Pola Orbis Holdings Inc. · TSE:4927
Pola Orbis — Q3 2022 Earnings Presentation
28 slides from Pola Orbis's earnings presentation, 2022
Slide 1: Third Quarter of Fiscal 2022 Supplementary Material
Third Quarter of Fiscal 2022 Supplementary Material POLA ORBIS HOLDINGS INC. Corporate Officer PR, IR, CSR and Sustainability Naotaka Hashi This report contains projections of performance and other projections based on information currently available and certain assumptions judged to be reasonable.
Slide 2: Accounting standard change notice
◼ POLA ORBIS HOLDINGS INC. has applied Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. from fiscal 2022. ◼ Regarding the results for fiscal 2021: The results for fiscal 2021 presented in this presentation have been calculated using the same accounting standa
Slide 3: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2022 4. Initiatives Going Forward & Appendices 2
Slide 4: Q3 Key Topics
Q3 Key Topics Cosmetics Market ◼ The scale of the Japanese cosmetics market (including exports) as a whole was robust. ◼ The recovery trend continued in the Japanese market, except for inbound demand, with signs of a return in customer traffic. ◼ In the overseas market, mainland China continued to s
Slide 5: Consolidated P&L Changes Analysis: Net Sales to Operating Income
Consolidated P&L Changes Analysis Net Sales to Operating Income FY2021 FY2022 YoY Change Q3 Results (YTD) (mil. yen) (recalculated under the Q3 Results (YTD) Amount % 2022 standard) Consolidated net sales 128,560 119,654 (8,905) (6.9%) Cost of sales 22,479 21,795 (683) (3.0%) Gross profit 106,080 97
Slide 6: Consolidated P&L Changes Analysis: Operating Income to Profit
Consolidated P&L Changes Analysis Operating Income to Profit Attributable to Owners of Parent FY2021 FY2022 YoY Change Q3 Results (YTD) (mil. yen) (recalculated under the Q3 Results (YTD) Amount % 2022 standard) Operating income 11,419 7,668 (3,750) (32.8%) Non-operating income 1,377 4,903 3,526 255
Slide 7: Factors Impacting Profit Attributable to Owners of Parent
Factors Impacting Profit Attributable to Owners of Parent While gross profit decreased due to lower revenue, profit attributable to owners of parent increased by ¥4,944 mil. YoY due to a reduction in income taxes etc. resulting from the impact of exchange rates and the liquidation of H2O PLUS. (mil.
Slide 8: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2022 4. Initiatives Going Forward & Appendices 7
Slide 9: Segment Results
Segment Results FY2021 FY2022 YoY Change Q3 Results (YTD) (mil yen) (recalculated under the Q3 Results (YTD) Amount % 2022 standard) Consolidated net sales 128,560 119,654 (8,905) (6.9%) Beauty care 125,247 116,231 (9,016) (7.2%) Real estate 1,581 1,561 (20) (1.3%) Others 1,731 1,861 130 7.5% Operat
Slide 10: Beauty Care Business Results by Brands
Beauty Care Business Results by Brands FY2021 FY2022 YoY Change Q3 Results (YTD) (mil. yen) (recalculated under the Q3 Results (YTD) Amount % 2022 standard) Beauty care net sales 125,247 116,231 (9,016) (7.2%) POLA 77,825 69,462 (8,362) (10.7%) ORBIS 29,263 28,109 (1,153) (3.9%) Jurlique 5,175 5,387
Slide 11: Brand Analysis (1) POLA
Brand Analysis (1) Q3 Result (YTD) Topics ◼ Consignment sales showed a recovery trend with the return of customer numbers, both new and existing. New customer acquisitions through online ◼ Launched on Douyin in mainland China (July) touchpoints showed double-digit YoY growth in July to September. ◼
Slide 12: POLA Consignment Sales Channel Customer Trends
Brand Analysis (1) POLA Consignment Sales Channel Customer Trends Net sales from the consignment sales channel for July to September recovered to a similar level to last year due to an improvement in customer trends (customer numbers and frequency of store visits), in addition to a continued strong
Slide 13: Brand Analysis (2) ORBIS
Brand Analysis (2) Q3 Result (YTD) Topics ◼ The new ORBIS U contributed to new customer acquisition, with ◼ Renewed ORBIS U skincare series, high-single-digit growth* in the number of mail-order customers the symbol of ORBIS (August) from July to September. Measures targeting inactive customers also
Slide 14: Brand Analysis (3) Overseas Brands
