Pola Orbis Holdings Inc. · TSE:4927
Pola Orbis — H1 FY2018 Earnings Presentation
29 slides from Pola Orbis's earnings presentation, 2018
Slide 1: First Half of Fiscal 2018 Supplementary Material
First Half of Fiscal 2018 Supplementary Material POLA ORBIS HOLDINGS INC. Representative Director and President Satoshi Suzuki This report contains projections of performance and other projections based on information currently available and certain assumptions judged to be reasonable. Actual perfor
Slide 2: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2018 4. Initiatives Going Forward 5. Topics & Appendices 1
Slide 3: Q2 Key Topics
Q2 Key Topics Cosmetics Market The Japanese cosmetics market overall showed steady growth and export value of cosmetics has increased. However, the pure domestic market alone, excluding inbound demand seemed to decline slightly. As for the inbound market in Japan, the market size continued to
Slide 4: Actual vs Planned Variance Analysis
Actual vs Planned Variance Analysis FY2017 FY2018 YoY Change vs. Plan (May 1, 2018) (mil. yen) H1 Results H1 Results Amount % Amount % Consol. net sales 117,378 125,262 7,884 6.7% 4,262 3.5% Operating income 20,944 23,103 2,158 10.3% 3,503 17.9% Ordinary income 20,944 22,723 1,779 8.5% 3,123 15.9% P
Slide 5: Analysis of Consolidated P&L Changes: Net Sales to Operating Income
Analysis of Consolidated P&L Changes Net Sales to Operating Income FY2017 FY2018 YoY Change (mil. yen) H1 Results H1 Results Amount % Consolidated net sales 117,378 125,262 7,884 6.7% Cost of sales 18,925 19,847 921 4.9% Gross profit 98,452 105,415 6,962 7.1% SG&A* expenses 77,507 82,311 4,804 6.2%
Slide 6: 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 FY2017 FY2018 YoY Change (mil. yen) H1 Results H1 Results Amount % Operating income 20,944 23,103 2,158 10.3% Non-operating income 228 265 37 16.2% Non-operating expenses 229 645 416 181.4% Ordinary inco
Slide 7: Factors Impacting Profit Attributable to Owners of Parent
Factors Impacting Profit Attributable to Owners of Parent Profit attributable to owners of parent was up 9.8% yoy due to an increase in the gross profit and improvements in the profit structure Increase in sales of Positive impact Negative impact (mil. yen) the POLA brand 22,000 349 20,000 516 2,370
Slide 8: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2018 4. Initiatives Going Forward 5. Topics & Appendices 7
Slide 9: Segment Results
Segment Results FY2017 FY2018 YoY Change (mil yen) H1 Results H1 Results Amount % Consolidated net sales 117,378 125,262 7,884 6.7% Beauty care 109,303 116,973 7,670 7.0% Real estate 1,348 1,354 5 0.4% Others 6,726 6,934 208 3.1% Operating income 20,944 23,103 2,158 10.3% Beauty care 20,095 22,253 2
Slide 10: Beauty Care Business Results by Brands
Beauty Care Business Results by Brands FY2017 FY2018 YoY Change (mil. yen) H1 Results H1 Results Amount % Beauty care net sales 109,303 116,973 7,670 7.0% POLA 69,538 76,559 7,021 10.1% ORBIS 26,681 26,032 (649) (2.4%) Jurlique 5,084 4,993 (90) (1.8%) H2O PLUS 1,119 960 (158) (14.2%) Brands under de
Slide 11: Brand Analysis (1)
Brand Analysis (1) H1 Results Topics The number of existing customer increased. Won #1 best cosmetics awards Overseas sales grew especially in Chinese, Hong Kong, from major beauty magazines and duty-free markets. (by 2.3 times) for January – June period. Wrinkle Shot sales was ¥4.9 bil. As
Slide 12: Brand Analysis (2)
Brand Analysis (2) H1 Results Topics Focused on customer acquisition through “ORBIS=U” Introduced new ORBIS with a view to improving quality of the customer base. shopping app – customers ORBIS=U series accounted for about 20% of total sales. can check delivery status Narrowed down the custo
Slide 13: Brand Analysis (3)
Brand Analysis (3) H1 Results Topics Sales declined slightly by 0.8% yoy (on an AUD basis). Launch four products from Performance fell short of initial plan mainly due to sales new cleansing series drop in China and Australia. Launch new products regularly in the second half. H1 Results (mil
Slide 14: Brand Analysis (4)
