Non-Consolidated Financial Results for the Three Months Ended December 31, 2020
[Japanese GAAP]
February 5, 2021
Company name: Code number: Representative: Contact:Shinnihonseiyaku Co., Ltd. 4931
Stock exchange listing: Tokyo Stock Exchange URL:https://corporate.shinnihonseiyaku.co.jpTakahiro Goto, President & Representative Director and Chief Executive Officer Kazuhiro Tagami, Director of the Board
(TEL) +81-92-720-5800
Scheduled date of filing the quarterly securities report: | February 10, 2021 |
Scheduled date of commencing dividend payments: | - |
Availability of supplementary briefing material on quarterly | |
financial results | Yes |
Schedule of quarterly financial results briefing session | Yes (For institutional investors and analysts) |
(Amounts of less than one million yen are rounded down.) |
1. Financial Results for the Three Months Ended December 31, 2020 (October 1, 2020 to December 31, 2020) (1) Operating Results (Cumulative)
(% indicates the change from the corresponding period of the previous fiscal year.)
Net sales | Operating profit | Ordinary profit | Profit | |||||
Three months ended December 31, 2020 Three months ended December 31, 2019 | Million yen 8,489 8,726 | % (2.7) - | Million yen 828 685 | % 20.8 - | Million yen 859 701 | % 22.6 - | Million yen 590 443 | % 33.2 - |
Basic earnings per share | Diluted earnings per share | |
Three months ended December 31, 2020 Three months ended December 31, 2019 | Yen 27.50 20.53 | Yen 27.23 20.53 |
(Note)
Since the Company did not prepare quarterly financial statements for the first quarter of the fiscal year ended September 2019, the percentage change from the corresponding period of the previous fiscal year for the first quarter of the fiscal year ended September 2020 (three months ended December 31, 2019) is not indicated.
(2) Financial Position
Total assets | Net assets | Equity ratio | |
As of December 31, 2020 As of September 30, 2020 | Million yen 19,729 19,956 | Million yen 14,914 14,267 | % 75.1 71.2 |
(Reference) Equity:
As of December 31, 2020
As of September 30, 2020
14,818 million yen 14,201 million yen
2.
Dividends
Annual dividends | |||||
1st quarter-end | 2nd quarter-end | 3rd quarter-end | Year-end | Total | |
Fiscal year ended September 30, 2020 Fiscal year ending September 30, 2021 | Yen - - | Yen 0.00 | Yen - | Yen 30.00 | Yen 30.00 |
Fiscal year ending September 30, 2021 (Forecast) | 0.00 | - | 32.50 | 32.50 |
(Notes) Revision from the most recently announced dividend forecast: No
3.
Financial Results Forecast for the Fiscal Year Ending September 30, 2021 (October 1, 2020 to September 30, 2021)
(% indicates changes from the previous fiscal year.)
Net sales | Operating profit | Ordinary profit | Profit | Basic earnings per share | |||||
Full year | Million yen 35,000 | % 3.8 | Million yen 3,500 | % 5.1 | Million yen 3,460 | % 5.4 | Million yen 2,300 | % 8.4 | Yen 106.14 |
(Notes)
Revision from the most recently announced financial results forecast: No
*Notes
(1) Accounting policies adopted specially for the preparation of the quarterly financial statements
(2) Changes in accounting policies, changes in accounting estimates and retrospective restatement
No
1)
Changes in accounting policies due to the revision of accounting standards:
No
2)
Changes in accounting policies other than 1) above:
No
3)
Changes in accounting estimates:
No
4)
Retrospective restatement:
No
(2) Total number of shares issued (common stock)
1) Total number of shares issued at the end of the period (including treasury shares)
2) Total number of treasury shares at the end of the period
3)Average number of shares during the period (cumulative)
As of December 31, 2020 21,855,200 shares | As of September 30, 2020 21,611,300 shares |
As of December 31, 2020 186,072 shares | As of September 30, 2020 190,140 shares |
Three months ended December 31, 2020 21,483,713 shares | Three months ended December 31, 2019 21,611,300 shares |
* These quarterly financial results are outside the scope of quarterly review by certified public accountants or auditing firms.
* Explanation on the proper use of financial results forecast and other notes
Financial results forecasts and other forward-looking statements herein are based on currently available information and certain assumptions that the Company deems as reasonable, and actual results, etc. may differ significantly from these forecasts due to various factors.
(How to obtain the supplementary briefing material and the content of the financial results briefing)
The Company plans to deliver an online financial results briefing for institutional investors and analysts on Wednesday, February 10, 2021. The supplementary briefing material used in this briefing is disclosed today on TDnet as well as posted on the Company's website.
