Pola Orbis Holdings Inc. · TSE:4927
Pola Orbis — Q1 2022 Earnings Presentation
25 slides from Pola Orbis's earnings presentation, 2022
Slide 1: First quarter financial results for fiscal year ending December 31, 2022
Today, we will be discussing the first quarter financial results for the fiscal year ending December 31, 2022.
Slide 2: Revenue recognition accounting standard change from FY2022
As announced in February this year, the accounting standard for revenue recognition has applied from FY2022. Accordingly, the results for FY2021 in this document have been replaced by the results using the same accounting standards as those for FY2022. Please note that the results, increase and decr
Slide 3: Agenda
KKK POLA ORBIS BkR HOLDINGS PFwNnN> Highlights of Consolidated Performance Segment Analysis Forecasts for Fiscal 2022 Initiatives Going Forward & Appendices
Slide 4: Market environment and overview of first quarter results
In the cosmetics market as a whole, the domestic market was on a recovery trend at the beginning of the year, but due to the spread of the Omicron variant, the market has been slowing down, and the results for the first quarter were generally the same as the previous year. In overseas markets, China
Slide 5: Consolidated P&L
Next, the Consolidated P&L. Consolidated net sales were down about 12%, or JPY5.1 billion, due to the decrease in POLA's revenue. Although gross profit decreased by JPY4.8 billion due to the decrease in income, we were able to ensure that our operating income decreased by JPY2.1 billion to JPY1.9 bi
Slide 6: Ordinary income and net profit
Ordinary income was JPY4.1 billion, with JPY2.3 billion recorded due to foreign exchange gains from yen depreciation. The income tax expense will decrease by approximately JPY4.5 billion. This is in accordance with the tax effects associated with the loss determined as a result of the dissolution an
Slide 7: Factors in profit attributable to owners of parent
This page shows the factors impacting profit increase or decrease attributable to owners of parent. As you can see, due to the decrease in income taxes resulting from the liquidation of H2O PLUS, net profit for the quarter increased by JPY3.4 billion YoY.
Slide 8: Agenda: Segment Analysis
KKK POLA ORBIS BkR HOLDINGS PFwNnN> Highlights of Consolidated Performance Segment Analysis Forecasts for Fiscal 2022 Initiatives Going Forward & Appendices
Slide 9: Segment results
Here are the segment results. Next, please see page nine.
Slide 10: Results by brand
Here are the results by brands. POLA's revenue and income declined. ORBIS had a slight decline in revenue, but considering the domestic market environment in the first quarter, we believe that this was the result of a healthy performance. The following pages will provide detailed explanations of the
Slide 11: POLA brand results
For POLA, the results were worse than expected due to the restrictions on sales activities of consignment sellers and the sluggish acquisition of new customers, which has continued since last year and has affected the number of customers for the current fiscal year. In the overseas business, we stru
Slide 12: ORBIS brand results
ORBIS focused its web marketing efforts on ORBIS U. and so-called special care products, such as skin brightening products. As a result, revenue in the skincare category in particular increased and, the unit price per customer improved significantly. We can say that the customer structure is shiftin
Slide 13: Jurlique results
Jurlique experienced high growth both offline and online, despite temporary closures and shortened hours at some stores in China. Losses are also improving as planned.
Slide 14: Dissolution and liquidation of H2O PLUS
Regarding H2O PLUS, the dissolution and liquidation of H2O PLUS was resolved at today's Board of Directors meeting as announced. Since joining the Group in 2011, H2O PLUS has been expanding mainly in the United States. However, the Company's performance in recent years has continued to fall short of
Slide 15: Brands under development
For brands under development, revenue from THREE declined due to the suspension of its e-commerce site, but ACRO as a whole posted an increase in income due to the rationalization of new brands. DECENCIA will continue to strive for quality customer structure, control costs by balancing the unit pric
Slide 16: Agenda: Forecasts for Fiscal 2022
KKK POLA ORBIS BkR HOLDINGS PWN > Highlights of Consolidated Performance Segment Analysis Forecasts for Fiscal 2022 Initiatives Going Forward & Appendices 15
Slide 17: Full-year earnings forecast for fiscal 2022
Regarding the full-year earnings forecast for the current fiscal year, we reflected the impact of the dissolution of H2O PLUS, profit has been revised upward by JPY4.3 billion from the previous forecast. The separate timely disclosure on this upward revision released today.
Slide 18: Future initiatives
From here, I will explain our future initiatives.
Slide 19: POLA brand initiatives
The POLA brand will introduce a new product, B.A Lotion Immerse, for the B.A series. This is a product that will be developed into a hero product of the top brand and will be the centerpiece of the first half of this fiscal year. Specifically, as part of the campaign to experience B.A lotion Immerse
Slide 20: Jurlique and brands under development initiatives
As for Jurlique brand, a new brand strategy was launched in 2021, and consistent brand communication has been successful. The Company will strengthen its face care products to establish recognition as a holistic skincare brand and improve its lifetime value, and aim for a decrease in losses. We woul
Slide 21: About POLA ORBIS Group
BEEPOLAORBIS (appendix) About POLA ORBIS Group aS Beauty care is the core business of the Group, and 10 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 H H . High Prestige Jurli
Slide 22: Beauty Care Business Brand Portfolio
KKK POLA ORBIS ee AoLbINGS (Appendix) Beauty Care Business Brand Portfolio ales | SETESE SCH CEE ™ High-prestige skincare Approx. ™ JP: Consignment sales, department stores and e-commerce 60% Pp °o LA ™ Leading-edge technology in aging- ¥10,000 m= Overseas: Department stores, directly-operated store
Slide 23: Improvement in Capital Efficiency and Shareholder Returns
KKK POLA ORBIS (Appendix) Improvement in Capital Efficiency KKK HOLDINGS and Shareholder Returns Initiatives to Improve Capital Efficiency ROE movement (%) ™@ Operating income CAGR 25% 16.0 14.2 @ Achieve net income growth ° . Target for 2023 EPS which is higher than operating ROE 9% (Earnings per s
Slide 24: 2021-2023 Medium-term Management Plan
KEE POLA ORBIS (Appendix) 2021 — 2023 Medium-term Management Plan Management Indicators for 2023 ™ Consolidatednetsales = ¥205.0 to 215.0 bil. in FY2023 caGR 6% or higher i % ii 15% in FY2020) Net Sales ™ Overseas sales ratio > 20 to 25% in FY2023 (15% in ) CAGR 20 to 25% : ic e- Domestic e-commerce
Slide 25: Beauty Care Business Results for FY2019-FY2021 by Brands
KKK POLAORBIS (Appendix) Beauty Care Business Results EEE HOLDINGS for FY2019 — FY2021 by Brands FY2019 FY2020 FY2021 FY2021 (mil. yen) i Results Results Results H iecalesated under the i : : 2022 standard) Consolidated net sales 219,920 176,311 178,642 174,896 mop ate 214,886 171,658 174,150 170,40