Pola Orbis Holdings Inc. · TSE:4927
Pola Orbis — Q3 2020 Earnings Presentation
27 slides from Pola Orbis's earnings presentation, 2020
Slide 1: Third Quarter of Fiscal 2020 Supplementary Material
Third Quarter of Fiscal 2020 Supplementary Material POLA ORBIS HOLDINGS INC. Director Finance, Legal & Administration, PR, IR and CSR Akira Fujii This report contains projections of performance and other projections based on information currently available and certain assumptions judged to be reason
Slide 2: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2020 4. Initiatives Going Forward & Appendices 1
Slide 3: Q3 Key Topics
Q3 Key Topics Cosmetics Market The overall size of the Japanese cosmetics market, including exports, fell dramatically due to the impact of COVID-19 Inbound demand, which had accounted for approximately 6% of the Company’s net sales, continued to drop significantly due to a decrease in foreign v
Slide 4: Impact of COVID-19 in Q3
Impact of COVID-19 in Q3 Business Situation in Q3 Monthly Progress Conditions remained difficult for new YoY Change in Consolidated Monthly Net Sales Consignment customer acquisition sales Utilized online counseling, maintained and strengthened relationships with customers (％) Jan. Feb. Mar. A
Slide 5: Consolidated P&L Changes Analysis: Net Sales to Operating Income
Consolidated P&L Changes Analysis Net Sales to Operating Income FY2019 FY2020 YoY Change (mil. yen) Q3 Results (YTD) Q3 Results (YTD) Amount % Consolidated net sales 165,530 125,814 (39,715) (24.0%) Cost of sales 25,686 20,504 (5,182) (20.2%) Gross profit 139,843 105,310 (34,533) (24.7%) SG&A expens
Slide 6: Consolidated P&L Changes Analysis: Operating Income to Profit Attributable to Owners of Parent
Consolidated P&L Changes Analysis Operating Income to Profit Attributable to Owners of Parent FY2019 FY2020 YoY Change (mil. yen) Q3 Results (YTD) Q3 Results (YTD) Amount % Operating income 25,411 9,222 (16,189) (63.7%) Non-operating income 304 269 (34) (11.2%) Non-operating expenses 1,345 1,716 371
Slide 7: Factors Impacting Profit Attributable to Owners of Parent
Factors Impacting Profit Attributable to Owners of Parent A decline in gross profit, resulting from decreased revenue, pushed down profit attributable to owners of parent by -90.2% YoY Positive impact Negative impact (mil. yen) 15,898 16,000 12,000 8,000 4,000 Decrease due to POLA revenue decline 1,
Slide 8: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2020 4. Initiatives Going Forward & Appendices 7
Slide 9: Segment Results
Segment Results FY2019 FY2020 YoY Change (mil yen) Q3 Results (YTD) Q3 Results (YTD) Amount % Consolidated net sales 165,530 125,814 (39,715) (24.0%) Beauty care 161,794 122,295 (39,498) (24.4%) Real estate 1,979 1,763 (216) (10.9%) Others 1,756 1,755 (0) (0.0%) Operating income 25,411 9,222 (16,189
Slide 10: Beauty Care Business Results by Brands
Beauty Care Business Results by Brands FY2019 FY2020 YoY Change (mil. yen) Q3 Results (YTD) Q3 Results (YTD) Amount % Beauty care net sales 161,794 122,295 (39,498) (24.4%) POLA 102,305 72,926 (29,378) (28.7%) ORBIS 39,125 33,298 (5,826) (14.9%) Jurlique 5,157 4,158 (999) (19.4%) H2O PLUS 1,047 500
Slide 11: Brand Analysis (1)
Brand Analysis (1) Q3 Result Revenue continued to fall in domestic storefront operations Topics Domestic e-commerce grew; new customers with a high anticipated Full renewal of the POLA top series B.A skincare purchasing rate and LTV were acquired Commenced advance sales of lotion Sales in Ch
Slide 12: Brand Analysis (2)
Brand Analysis (2) Q3 Result Topics New mail-order (online and catalog) customer acquisition Launch of the aging care series continued to progress well ORBIS U. (September) Structural improvement, with a YoY increase in the average unit price of mail-order (online and catalog) products (+6.9%
Slide 13: Brand Analysis (3) Overseas Brands
Brand Analysis (3) Overseas Brands Q3 Result Topics Shutdowns continued for some Jurlique stores in Australia Online sales in China were strong, with the utilization of live Jurlique commerce Limited launch of hand gel that maintains clean Losses in Jurlique were ameliorated through structural
