Unicharm Corporation · TSE:8113
Unicharm — Q3 2019 Earnings Presentation
37 slides from Unicharm's earnings presentation, Nov 8, 2019
Slide 1: Third Quarter of Fiscal Year Ending December 31, 2019 Financial Performance
Third Quarter of Fiscal Year Ending December 31, 2019 Financial Performance Unicharm Investor Meeting Presentation Materials November 8, 2019 Takahisa Takahara President and CEO Unicharm Corporation Projections stated in these materials include those based on the Company’s currently obtained assumpt
Slide 2: Financial Performance Summary: Third Quarter 2019
Financial Performance Summary： Third Quarter of Fiscal Year Ending December 31, 2019 ◆ Document notations BC： Baby Care Business FC： Feminine Care Business HC： Health Care Business C&F：Clean & Fresh Business PC： Pet Care Business Copyright (c) Unicharm 2012 Unicharm Corporation. Corporation. All rig
Slide 3: Financial Results Summary
Third quarter of fiscal year ending December 31, 2019 Financial Results Summary Consolidated results Sales of 524.7 billion JPY (5.3% increase), core operating income 68.4 billion JPY (9.8% decrease). Core operating income (COPM) 15.2% ➡ 13.0% (13.8% excluding the impact of rising raw material
Slide 4: Consolidated account highlights
5.3% sales increase, 9.8% core operating income decrease New record high for net sales. Consolidated account highlights (Millions of yen) (Forecast) 3Q of FY 3Q of FY Difference FY Ending Achievement Ended Dec. Ending Dec. Difference Rate (%) Dec. 31, 31, 2018 31, 2019 2019 Net sales 498,115 524,7
Slide 5: Core operating income fluctuation
7.4 billion JPY decrease in income in cumulative three quarters. However, due to improvement toward effects of raw material prices and cross- border EC, period profit of 3Q (July to September) increased YOY. Core operating income fluctuation (100 millions of yen) Selling and administrative Gross p
Slide 6: Geographical segment information
For Asia, China drove increase in sales and profits, India sustained rapid growth. For Japan, strong performance in cross-border EC from July to September compressed the decrease in sales. For others, Middle East, Brazil, U.S.A. are continuing strong performances. Geographical segment information
Slide 7: Core operating income margin by geographical segment
In 3Q(July to September), the profitability improved worldwide. In Japan, the profitability of cross-border EC improve moderately. In Asia, expanding areas and promoting high added value. It reflects profit after 2Q Core operating income margin by geographical segment(from Jan. to Sep.) 25.0% *1 J
Slide 8: Business Segment Information
In personal care, FC and HC are favorable. However, slowing down cross- border EC growth and rising raw material price impact profit in spite of growing sales. In pet care, due to good performance in Japan, North America and Asia, increased in sales and income. Business Segment Information (Millio
Slide 9: Overseas sales composition ratio 62.8%
Overseas sales composition ratio 62.8% （63.4％ excluding foreign exchange impacts） Domestic, overseas sales ration (Jan to Sep) (Billions of yen) 1000 64.4% 62.8% 61.7% 60.2% 58.1% 59.6% 57.2% 60% 800 49.3% 46.0% 46.8% 43.2% 43.3% 44.2% 42.0% 600 40% 400 20% 200 0 0% '13/3Q '14/3Q *1 '15/3Q '16/3Q
Slide 10: Rate fluctuations by currency
Impacts of foreign exchange fluctuations. Approx. 9.4 billion JPY decrease in sales. Approx. 900 million JPY decrease in core operating income Rate fluctuations by currency Exchange rate Exchange rate Currency Change in rate Jan-Sep 2018 Jan-Sep 2019 China (CNY) 16.85 15.90 -5.6% Indonesia (IDR) 0
Slide 11: Free cash flow
Promote to expand businesses by aggressive investing activities and improve corporate value continuingly from maximizing free cash flow sustainability. Free cash flow (Millions of yen) 3Q of FY Ended 3Q of FY Ending Difference Dec. 31, 2018 Dec. 31, 2019 Cash flow from operating activities 79,564
Slide 12: Shareholder Return Policy
Shareholder Return Policy Copyright (c) Unicharm 2012 Unicharm Corporation. Corporation. All rights All rights reserved. reserved.