Table of Contents
1. Qualitative Information for Quarterly Financial Results for the Period Under Review.............................................2
(1) Explanation on Business Results.......................................................................................................................2
(2) Explanation on Financial Position.....................................................................................................................2
(3) Explanation on Financial Results Forecast and Other Forward-Looking Information......................................3
2. Quarterly Financial Statements and Primary Notes....................................................................................................4
(1) Quarterly Balance Sheet.....................................................................................................................................4
(2) Quarterly Statement of Income..........................................................................................................................6
(3) Notes to the Quarterly Financial Statements......................................................................................................7
(Notes on going concern assumptions).......................................................................................................................7
(Notes when there was a substantial change in the amount of shareholders' equity)..................................................7
(Segment information, etc.)........................................................................................................................................7
(Additional information).............................................................................................................................................7
1. Qualitative Information for Quarterly Financial Results for the Period Under Review
(1) Explanation on Business Results
During the three months ended December 31, 2020, the Japanese economy remained in a difficult situation due to stagnation of economic activities and worsening consumer spending caused by the spread of COVID-19 infections. With concerns about a resurge in infections, the outlook for the economy in Japan and overseas is expected to remain uncertain although a moderate recovery in economic activities is likely as measures are taken to prevent the spread of infections.
Under such a market environment, during the three months ended December 31, 2020, sales of PERFECT ONE Wrinkle Stretch Gel, which was newly launched from our core Perfect One All-in-One Gel series, were favorable. However, net sales declined from the same period of the previous fiscal year mainly due to a temporary restraint in advertising investment in consideration of the change in consumer sentiment caused by the concern about the spread of COVID-19 infections in the latter half of the previous fiscal year and the impact of COVID-19 infections on sales in the direct store and wholesale channels. Also, as part of our brand strategy to acquire new customer bases, we broadcasted brand commercials featuring Kento Nakajima as a character and implemented promotional measures linked to social media. As a result, we achieved particularly strong customer acquisition for the Minimum Life generation (Under 40 years old).
In the Mail Order segment, although sales of healthcare products decreased year on year due to a decline in advertising investment, sales of cosmetics through the mail order channel increased year on year due to an increase in unit purchase prices as a result of better-than-expected promotion measures for the gift campaign, in which Kento Nakajima's products were awarded, and efforts to up-sell "PERFECT ONE Wrinkle Stretch Gel" to customers who purchase regularly. Domestic EC sales continued to be strong, and net sales increased by two orders of magnitude over the same period of the previous fiscal year.
Although sales in Direct Store Sales/Wholesale segment were lower than the same period of the previous fiscal year due to the impact of COVID-19 infections, the number of customers and sales greatly exceeded our expectations at the pop-up event held at @cosme TOKYO in Harajuku for a limited period of time, and brand recognition among the Minimum Life generation is expanding.
In Overseas Sales segment, we are continuously working to raise awareness and increase sales through promotions utilizing social media and popular influencers. In China, sales at Double Eleven, a shopping event held on Single's Day (November 11 every year), exceeded those of the previous year, and brand recognition is steadily increasing, mainly in the 20s and 30s. In addition, from the first quarter of the current fiscal year, we started test marketing aimed at sales of the Perfect One brand in the U.S., and we are steadily making efforts to grow into a global standard brand.
In the first quarter of the current fiscal year, we launched the "Smart Healthcare Business" and in October, we launched the "Beauty within protein" as our first product for building strong and beautiful bodies. In the wake of the outbreak of COVID-19 infections, "self-defense" in which individuals manage their own health have been attracting attention. In the Smart Healthcare Business, we plan to sequentially develop products and services based on the concepts of "Evidence" (Products of assured quality supervised by doctors), "Lifestyle" (Autonomous and smart values and behavior), and "SmartTech" (Visualization of body and effects).
As a result of the foregoing, for the first three months of the current fiscal year, net sales were 8,489 million yen (down 2.7% year on year), operating profit was 828 million yen (up 20.8% year on year), ordinary profit was 859 million yen (up 22.6% year on year), and profit was 590 million yen (up 33.2% year on year).
The Company's business segments consist of Mail Order, Direct Store Sales/Wholesale, and Overseas Sales of cosmetics and merchandise related to health care. As the ratio of Direct Store Sales/Wholesale and Overseas Sales to overall sales is insignificant, and their materiality as disclosed information is low, description by business segment has been omitted.
(2) Explanation on Financial Position
Total assets as of the end of the first quarter under review were 19,729 million yen, a decrease of 226 million yen from the end of the previous fiscal year. This was mainly due to a 698 million yen decrease in cash and deposits, a 269 million yen increase in merchandise, and a 255 million yen increase in accounts receivable-trade.
Liabilities totaled 4,815 million yen, a decrease of 873 million from the end of the previous fiscal year. The main factors for the decrease were a decrease of 349 million yen in income taxes payable, a decrease of 313 million yen in accounts payable-other, and a decrease of 119 million yen in accounts payable-trade.
Net assets came to 14,914 million yen, an increase of 647 million yen from the end of the previous fiscal year. The main factors were an increase of 664 million yen due to issuance of new shares, posting of profit of 590 million yen, and a decrease of 642 million yen due to payment of dividends.
(3)Explanation on Financial Results Forecast and Other Forward-Looking Information
The forecast for the fiscal year ending September 30 2021 has not changed from the forecast announced on November 6, 2020 "Non-Consolidated Financial Results for the Fiscal Year Ended September 30, 2020."
