Pola Orbis Holdings Inc. · TSE:4927
Pola Orbis — H1 2019 Earnings Presentation
28 slides from Pola Orbis's earnings presentation, 2019
Slide 1: First Half of Fiscal 2019 Supplementary Material
First Half of Fiscal 2019 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: Highlights of Consolidated Performance
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2019 4. Initiatives Going Forward & Appendices 1
Slide 3: Q2 Key Topics
Q2 Key Topics Cosmetics Market ◼ The Japanese cosmetics market including exports showed steady growth. ◼ As for inbound demand, the number of visitors to Japan continued to increase. However, the growth rate of demand has been slowing down, presumably being affected by yen appreciation, in addition
Slide 4: Actual vs Planned Variance Analysis
Actual vs Planned Variance Analysis FY2018 FY2019 YoY Change vs. Plan (Feb. 13, 2019) (mil. yen) H1 Results H1 Results Amount % Amount % Consol. net sales 125,262 110,247 (15,015) (12.0%) (6,752) (5.8%) Operating income 23,103 16,236 (6,866) (29.7%) (4,563) (21.9%) Ordinary income 22,723 15,561 (7,1
Slide 5: Analysis of Consolidated P&L Changes: Net Sales to Operating Income
Analysis of Consolidated P&L Changes Net Sales to Operating Income FY2018 FY2019 YoY Change (mil. yen) H1 Results H1 Results Amount % Consolidated net sales 125,262 110,247 (15,015) (12.0%) Cost of sales 19,847 16,921 (2,926) (14.7%) Gross profit 105,415 93,326 (12,089) (11.5%) SG&A* expenses 82,311
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 FY2018 FY2019 YoY Change (mil. yen) H1 Results H1 Results Amount % Operating income 23,103 16,236 (6,866) (29.7%) Non-operating income 265 218 (47) (17.8%) Non-operating expenses 645 894 248 38.4% Ordina
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 down 35.1% year on year due to a decrease in gross profit as a result of sales decrease (mil. yen) Positive impact Negative impact Decrease in sales at POLA 18,000 Transfer of the pharmaceuticals bu
Slide 8: Segment Analysis
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2019 4. Initiatives Going Forward & Appendices 7
Slide 9: Segment Results
Segment Results FY2018 FY2019 YoY Change (mil yen) H1 Results H1 Results Amount % Consolidated net sales 125,262 110,247 (15,015) (12.0%) Beauty care 116,973 107,733 (9,239) (7.9%) Real estate 1,354 1,319 (34) (2.6%) Others 6,934 1,194 (5,740) (82.8%) Operating income 23,103 16,236 (6,866) (29.7%) B
Slide 10: Beauty Care Business Results by Brands
Beauty Care Business Results by Brands FY2018 FY2019 YoY Change (mil. yen) H1 Results H1 Results Amount % Beauty care net sales 116,973 107,733 (9,239) (7.9%) POLA 76,559 68,788 (7,771) (10.2%) ORBIS 26,032 25,744 (287) (1.1%) Jurlique 4,993 3,415 (1,578) (31.6%) H2O PLUS 960 688 (271) (28.3%) Brand
Slide 11: Brand Analysis (1)
Brand Analysis (1) H1 Result Topics ◼ Demand from buyers decreased mainly for health foods. ◼ Launched two products from the ◼ B.A, the mainstay cosmetics series sustained sales growth. White Shot series in May Overseas business accelerated especially in China and - Won multiple best cosmetics award
Slide 12: Brand Analysis (1) YoY Sales Breakdown for POLA Brand
Brand Analysis (1) YoY Sales Breakdown for POLA Brand Breakdown of YoY change in sales Major sales decline factors Sales decline of Inner Lock Tablet to be moderated shortly By sales channel ✓ Sales of Inner Lock for 1H were down ¥4.8 bil. YoY 00 １ The half of this amount １ (for quarterly sales of I
Slide 13: Brand Analysis (2)
Brand Analysis (2) H1 Result Topics ◼ ORBIS U and DEFENCERA sustained favorable sales. ◼ DEFENCERA won many best The number of new customer exceeded that of 1H last year. cosmetics awards ◼ Strengthened promotions for the purpose of investments for future. (up ¥1.1 bil. YoY) ◼ Online sales grew by 6
Slide 14: Brand Analysis (3) Overseas Brands
Brand Analysis (3) Overseas Brands H1 Result Topics ◼ Jurlique closed down unprofitable stores in China. Jurlique (89 stores as of end of 2018 → 77 stores) ◼ Launched new body care ◼ Sales declined at H2O PLUS as a result of the products Jurlique withdrawal from wholesalers. Body Cleansing Cream & B