Slide 13: Shareholder return policy
Through dividend and acquisition of own shares linked to business performance, aiming for total return ratio of 50% in 2019. Shareholder return policy (100 millions of yen) 60% 400 Dividends Purchase of own shares Total return ratio 50% 350 50% 300 40% 250 200 30% 150 20% 100 10% 50 0 0% '11/3 '12
Slide 14: Dividends per share
Implemented steady and continuous dividend payments, on track for 18 consecutive periods of increased dividends. Raised dividend payout ratio. Dividends per share (JPY) 40 Annual dividend (JPY) Consolidated divident payout ratio 35% 30% Approx. 30 26% 25% 20% 20 15% 28 24 10% 10 20 15 16 11 11 13
Slide 15: Stock buy-back acquisition graph
Swiftly acquire stocks through buy-back based on cash conditions. Acquired approx. 15 billion JPY in FY19 Stock buy-back acquisition graph (100 millions of yen) Stock buy-back acquisition 150 155 150 140 140 130 120 100 110 90 76 80 50 0 '11/3 '12/3 '13/3 '14/3 '14/12 *1 '15/12 '16/12 '17/12 '18/1
Slide 16: Improvement of Corporate Value
Improvement of Corporate Value Copyright (c) Unicharm 2012 Unicharm Corporation. Corporation. All rights All rights reserved. reserved.
Slide 17: Unicharm corporate culture (DNA)
【DNA】 Unicharm corporate culture The company can be No.1 only if it remains dedicated to providing outstanding customer satisfaction at all times. Maintaining our No.1 position through continued and dedicated service Changing values Find reason within ourselves AII reasons and responsibilities are y
Slide 18: New DNA: BOP-ship
【New DNA】 BOP-ship Best Ownership Partnership Practice-ship Without any selflessness Taking everything as We learn the best and one’s own work and practice worldwide and always respecting breaking through adopt the best one at the collaboration hardships spontaneously that time with speed. between c
Slide 19: Long-term revenue model targeting a wide range of customers
Long-term revenue model that targets a wide range customers for business development Copyright Copyright (c) (c) Unicharm Corporation. 2012 Unicharm All rights Corporation. reserved. All rights reserved. 19
Slide 20: Strength of support sustainable growth
Strength of support sustainable growth ◆Evolution of our "winning patterns" ◆Expand market by strategy according to the each stage of each country and business Appeal the value of high value-added products and services that match with various needs Spread high-quality products by the affordable pric
Slide 21: Structure of support to sustainable growth
Structure of support to sustainable growth ◆Management with Resonance ◆OODA-Loop method 【An environment where change has become normal (new normal)】 Observation： Observe the situation by five senses Orientation： Orient by obtaining information and past experience and knowledge. All employees continu
Slide 22: Approach to realize a Cohesive Society
Approach to realize a “Cohesive Society” Copyright (c) Unicharm 2012 Unicharm Corporation. Corporation. All rights All rights reserved. reserved.