Slide 14: Brand Analysis (4) Brands Under Development
Brand Analysis (4) Brands Under Development Q3 Result Topics Sales struggled, with a slow recovery in department store traffic ITRIM and the impact of continuing to refrain from providing trial use of Launch of new skincare cosmetics series Crescent (September) THREE domestic e-commerce grew (
Slide 15: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2020 4. Initiatives Going Forward & Appendices 14
Slide 16: Forecasts for Fiscal 2020 (Revised)
Forecasts for Fiscal 2020 (Revised) The impact of COVID-19 on performance has been more extensive than previously anticipated, and the full year performance forecast has been revised FY2020 YoY Change FY2020 vs April 28 YoY Change (mil. yen) Q3 Results (YTD) Amount % Full-year Plan Plan Amount % Con
Slide 17: Revisions to Forecasts for Fiscal 2020
Revisions to Forecasts for Fiscal 2020 FY2020 YoY Change FY2020 vs April 28 YoY Change (mil. yen) Q3 Results (YTD) Amount % Full-year Plan Plan Amount % Consol. net sales 125,814 (39,715) (24.0%) 175,000 (15,000) (44,920) (20.4%) OP income 9,222 (16,189) (63.7%) 10,000 (9,000) (21,137) (67.9%) Ordin
Slide 18: Revisions to the Dividends Forecast for Fiscal 2020
Revisions to the Dividends Forecast for Fiscal 2020 The dividends forecast has been revised downwards, in line with the revisions to the performance forecast Annual ¥80 Annual ¥50 Dividends (Interim ¥35, Year-end ¥45) (Interim ¥35, Year-end ¥15) (Dividends forecast as of July 30) (Dividends forecast
Slide 19: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2020 4. Initiatives Going Forward & Appendices 18
Slide 20: Initiatives for Fiscal 2020 Q4 onward
Initiatives for Fiscal 2020 Q4 onward ■ Sustain stable growth of flagship brands to lead Group earnings Strengthen the foundation of domestic businesses Commenced advance sales of lotion in the renewed B.A series, with sales performing strongly in excess of plans; expand the line with the launch
Slide 21: Initiatives for Fiscal 2020 Q4 onward
Initiatives for Fiscal 2020 Q4 onward ■ Bring overseas operations solidly into the black overall Continue to reform the cost structure, aiming for a return to profit Accelerate growth in China placed under direct ownership Strengthen online presence, expand live-streaming and maximize sales in
Slide 22: About POLA ORBIS Group
(Appendix) About POLA ORBIS Group Beauty care is the core business of the Group, and 9 different cosmetics brands are operated under the Group umbrella FY2019 Consol. Net Sales ¥219.9 bil. Overseas Flagship Brands under Brands Brands development ¥20,000 High Prestige Price Range ¥10,000 Prestige ¥5,
Slide 23: Beauty Care Business Brand Portfolio
(Appendix) Beauty Care Business Brand Portfolio Sales Brand Concept and products Price Main sales channel ratio* High-prestige skincare JP: Consignment sales through Approx. 63% Leading-edge technology ¥10,000 Beauty Directors, department store counters and e-commerce in aging-care and skin-
Slide 24: Improvement in Capital Efficiency and Shareholder Returns
(Appendix) Improvement in Capital Efficiency and Shareholder Returns Initiatives to Improve Capital Efficiency (%) ROE movement Operating income CAGR10% Achieve net income growth 16.0 14.2 EPS which is higher than operating Target for 2020 (Earnings per share) income growth by decreasing 12.0 10
Slide 25: 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% STAGE1 earnings structure and •Operating margin: 13-15% accelera
Slide 26: 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 27: Beauty Care Business Results for FY2017 – FY2019 by Brands
(Appendix) Beauty Care Business Results for FY2017 – FY2019 by Brands FY2017 FY2018 FY2019 2018 vs 2019 YoY Change (mil. yen) Results Results Results Amount % Consolidated net sales 244,335 248,574 219,920 (28,654) (11.5%) Beauty care net sales 227,133 231,207 214,886 (16,321) (7.1%) POLA 144,012 15