Slide 15: Brand Analysis (4) Brands Under Development
Brand Analysis (4) Brands Under Development H1 Result Topics ◼ THREE sustained double-digit sales growth ◼ Won best cosmetics awards overseas. For Japanese domestic sales, growth - THREE Powder Foundation rate slowed down as store expansion completed. - Amplitude Cheeks - ITRIM Facial Gommage ◼ DECE
Slide 16: Forecasts for Fiscal 2019
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2019 4. Initiatives Going Forward & Appendices 15
Slide 17: Forecasts for Fiscal 2019 (Revised)
Forecasts for Fiscal 2019 (Revised) Downward revisions to full-year forecasts factor in variances from initial plan for the first half and updated outlook for the second half FY2019 YoY Change FY2019 vs. Feb. 13 YoY Change (mil. yen) H1 Results Amount % Full-year Plan Plan Amount % Consol. net sales
Slide 18: Revisions to Forecasts for Fiscal 2019
Revisions to Forecasts for Fiscal 2019 In spite of downward revisions at POLA, Jurlique and ORBIS, the Group strives to achieve increases in sales and operating income for the second half in the Beauty care segment FY2019 YoY Change FY2019 vs. Feb. 13 YoY Change (mil. yen) H1 Results Amount % H2 Pla
Slide 19: Initiatives Going Forward & Appendices
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2019 4. Initiatives Going Forward & Appendices 18
Slide 20: Initiatives for 2019 Q3 onward (1)
Initiatives for 2019 Q3 onward (1) Strive for sales growth in 2H driven by overseas acceleration and contribution from new products ◼ Outlook for fiscal 2019 second half (July - December) Achieve sales Re-boost sales of new products from White Shot series. 76,000 Products Continued decline in sales
Slide 21: Initiatives for 2019 Q3 onward (2)
Initiatives for 2019 Q3 onward (2) Aim at increases in sales and OP income for the full year by gaining returns on the investments of 1H ◼ Outlook for fiscal 2019 second half (July - December) [Net sales outlook] [Operating income outlook] - Approach with a focus on ORBIS U and DEFENCERA 26,500 -1%
Slide 22: Initiatives for 2019 Q3 onward (3)
Initiatives for 2019 Q3 onward (3) Bring overseas operations solidly into the black overall ◼ Developed “Jurlique”, an original breed of rose Launch new moisturizing skincare series (August) ◼ Revamped e-commerce website (July) Improve usability and enrich contents to increase conversion rate Jurliq
Slide 23: (Appendix) Improvement in Capital Efficiency and Shareholder Returns
(Appendix) Improvement in Capital Efficiency and Shareholder Returns Initiatives to Improve Capital Efficiency ◼ Operating income CAGR10% (%) ROE movement ◼ Achieve net income growth EPS which is higher than operating 16.0 14.2 Target for 2020 (Earnings per share) income growth by decreasing ROE 12%
Slide 24: (Appendix) 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 FY2018 Consol. Net Sales ¥248.5 bil. Overseas Flagship Brands under Launched in Brands Brands development September 2018 ¥20,000 High Prestige Price
Slide 25: (Appendix) Beauty Care Business Brand Portfolio
(Appendix) Beauty Care Business Brand Portfolio Sales Brand Concept and products Price Main sales channel ratio* ◼ JP:Consignment sales through ◼ High-prestige skincare Approx. Beauty Directors, department store counters ◼ Leading-edge technology in 65% aging-care and skin-whitening ¥10,000 and onli
Slide 26: (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% STAGE1 earnings structure and •Operating margin: 13-15% accelera
Slide 27: (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 28: (Appendix) Beauty Care Business Results for FY2016 – FY2018 by Brands
(Appendix) Beauty Care Business Results for FY2016 – FY2018 by Brands FY2016 FY2017 FY2018 2017 vs 2018 YoY Change (mil. yen) Results Results Results Amount % Consolidated net sales 218,482 244,335 248,574 4,239 1.7% Beauty care net sales 202,446 227,133 231,207 4,074 1.8% POLA 116,126 144,012 150,1