Pola Orbis Holdings Inc. · TSE:4927
Pola Orbis — Q1 2019 Earnings Presentation
24 slides from Pola Orbis's earnings presentation, 2019
Slide 1: First Quarter of Fiscal 2019 Supplementary Material
First Quarter of Fiscal 2019 Supplementary Material POLA ORBIS HOLDINGS INC. Director and Vice President Management Planning, IT, HR and Group International Business Naoki Kume This report contains projections of performance and other projections based on information currently available and certain
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: Q1 Key Topics
Q1 Key Topics Cosmetics Market ◼ The Japanese cosmetics market including exports showed steady growth. ◼ As for the inbound market, the number of tourists visiting Japan has been growing. However, the demands from inbound customers and buyers decelerated tentatively due to the enactment of the e- co
Slide 4: 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) Q1 Results Q1 Results Amount % Consolidated net sales 59,526 52,440 (7,085) (11.9%) Cost of sales 9,445 8,011 (1,434) (15.2%) Gross profit 50,081 44,429 (5,651) (11.3%) SG&A* expenses 40,137 37,655
Slide 5: 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) Q1 Results Q1 Results Amount % Operating income 9,943 6,773 (3,169) (31.9%) Non-operating income 155 182 26 16.9% Non-operating expenses 638 430 (208) (32.6%) Ordinary
Slide 6: 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 8,000 Transfer of the pharmaceuticals bus
Slide 7: Segment Analysis
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2019 4. Initiatives Going Forward & Appendices 6
Slide 8: Segment Results
Segment Results FY2018 FY2019 YoY Change (mil yen) Q1 Results Q1 Results Amount % Consolidated net sales 59,526 52,440 (7,085) (11.9%) Beauty care 55,821 51,165 (4,656) (8.3%) Real estate 676 658 (18) (2.7%) Others 3,028 617 (2,410) (79.6%) Operating income 9,943 6,773 (3,169) (31.9%) Beauty care 9,
Slide 9: Beauty Care Business Results by Brands
Beauty Care Business Results by Brands FY2018 FY2019 YoY Change (mil. yen) Q1 Results Q1 Results Amount % Beauty care net sales 55,821 51,165 (4,656) (8.3%) POLA 36,164 32,021 (4,142) (11.5%) ORBIS 12,475 12,317 (157) (1.3%) Jurlique 2,599 1,866 (733) (28.2%) H2O PLUS 517 354 (163) (31.5%) Brands un
Slide 10: Brand Analysis (1)
Brand Analysis (1) Q1 Result Topics ◼ Sales to inbound customers and buyers decreased. ◼ Constantly introduce new “Inner Lock” was weaker than expected. and limited products ◼ The mainstay “B.A” series sustained sales growth. Left : Wrinkle Shot Serum Large Size Overseas business accelerated in Chin
Slide 11: Brand Analysis (2)
Brand Analysis (2) Q1 Result Topics ◼ “DEFENCERA” sold better than expected. ◼ Full-scale launch of “DEFENCERA” in January Additional promotional and advertising investments - FOSHU with verified function for skin implemented together with “ORBIS U”. (+¥600 mil YoY) - Available on cross-border EC fr
Slide 12: Brand Analysis (3) Overseas Brands
Brand Analysis (3) Overseas Brands Q1 Result Topics ◼ Jurlique has begun to undertake reforms in order Jurlique to turn into profitability. ◼ Constantly Introduce new products Carried out withdrawal from unprofitable business ◼ Work with POLA CHEMICAL and rationalization of headquarters organization
Slide 13: Brand Analysis (4) Brands Under Development
Brand Analysis (4) Brands Under Development Q1 Result Topics ◼ THREE took measures to improve the customer repeat ◼ New products from THREE and Amplitude rate in order to strengthen the business structure. Overseas sales continued to be strong mainly at duty free. Left : THREE ◼ New brands from ACRO
Slide 14: Forecasts for Fiscal 2019
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2019 4. Initiatives Going Forward & Appendices 13
Slide 15: Forecasts for Fiscal 2019 (No Change)
Forecasts for Fiscal 2019 (No Change) No revision to the forecast after reflecting the impact of new whitening products from POLA FY2019 YoY Change FY2019 YoY Change (mil. yen) H1 Plan Amount % Full-year Plan Amount % Consol. net sales 117,000 (8,262) (6.6%) 241,000 (7,574) (3.0%) Beauty care 114,60
Slide 16: Initiatives Going Forward & Appendices
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2019 4. Initiatives Going Forward & Appendices 15
Slide 17: Initiatives for 2019 Q2 onward
Initiatives for 2019 Q2 onward ■ Sustain stable growth of flagship brands to lead Group earnings ◼ Launch new products with the new skin whitening active ingredient from the “White Shot” series in May ✓ ¥6.0 billion sales target for fiscal 2019 (retail-sales basis) ✓ Aim for customer acquisition as
Slide 18: Initiatives for 2019 Q2 onward
Initiatives for 2019 Q2 onward ■ Bring overseas operations solidly into the black overall ◼ Work on channel streamlining as well as selection and concentration of costs to reduce losses ◼ Revitalize storefronts by introducing new products ◼ Expand brand recognition by utilizing social media and enha
Slide 19: 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 20: 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 21: Beauty Care Business Brand Portfolio
(Appendix) Beauty Care Business Brand Portfolio Sales Brand Concept and products Price Sales channel ratio* ◼ High-prestige skincare ◼ Consignment sales through Approx. ◼ Leading-edge technology in Beauty Directors, department store 65% anti-aging and skin-whitening ¥10,000 counters and online Flags
Slide 22: 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 23: 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 24: 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