Slide 23: Initiatives toward a Cohesive Society
Through our initiatives to achieve Unicharm’s envisioned “Cohesive Society”, resolve important issues and achieve sustainable growth 【Unicharm’s Key Challenges】 1. Lengthening Healthy Life 4. Contributing to Expectancy the Community・ Human respect 2. Supporting Women's Independence and Improving Hyg
Slide 24: Lengthening Healthy Life Expectancy
Lengthening Healthy Life Expectancy ◆Continuing participation in "Pink Ribbon activities" Japan and ◆Supporting healthy life expectancy with “Lifree” abroad Contributing to lengthening healthy life expectancy with Cheer the importance of early detection and early Lifree “Social Walking”* detecti
Slide 25: Supporting Women's Independence and Improving Hygiene
Supporting Women's Independence and Improving Hygiene ◆Effort to eliminate ◆Support for low-birth-weight baby “I can't go to school because I am menstruating” Expansion of first menstruation educational programs Support to baby, family and medical organization for in India, Indonesia, and Myanma
Slide 26: Supporting Women's Independence and Improving Hygiene
Supporting Women's Independence and Improving Hygiene ◆Efforts to lighten the burden of double-income households and nursery school teachers Launched baby diaper subscription service (flat rate billing) at nurseries where parents normally bring diapers with them Copyright Copyright (c) (c) Unichar
Slide 27: Contribution to Global Environment
Contribution to Global Environment ◆ Unicharm aimed diaper recycling model Realization of a system to recycle pulp to the same level as unused materials while keeping processing costs at the same level as incineration by improving processing efficiency. Recycled to the same level of sanitation a
Slide 28: Contribution to Global Environment
Contribution to Global Environment ◆Activity for commercializing “recycle technology for used disposable diapers” Establish “Opening Office for Recycle Business” in October 2019 and ESG Division in January 2020. Was successful in the manufacturing of disposable diapers by using recycled pulp and
Slide 29: Contribution to Global Environment
Contribution to Global Environment ◆ Efforts to reduce CO2 emission through products ◆ Efforts to reduce waste in factories Eco-charming products are defined as top products that Realized zero landfill waste by commercializing waste further promotes adaptation to a sustainable society by generat
Slide 30: Contributing to the Community
Contributing to the Community ◆Activities for “Support of Disaster-Affected Areas” Continuing the Matching Fund* which combines Disaster-Affected Area Support and energy-saving initiatives A total of 17,321 people participated in Super Cool Biz / Warm Biz activities over 8 years Utilized as do
Slide 31: Strengthen the company's organization and ensure fair business practices
Strengthen the company’s organization and ensure fair business practices ◆ Maintain governance and enhancement: Transparency ・ Objectivity ・ Fairness Chairman (Nomination Committee ・ Compensation Committee ) changed from Representative Director President Executive Officer to Independent outside di
Slide 32: Activities of digital transformation (DX)
Activities of digital transformation (DX); corporate vision “Nola&Dola (dreams come true for consumers)” ◆Pick up the seeds of consumers’ worries, provide ◆Establishment “Kyo-sei” Social Lab resolvable information Discovery real value to obtain bio‐information Child-rearing Video Media “Babily”
Slide 33: Evaluation from and cooperation with external agencies
Evaluation from and cooperation with external agencies Included in 3 ESG Investment Indices Selected by GPIF Integrated indices Thematic indices Selected Selected Rank up to A Selected Other SRI indices Selected N/A Copyright Copyright (c) (c) Unicharm Corporation. 2012 Unicharm All rights Corporati
Slide 34: Evaluation from and cooperation with external agencies
Evaluation from and cooperation with external agencies Science Base Targets JCI FSC (Japan Climate Initiative) (Forest stewardship council) In June 2018, the company was Develop best practices for Use the pulp preferentially that certified as the 17th target setting advanced groups as an
Slide 35: Evaluation from and cooperation with external agencies
Evaluation from and cooperation with external agencies TCFD (Task Force on Climate-related Financial Disclosure) Agree to “TCFD declaration” and join TCFD consortium Improve the plan based on Paris Agreement and special report of IPCC (Intergovernmental Panel on Climate Change) such as “1.5℃ G
Slide 36: Evaluation from and cooperation with external agencies
Evaluation from and cooperation with external agencies Sedex White 500 Platium Kurumin Male childcare leave 100% For UC Group Factories, registered 19 Recognized the efforts in Earned the right to use the Support “Male childcare leave factories in Japan, principle countries in work s
Slide 37: Copyright Corporation. All rights
Copyright Copyright (c) (c) Unicharm Corporation. 2012 Unicharm All rights Corporation. reserved. All rights reserved. 37