Pola Orbis Holdings Inc. · TSE:4927
Pola Orbis — FY2022 Earnings Presentation
39 slides from Pola Orbis's earnings presentation, 2023
Slide 1: Fiscal 2022 Supplementary Material
Fiscal 2022 Supplementary Material POLA ORBIS HOLDINGS INC. Representative Director and President Yoshikazu Yokote This report contains projections of performance and other projections based on information currently available and certain assumptions judged to be reasonable. Actual performance may di
Slide 2: Accounting standard application note
◼ 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. Progress on the Medium-term Management Plan 4. Forecasts for Fiscal 2023 and Initiatives Going Forward 5. Sustainability and ESG Initiatives 6. Appendices 2
Slide 4: FY2022 Key Topics
FY2022 Key Topics Cosmetics Market ◼ The scale of the Japanese cosmetics market (including exports) as a whole recovered moderately. ◼ The recovery trend continued in the Japanese market, except for inbound demand. ◼ In the overseas market, mainland China continued to suffer the impact of the rapid
Slide 5: Actual vs Planned Variance Analysis
Actual vs Planned Variance Analysis FY2021 FY2022 YoY change Jul. 29, 2022 vs. Plan Results (mil. yen) (recalculated under Results Amount % Plan Amount % the 2022 standard) Consol. net sales 174,896 166,307 (8,588) (4.9%) 170,000 (3,692) (2.2%) Operating income 15,582 12,581 (3,000) (19.3%) 11,700 8
Slide 6: Consolidated P&L Changes Analysis: Net Sales to Operating Income
Consolidated P&L Changes Analysis Net Sales to Operating Income FY2021 FY2022 YoY Change Results (mil. yen) (recalculated under the Results Amount % 2022 standard) Consolidated net sales 174,896 166,307 (8,588) (4.9%) Cost of sales 31,291 31,037 (254) (0.8%) Gross profit 143,604 135,270 (8,334) (5.8
Slide 7: 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 Results (recalculated (mil. yen) under the 2022 standard) Results Amount % Operating income 15,582 12,581 (3,000) (19.3%) Non-operating income 2,297 2,773 475 20.7% Non-operating ex
Slide 8: 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 ¥622 mil. YoY due to a reduction in income taxes etc. resulting from the impact of the liquidation of H2O PLUS. (mil. yen) Positive impact
Slide 9: Segment Analysis
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Progress on the Medium-term Management Plan 4. Forecasts for Fiscal 2023 and Initiatives Going Forward 5. Sustainability and ESG Initiatives 6. Appendices 8
Slide 10: Segment Results
Segment Results FY2021 FY2022 YoY Change (mil yen) Results (recalculated Results Amount % under the 2022 standard) Consolidated net sales 174,896 166,307 (8,588) (4.9%) Beauty care 170,403 161,654 (8,749) (5.1%) Real estate 2,112 2,083 (29) (1.4%) Others 2,379 2,569 189 8.0% Operating income 15,582
Slide 11: Beauty Care Business Results by Brands
Beauty Care Business Results by Brands FY2021 FY2022 YoY Change (mil. yen) Results (recalculated Results Amount % under the 2022 standard) Beauty care net sales 170,403 161,654 (8,749) (5.1%) POLA 105,769 96,371 (9,397) (8.9%) ORBIS 39,071 38,417 (654) (1.7%) Jurlique 7,940 8,388 447 5.6% H2O PLUS 1
Slide 12: Brand Analysis (1)
Brand Analysis (1) FY2022 Results Topics ◼ For domestic, revenue from consignment sales decreased due to a decline in customer numbers, but revenue increased from the high price range B.A ◼ Launched a renewed eye cream series, and net sales of aesthetic treatment are in a recovery trend, reaching fo
Slide 13: Brand Analysis (2)
Brand Analysis (2) FY2022 Results Topics ◼ The new ORBIS U contributed to an increase in revenue in ◼ Launched hada ka.r.te (November), a new the fourth quarter, bringing income growth into double service to support beauty habits with figures. proposals tailored to each customer’s skin ◼ The decline
Slide 14: Brand Analysis (3) Overseas Brands
Brand Analysis (3) Overseas Brands FY2022 Results Topics ◼ Losses were ameliorated for Jurlique, with a return to profit ◼ Jurlique launched a nighttime cream for the fourth quarter. mask (October) Sales were strong in mainland China, despite the continued impact of COVID-19. HYDRATING MASK Q4 (YTD)
Slide 15: Brand Analysis (4) Brands Under Development
Brand Analysis (4) Brands Under Development FY2022 Results Topics ◼ Proceeded with the structural reform of ACRO, which runs THREE, and ◼ DECENCIA launched a new ameliorated losses. aging-care series (October) ◼ Net sales of THREE grew on external e-commerce platforms, in addition to the impact of t
Slide 16: Progress on the Medium-term Management Plan
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Progress on the Medium-term Management Plan 4. Forecasts for Fiscal 2023 and Initiatives Going Forward 5. Sustainability and ESG Initiatives 6. Appendices 15
Slide 17: Progress of 2021-2023 Medium-term Management Plan
Progress of 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) sal
Slide 18: Progress of 2021-2023 Medium-term Management Plan: Growth Strategies
Progress of 2021-2023 Medium-term Management Plan 【Growth Strategies】 Strategies Evaluation - Although it took some time for POLA customer numbers to recover, the decline has slowed, and progress has been made in the introduction Evolve domestic direct Slightly 1 selling behind - of app and the expa
Slide 19: Forecasts for Fiscal 2023 and Initiatives Going Forward
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Progress on the Medium-term Management Plan 4. Forecasts for Fiscal 2023 and Initiatives Going Forward 5. Sustainability and ESG Initiatives 6. Appendices 18
