Pola Orbis Holdings Inc. · TSE:4927
Pola Orbis — H1 2020 Earnings Presentation
28 slides from Pola Orbis's earnings presentation, 2020
Slide 1: First Half of Fiscal 2020 Supplementary Material
First Half of Fiscal 2020 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 2020 4. Initiatives Going Forward & Appendices 1
Slide 3: Q2 Key Topics
Q2 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 Q2
Impact of COVID-19 in Q2 Impact of COVID-19 on net sales in the first half of FY 2020: -¥265 billion First half has generally progressed in line with the revised plan Business Declaration of a State of Phased lifting of the State of Emergency; fully lifted at operations Emergency in Japan the end of
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) H1 Results H1 Results Amount % Consolidated net sales 110,247 83,802 (26,445) (24.0%) Cost of sales 16,921 13,567 (3,354) (19.8%) Gross profit 93,326 70,234 (23,091) (24.7%) SG&A expenses 77,089 64,35
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 FY2019 FY2020 YoY Change (mil. yen) H1 Results H1 Results Amount % Operating income 16,236 5,881 (10,354) (63.8%) Non-operating income 218 206 (11) (5.4%) Non-operating expenses 894 1,544 650 72.8% Ordinary
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 -90.8% YoY (mil. yen) Negative impact Positive impact 10,000 9,938 8,000 6,000 4,000 Decrease due to POLA revenue decline 2,00
Slide 8: Segment Analysis
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) H1 Results H1 Results Amount % Consolidated net sales 110,247 83,802 (26,445) (24.0%) Beauty care 107,733 81,401 (26,332) (24.4%) Real estate 1,319 1,225 (94) (7.1%) Others 1,194 1,175 (18) (1.6%) Operating income 16,236 5,881 (10,354) (63.8%) Beaut
Slide 10: Beauty Care Business Results by Brands
Beauty Care Business Results by Brands FY2019 FY2020 YoY Change (mil. yen) H1 Results H1 Results Amount % Beauty care net sales 107,733 81,401 (26,332) (24.4%) POLA 68,788 47,956 (20,832) (30.3%) ORBIS 25,744 22,779 (2,964) (11.5%) Jurlique 3,415 2,608 (807) (23.6%) H2O PLUS 688 405 (283) (41.1%) Br
Slide 11: Brand Analysis (1)
Brand Analysis (1) H1 Result Topics Sales to inbound customers and buyers continued to decrease due to COVID-19 Overseas revenue In Japan, revenue decreased significantly from the impact of refraining increased from outside activities, store shutdowns and shorter store opening hours following
Slide 12: Brand Analysis (2)
Brand Analysis (2) H1 Result Revenue decreased due to the temporary closure of all stores Topics under the Declaration of a State of Emergency H1 Best cosmetics awards New mail-order (online and catalog) customer acquisition - ORBIS U WASH progressed well due to the induction of store customer
Slide 13: Brand Analysis (3) Overseas Brands
Brand Analysis (3) Overseas Brands H1 Result Topics Jurlique revenue declined with store shutdowns due to the Jurlique spread of COVID-19 Limited edition product launch of the H2O PLUS proceeded with e-commerce shift to reform popular Rosewater Mist (May) business structure New e-commerce cust
Slide 14: Brand Analysis (4) Brands Under Development
Brand Analysis (4) Brands Under Development H1 Result Topics Department stores closed temporarily due to COVID-19, DECENCIA and product sales struggled after reopening due to commenced refraining from providing trial use of cosmetics cross-border THREE domestic e-commerce grew (+120% YoY) e-co
Slide 15: Forecasts for Fiscal 2020
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 (Unchanged)
Forecasts for Fiscal 2020 (Unchanged) FY2020 YoY Change FY2020 YoY Change (mil. yen) H1 Results Amount % Full-year Plan Amount % Consol. net sales 83,802 (26,445) (24.0%) 190,000 (29,920) (13.6%) Beauty care 81,401 (26,332) (24.4%) 185,400 (29,486) (13.7%) Real estate 1,225 (94) (7.1%) 2,300 (319) (
Slide 17: Forecasts for Fiscal 2020
Forecasts for Fiscal 2020 FY2020 YoY Change FY2020 YoY Change (mil. yen) H1 Results Amount % H2 Plan Amount % Consol. net sales 83,802 (26,445) (24.0%) 106,198 (3,475) (3.2%) Beauty care 81,401 (26,332) (24.4%) 103,999 (3,153) (2.9%) Real estate 1,225 (94) (7.1%) 1,075 (225) (17.3%) Others 1,175 (18
Slide 18: Initiatives to Achieve Forecasts for Fiscal 2020
Initiatives to Achieve Forecasts for Fiscal 2020 Take significant change in the business environment as an opportunity to boldly transform our sales channels Meanwhile, operations will be rationalized through review of cost structures and reinforcement of SG&A expense control FY2020 YoY Change Adapt
Slide 19: Initiatives Going Forward & Appendices
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2020 4. Initiatives Going Forward & Appendices 18
Slide 20: Initiatives for 2020 Q3 onward
Initiatives for 2020 Q3 onward ■ Sustain stable growth of flagship brands to lead Group earnings Channel strategy in the COVID-19 crisis Japan: Accelerate the shift to e-commerce in Japan (approx. +100% YoY) Overseas: Enhance points of contact with customers in China, where recovery has been swi
Slide 21: Initiatives for 2020 Q3 onward
Initiatives for 2020 Q3 onward ■ Sustain stable growth of flagship brands to lead Group earnings Channel strategy in the COVID-19 crisis Convert new customers to loyal customers, and improve profitability by enhancing life-time value (LTV) Increase the speed of transformation to a business pivot
Slide 22: Initiatives for 2020 Q3 onward
Initiatives for 2020 Q3 onward ■ Bring overseas operations solidly into the black overall Target investment in China towards the digital domain Focus on communicating information through social media and live-streaming Open a special site to commemorate the 35th anniversary of founding Promote s
Slide 23: 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 24: 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. Leading-edge technology Beauty Directors, department store counters and online 63% in aging-care and skin- ¥10,000 Ove
Slide 25: 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 26: 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: 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: 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