Financial results and other forward-looking statements herein are based on information available to the Company and certain assumptions deemed reasonable at the date of publication of this document. Actual results, etc. may differ significantly from these forecasts due to various factors.
2. Quarterly Financial Statements and Primary Notes (1) Quarterly Balance Sheet
(Unit: Million yen)Previous fiscal year (As of September 30, 2020)
First quarter of the current fiscal year
(As of December 31, 2020)
Assets | ||
Current assets | ||
Cash and deposits | 12,271 | 11,573 |
Accounts receivable - trade | 2,607 | 2,863 |
Merchandise | 1,058 | 1,327 |
Other | 350 | 410 |
Allowance for doubtful accounts | (76) | (91) |
Total current assets | 16,211 | 16,084 |
Non-current assets | ||
Property, plant and equipment | 2,297 | 2,253 |
Intangible assets | 470 | 437 |
Investments and other assets | 975 | 955 |
Total non-current assets | 3,744 | 3,645 |
Total assets | 19,956 | 19,729 |
(Unit: Million yen)Previous fiscal year (As of September 30, 2020)
First quarter of the current fiscal year
(As of December 31, 2020)
Liabilities | ||
Current liabilities | ||
Accounts payable - trade | 509 | 389 |
Current portion of long-term borrowings | 173 | 173 |
Accounts payable - other | 2,342 | 2,029 |
Income taxes payable | 631 | 281 |
Provision for bonuses | 189 | 96 |
Provision for point card certificates | 173 | 234 |
Provision for sales returns | 34 | 39 |
Other | 420 | 385 |
Total current liabilities | 4,474 | 3,628 |
Non-current liabilities | ||
Long-term borrowings | 762 | 722 |
Provision for retirement benefits | 159 | 164 |
Provision for retirement benefits for directors (and other officers) | 168 | - |
Other | 123 | 299 |
Total non-current liabilities | 1,214 | 1,186 |
Total liabilities | 5,688 | 4,815 |
Net assets | ||
Shareholders' equity | ||
Share capital | 3,826 | 4,158 |
Capital surplus | 3,817 | 4,147 |
Retained earnings | 6,857 | 6,805 |
Treasury shares | (299) | (293) |
Total shareholders' equity | 14,201 | 14,818 |
Share acquisition rights | 65 | 96 |
Total net assets | 14,267 | 14,914 |
Total liabilities and net assets | 19,956 | 19,729 |
(2) Quarterly Statement of Income First three months of the fiscal year
(Unit: Million yen)First three months of the previous fiscal year
(From October 1, 2019 to
December 31, 2019)
First three months of the current fiscal year
(From October 1, 2020 to
December 31, 2020)
Net sales | 8,726 | 8,489 |
Cost of sales | 1,316 | 1,286 |
Gross profit | 7,410 | 7,202 |
Provision for sales returns | 7 | 5 |
Gross profit - net | 7,403 | 7,197 |
Selling, general and administrative expenses | 6,717 | 6,368 |
Operating profit | 685 | 828 |
Non-operating income | ||
Dividend income | 18 | 41 |
Other | 5 | 6 |
Total non-operating income | 23 | 48 |
Non-operating expenses | ||
Foreign exchange losses | 5 | 4 |
Loss on valuation of investment securities | - | 8 |
Loss on retirement of non-current assets | 1 | 4 |
Other | 0 | 0 |
Total non-operating expenses | 8 | 17 |
Ordinary profit | 701 | 859 |
Profit before income taxes | 701 | 859 |
Income taxes - current | 202 | 251 |
Income taxes - deferred | 54 | 16 |
Total income taxes | 257 | 268 |
Profit | 443 | 590 |
(3)Notes to the Quarterly Financial Statements
(Notes on going concern assumptions)
Not applicable
(Notes when there was a substantial change in the amount of shareholders' equity)
As a result of the issuance of 243,900 new shares through paid-in capital increase through third-party allotment (capital increase by third-party allotment in connection with offering by over-allotment) on December 23, 2020, share capital and capital surplus each increased by 332 million yen. As a result, share capital was 4,158 million yen and capital surplus was 4,147 million yen at the end of the first quarter under review.
(Segment information, etc.)
The Company's business segments consist of Mail Order, Direct Store Sales/Wholesale, and Overseas Sales of cosmetics and merchandise related to health care. As the ratio of Direct Store Sales/Wholesale and Overseas Sales to overall sales is insignificant, and their materiality as disclosed information is low, description by business segment has been omitted.
(Additional information)
(Abolition of the retirement benefits system for directors and other officers)
At the 32nd Ordinary General Meeting of Shareholders held on December 23, 2020, the Company passed a resolution to discontinue the retirement benefits system for directors and other officers. As a result, "Provision for retirement benefits for directors (and other officers)" was reduced in its entirety, and 172 million yen recorded in the account has been included in "Long-term accounts payable-other" in "Other" of non-current liabilities.