Slide 20: Trends in the Cosmetics Market
Trends in the Cosmetics Market Domestic Cosmetics Market Percentage by Domestic Route Percentage by Domestic Price Range Bottom to top: 1-1000 1001-3000 Cosmetic store Drugstore 3001-5000 5001-10000 (100 mil. yen) Department store E-commerce 10001- 100% 14,000 100% 12,000 80% 80% 10,000 60% 8,000 60
Slide 21: Forecasts for Fiscal 2023
Forecasts for Fiscal 2023 YoY Change FY2022 FY2023 YoY Change (same-standard basis) (mil. yen) Full-year Results Amount % Full-year plan Amount % Consol. net sales 166,307 (8,588) (4.9%) 180,000 13,692 8.2% Beauty care 161,654 (8,749) (5.1%) 175,500 13,845 8.6% Real estate 2,083 (29) (1.4%) 2,000 (8
Slide 22: Initiatives Going Forward: POLA Domestic
Initiatives Going Forward: POLA Domestic ◼ Promote OMO and build a new business model to integrate domestic customer data and seamlessly connect each sales channel. ◼ Prioritize expanding the top line, with upfront investment to bring about a reversal in customer numbers, already in a growth trend,
Slide 23: Initiatives Going Forward: POLA Overseas
Initiatives Going Forward: POLA Overseas ◼ Mainland China is a key market: firmly establish brand presence. ◼ Accelerate growth in other regions in Asia. Overseas strategy Overseas sales* ■ Mainland China (including mainland China travel retail) ◼ Mainland China ■ Other (Korea, Hong Kong, Taiwan, Th
Slide 24: Initiatives Going Forward: Changes in ORBIS Customer Composition
Initiatives Going Forward: Changes in ORBIS Customer Composition ◼ Rebranding to expand the target customer demographics accessible through the value offered by the brand. ◼ Although customer numbers have been declining with strategies targeting an improvement in customer composition, they recovered
Slide 25: Initiatives Going Forward: ORBIS
Initiatives Going Forward: ORBIS ◼ Evolve its unique customer data platform and achieve a return to revenue growth by increasing customer numbers and maximizing LTV. ◼ Open up new markets for further business growth and launch new skincare products for the senior generation in 2023. ORBIS customer d
Slide 26: Initiatives Going Forward: Jurlique
Initiatives Going Forward: Jurlique ◼ Reset the timing of a return to profitability to 2024 in view of the prolonged impact of COVID-19, especially in mainland China. ◼ Expand the top line and proceed with further structural reforms to lower the breakeven point, aiming for an early return to profita
Slide 27: Initiatives Going Forward: Brands Under Development
Initiatives Going Forward: Brands Under Development ◼ Swiftly achieve profitability in currently unprofitable brands as a top priority, and promote structural reform for THREE to turn profitable in 2024. ◼ For FUJIMI, aim for further business expansion and profitability in 2023 (before amortization
Slide 28: Initiatives Going Forward: Strengthen Operations
Initiatives Going Forward: Strengthen Operations Research and development ◼ Unique research strategy for new value creation • Dispatch researchers to the research base in Singapore and build the infrastructure for new value creation, starting with Mirror Skin research. • Strengthen external collabor
Slide 29: Sustainability and ESG Initiatives
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Progress on the Medium-term Management Plan 4. Forecasts for Fiscal 2023 and Initiatives Going Forward 5. Sustainability and ESG Initiatives 6. Appendices 28
Slide 30: The Commitment to Sustainability of the Group
The Commitment to Sustainability of the Group The unique KPIs to realize a sustainable society Corresponding Materiality Categories SDGs KPIs Targets for 2029 • Number of new businesses created • Cumulative total of 10 (2023) • Job satisfaction and engagement score • 75% QOL improvement • Brand reco
Slide 31: Sustainability and ESG Initiatives
Sustainability and ESG Initiatives Main initiatives in 2022 ◼ Established the Diversity Promotion Committee, led and strongly promoted by a top female officer. All-inclusive • Engaged in training to reform gender awareness within the Group. human resources • Actively communicated on female empowerme
Slide 32: Appendices
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Progress on the Medium-term Management Plan 4. Forecasts for Fiscal 2023 and Initiatives Going Forward 5. Sustainability and ESG Initiatives 6. Appendices 31
Slide 33: (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 Mid-term 16.0 14.2 ◼ Achieve net income growth Management Plan EPS which is higher than operating Indicator for 2023 (Earnings per sha
Slide 34: (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%) 46,652 0.7% Beauty care 36,516
Slide 35: (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%) 45,423 0.6% POLA 21,229 (20.0
Slide 36: (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. FY2022 Consol. Net Sales ¥166.3 bil. Overseas Flagship Brands under Brands Brands development ¥20,000 High Prestige Price Range ¥10,000 Prestige
Slide 37: (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 38: (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 39: (Appendix) Beauty Care Business Results for FY2021 – FY2022 by Brands
(Appendix) Beauty Care Business Results for FY2021 – FY2022 by Brands FY2021 - FY2022 FY2021 FY2021 FY2022 YoY Change Results (mil. yen) Results (recalculated under the Results Amount % 2022 standard) Consolidated net sales 178,642 174,896 166,307 (8,588) (4.9%) Beauty care net sales 174,150 170,403