Brand Analysis (4) H1 Results Topics Sales were down year on year in North America. Developed product strategies Impact of reduction in sales channel is expected to with the support of group continue for the full year. companies. Implemented marketing strategies focused on OASIS Hydrating Trea
Slide 15: Brand Analysis (5) Brands Under Development
Brand Analysis (5) Brands Under Development H1 Results Topics At THREE, products for holistic care approach were Won #1 best cosmetics awards strong. Sales grew in Korea and Thailand. from major beauty magazines Costs for launching new brands amounted to for January – June period. approximatel
Slide 16: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2018 4. Initiatives Going Forward 5. Topics & Appendices 15
Slide 17: Forecasts for FY2018 (No Change)
Forecasts for FY2018 (No Change) Although overall performance has exceeded plan, forecast revision is to be considered in the 3rd quarter after evaluating performance of overseas brands and additional investment plan in the second half FY2018 YoY Change FY2018 YoY Change (mil. yen) H1 Results Amount
Slide 18: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2018 4. Initiatives Going Forward 5. Topics & Appendices 17
Slide 19: Initiatives for 2018 Q3 onward
Initiatives for 2018 Q3 onward ■ Sustain stable growth of flagship brands to lead Group earnings Launch new products from aging care series to approach new customers Open new stores to accelerate overseas expansion (Two counter openings at Korean duty-free store in July, etc.) Introduce re-pro
Slide 20: ORBIS to Revamp Brand Strategy
ORBIS to Revamp Brand Strategy Introduce a new brand strategy with a major renewal of ORBIS U series Aging care approach applied with moisturizing mechanism that utilizes Group’s research findings (Powerful approach to weakening skin resilience and dullness that become severe with aging) Clarify c
Slide 21: ACRO to launch new brands in addition to THREE
ACRO to launch new brands in addition to THREE Department store and e-commerce sales start from September in Japan (Overseas expansion planned from 2019 onwards) “Dignified and sophisticated “Authentic beauty to live ‘ITO-RIM*’” “Creating new culture” womanhood” High prestige quality makeup Premium
Slide 22: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2018 4. Initiatives Going Forward 5. Topics & Appendices 21
Slide 23: Topic (1) Strengthening Investments for Long-term Development
Topic (1) Strengthening Investments for Long-term Development Pursuing scientific exploration and cultivating of new research areas with the aim of creating new value that goes beyond the existing borders of cosmetics ＊ ■ FRC joins the MIT Media Lab Consortium FRC joins the Massachusetts Institute o
Slide 24: Topic (2) Initiatives for sustainable society and corporate growth
Topic (2) Initiatives for sustainable society and corporate growth As a part of sustainability activities, the Group put efforts on human resource managements ■ POHD recognized as the 2018 Certified Health and Productivity Management Organization Recognition Program “WHITE 500” POLA ORBIS HOLDINGS h
Slide 25: (Appendix) About POLA ORBIS Group
(Appendix) About POLA ORBIS Group Beauty care is the core business of the Group, and 6 different cosmetics brands are operated under the Group umbrella FY2017 Consol. Net Sales ¥244.3 bil. Overseas Flagship Brands under Brands Brands development * ¥20,000 High Prestige Price Range ¥10,000 Prestige ¥
Slide 26: (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 Beauty Directors: Approx. POLA THE BEAUTY (PB), Leading-edge technology in 63% anti-aging and skin-whitening ¥10,000 Esthe-inn and conven
Slide 27: (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 28: (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
Slide 29: (Appendix) Beauty Care Business Results for FY2015 – FY2017 by Brands
(Appendix) Beauty Care Business Results for FY2015 – FY2017 by Brands FY2015 FY2016 FY2017 2016 vs 2017 YoY Change (mil. yen) Results Results Results Amount % Consolidated net sales 214,788 218,482 244,335 25,853 11.8% Beauty care net sales 200,570 202,446 227,133 24,686 12.2% POLA 109,352 116,126 1
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