Brand Analysis (3) Overseas Brands Q3 Result (YTD) Topics ◼ Jurlique continued to struggle in Hong Kong, and suffered ◼ Jurlique launched face oil (September) from the impact of COVID-19 on storefronts in mainland China, but performed strongly in e-commerce. ◼ Excluding the impact of exchange rates,
Slide 15: Brand Analysis (4) Brands Under Development
Brand Analysis (4) Brands Under Development Q3 Result (YTD) Topics ◼ THREE continued to strengthen online communication. ◼ THREE launched cream for the areas ◼ DECENCIA restrained advertising investment for current around the eyes and mouth (September) products in preparation for main series renewal
Slide 16: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2022 4. Initiatives Going Forward & Appendices 15
Slide 17: Forecasts for Fiscal 2022 (Unchanged)
Forecasts for Fiscal 2022 (Unchanged) YoY Change YoY Change FY2022 (same-standard basis) (same-standard basis) FY2022 Q3 Results Full-year Plan (mil. yen) (YTD) Amount % Amount % Consol. net sales 119,654 (8,905) (6.9%) 170,000 (4,896) (2.8%) Beauty care 116,231 (9,016) (7.2%) 165,800 (4,603) (2.7%)
Slide 18: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2022 4. Initiatives Going Forward & Appendices 17
Slide 19: Initiatives for 2022 Q4 onward
Initiatives for 2022 Q4 onward ◼ Launch new products from the main product series and strengthen online presence, including through the app and store social media sites. ➢ Renew B.A EYE ZONE CREAM (October). Expand new customer contact points and encourage existing customers to visit stores by hosti
Slide 20: Initiatives for 2022 Q4 onward
Initiatives for 2022 Q4 onward Overseas Brands ◼ Improve brand entry and retention rate, pivoting on facial care products. ◼ Launch a holiday collection to maximize performance in the year-end sales. ◼ Promote a shift to renewable materials for product containers and packaging to achieve coexistence
Slide 21: (Appendix) Quarterly Segment Results
(Appendix) Quarterly Segment Results ◼ Net sales FY2022 Jan.-Mar. FY2022 Apr.-Jun. FY2022 Jul.-Sep. FY2022 Oct.-Dec. YoY YoY YoY YoY (mil. yen) Results Results Results Results Change Change Change Change Consolidated net sales 37,662 (11.9%) 41,085 (6.9%) 40,906 (1.8%) - - Beauty care 36,516 (12.3%)
Slide 22: (Appendix) Quarterly Results by Brands
(Appendix) Quarterly Results by Brands ◼ Net sales FY2022 Jan.-Mar. FY2022 Apr.-Jun. FY2022 Jul.-Sep. FY2022 Oct.-Dec. YoY YoY YoY YoY (mil. yen) Results Results Results Results Change Change Change Change Beauty care net sales 36,516 (12.3%) 39,903 (7.3%) 39,810 (1.9%) - - POLA 21,229 (20.0%) 23,82
Slide 23: (Appendix) About POLA ORBIS Group
(Appendix) About POLA ORBIS Group Beauty care is the core business of the Group, and nine different cosmetics brands are operated under the Group umbrella. FY2021 Consol. Net Sales ¥178.6 bil. Overseas Flagship Brands under Brands Brands development ¥20,000 High Prestige Price Range ¥10,000 Prestige
Slide 24: (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 60% ◼ Leading-edge technology in aging- ¥10,000 ◼ Overseas: Department stores, directly-operated
Slide 25: (Appendix) Improvement in Capital Efficiency and Shareholder Returns
(Appendix) Improvement in Capital Efficiency and Shareholder Returns Initiatives to Improve Capital Efficiency ROE movement ◼ Operating income CAGR 25% (％) or higher ◼ Achieve net income growth 16.0 14.2 Target for 2023 EPS which is higher than operating (Earnings per share) income growth by decreas
Slide 26: (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
Slide 27: (Appendix) 2021 – 2023 Medium-term Management Plan
(Appendix) 2021 – 2023 Medium-term Management Plan Management Indicators for 2023 ◼ Consolidated net sales ⇒ ¥205.0 to 215.0 bil. in FY2023 CAGR 6％ or higher ◼ Overseas sales ratio ⇒ 20 to 25% in FY2023 (15% in FY2020) Net Sales CAGR 20 to 25％ ◼ Domestic e-commerce ⇒ 30% in FY2023 (24% in FY2020) sa
Slide 28: (Appendix) Beauty Care Business Results for FY2019 – FY2021 by Brands
(Appendix) Beauty Care Business Results for FY2019 – FY2021 by Brands FY2019 FY2020 FY2021 FY2021 Results (mil. yen) Results Results Results (recalculated under the 2022 standard) Consolidated net sales 219,920 176,311 178,642 174,896 Beauty care net sales 214,886 171,658 174,150 170,403 POLA 135,50