growth (excluding inbound) Change in breakdown of Promote that the brand won baby care (BC) sales Best Mother Award in Japan Ongoing expansion expected Improve brand recognition Strengthen supply to meet
Slide 25: Japan: dominant No. 1 share through value proposals
Dominant No. 1 share through ongoing value proposals We expect continuous growth in new market Japan creation due to aging population. Track record in new market creation from long-term store share trends No. 1 53.8% 45 Rehabilitation Rehabilitation Fresh Comfortable Slim Easy Wear Pants pants Liner
Slide 26: China: baby care and EC sales growth
Strong EC sales with 10% growth, primarily for imported goods and pants-type products Actual growth of about 20% due to response to China inbound demand Actual growth in sales in baby care (BC) (Local currency base) Inbound China BC Strengthen EC channels Demand-side Net sales Reinforce import s
Slide 27: China feminine care: shift to premium products
Promote shift to premium products and sustain high growth Expand market share by proposing new value and China target No.1 spot Feminine care (FC) (Local currency base) Ongoing double-digit growth in both sales and income 売上高 Net sales 営業利益 Operating income 1.6X Product development and 1.5X prop
Slide 28: Indonesia: maintain dominant No.1 market share
Maintain dominant No.1 market share, fill vacuum in regional cities and Indonesia aim for further growth Baby care (BC) share Share in Jakarta No.1 No. 1 64.4% 100 No.1 76.9 76% % 80 60 40 20 2013/5 2014/5 2015/5 60 Share in regional cities 50 40 30 No. 1 51.5 % 60 20 Competitor A 18.0% 10 Competito
Slide 29: Thailand: baby care and feminine care share
Develop BC products meeting needs and maintain dominant No.1 spot Promote shift to high-value-added FC products Thailand and aim for higher share Baby care share (BC) Feminine care share (FC) No. 1 60.5% No. 1 49.1% 60 40 Competitor A 38.9% 40 Competitor A 28.9% 20 20 Competitor B 9.5% Competitor B
Slide 30: India: achieved 30% share in seven years
Achieved 30% just seven years after market entry by promoting pants-type baby diapers India Expected to make contribution to revenue from 2016 Baby care (BC) share ■売上高 Net sales 営業利益 Operating income (Local currency base) No. 2 30.1% 2016: Plan to record profits Major expansion into 2020 Impr
Slide 31: India: expansion in cities and supply capacity
Aim for speedy expansion in area while strengthening supply capacity India as demand is actualized Operations began at Significant expansion in Plant No.2 number of cities entered Sharp increase in supply capacity and distribution efficiency 4,000 Plan to build additional third factory and a
Slide 32: Vietnam: new value proposals for BC, FC and HC
New value proposals made on an ongoing basis for BC, FC and HC Vietnam Win No. 1 market share in major cities Baby care (BC) share Feminine care (FC) share Health care (HC) share No. 1 43.0% No. 1 45.8% No. 1 66.4% Data : Hanoi, Hai Phong, Danang, Nhatrang, Data : Hanoi, Hai Phong, Danang, Nhatrang,
Slide 33: Myanmar: steady growth after acquisition
Steady and accelerated growth after acquisition Build up overwhelming dominance for both Myanmar BC and FC Net sales Baby care (BC) share (Local currency base) No. 1 76 % 50% Competitor A 1.4X 0% 4% Competitor B 2% 2013 2014 2015 1.0X Feminine care (FC) share No. 1 54 % 50% Competitor A 7% 2014 1H
Slide 34: Pet care: Japan and North America
Maintain No.1 share in Japan by continuously creating new markets Steady progress for priority products in North America Overall share of Japanese pet care (PC) Food products Launch of first pet food in the world to be warmed on a cooking range No. 1 21.4 % Create new markets Accelerate shif
Slide 35: Saudi Arabia: augment capital and aim for higher profitability
Augment capital and speeding up decision- making in growing markets Saudi Arabia Aim for further increase in profitability 2005/12 2009/3 UC’s equity stake Cumulative investment Background SAR 161 million Acquisition Capital 51% increase (4,929 million yen) Net income Net assets Net sales Operating
Slide 36: MENA region is home to fast-growing cities
The MENA (Middle East and North Africa) region is home to cities with the world’s highest populations Saudi Arabia growth rates, exceeding those in Asian cities. Population grew by 46% in the 15 years since 2000, far surpassing the EU (4.9%), ASEAN (23.9%), India (24.2%) and China (8.5%). The wo
Slide 37: Vacuum in MENA region presents Saudi Arabia potential
Vacuum in MENA region presents Saudi Arabia promising potential Population by region and country in MENA/Main supplying countries from overseas subsidiaries in MENA region (Saudi Arabia, Egypt) 0 10 20 30 40 50 60 70 80 90 100 Gulf countries サウジアラビア Saudi Arabia 30.63 (Million people) UAE UAE 9.3
Slide 38: Start of operations in Brazil and South Africa
Start of operations in Brazil and South Africa; Full-scale entry into Latin America and Sub-Saharan Africa region Brazil South Africa Start of sales in May 2014 Start of sales in March 2015 Share of pants-type baby diaper market in Sao Paulo Shipments increasing, primarily to local jumpe
Slide 39: Full-scale foray into South America and Africa
Full-scale start of foray into South America and Africa Continue breaking into new countries and creating new markets, while picking up pace of growth Countries neighboring Middle East, North Africa and India Progress in dominating neighboring regions with focus on Saudi Arabia and Egypt Europe an
Slide 40: Shareholder Return Policy
© unicharm Shareholder Return Policy
Slide 41: Steady and continual dividend payments
Steady and continual dividend payments On track for 14 consecutive periods of increased dividends! Change in dividends (yen) 16.0 14.8 14.0 ※ 12.7 12.73 12.0 11.3 10.7 10.0 9.3 7.7 8.0 6.0 6.0 4.9 5.1 4.0 3.3 3.7 3.0 2.3 2.7 2.0 0.0 '02/3 '03/3 '04/3 '05/3 '06/3 '07/3 '08/3 '09/3 '10/3 '11/3 '12/3
Slide 42: Thank you very much.
Thank you very much. Unicharm constantly provides the world’s No. 1 and unprecedented products and services to everybody around the globe, and delivers comfort, impression and satisfaction. 42 Copyright (c) Unicharm Corporation. All rights reserved.