Pola Orbis Holdings Inc. · TSE:4927
Pola Orbis — FY2011 Earnings Presentation
38 slides from Pola Orbis's earnings presentation, February 2012
Slide 1: Conference Presentation for Financial Results of Fiscal 2011
Conference Presentation for Financial Results of Fiscal 2011 Satoshi Suzuki President POLA ORBIS HOLDINGS INC. This report contains projections of performance and other projections based on information currently available and certain assumptions judged to be reasonable. Actual performance may differ
Slide 2: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis and Progress of Key Strategies 3. Forecasts for Fiscal 2012 4. Initiatives for Fiscal 2012 Onward 5. Acquisition of Jurlique International Pty Ltd 2
Slide 3: Highlights of Consolidated Performance: P&L Summary
Highlights of Consolidated Performance P&L Summary Compared with Oct. 31 FY2010 FY2011 YoY revised forecasts (Millions of yen) Results Results Amount % Amount % Net sales 165,253 166,657 1,404 0.8% 1,057 0.6% Cost of sales 33,321 33,461 140 0.4% -138 -0.4% Gross profit 131,932 133,196 1,263 1.0% 1,1
Slide 4: Analysis of Consolidated P&L Changes: Net Sales to Operating Income
Analysis of Consolidated P&L Changes Net Sales to Operating Income Compared with Oct. 31 FY2010 FY2011 YoY revised forecasts (Millions of yen) Results Results Amount % Amount % Net sales 165,253 166,657 1,404 0.8% 1,057 0.6% Cost of sales 33,321 33,461 140 0.4% -138 -0.4% Gross profit 131,932 133,19
Slide 5: Analysis of Consolidated P&L Changes: Operating Income to Net Income
Analysis of Consolidated P&L Changes Operating Income to Net Income Compared with Oct. 31 FY2010 FY2011 YoY revised forecasts (Millions of yen) Results Results Amount % Amount % Operating income 12,270 12,853 582 4.8% 453 3.7% Non-operating income 729 829 99 13.7% 29 3.7% Non-operating expenses 752
Slide 6: Factors Impacting Net Income
Factors Impacting Net Income (Millions of yen) Positive impact Negative impact +953 from 9,000 FY2010 8,000 -170 7,000 Due to staff increases at +169 +491 Due to 8,039 H2O PLUS Due to higher 6,000 7,086 +1,263 and elsewhere reduction in print media -276 Partly due to interest income -1,850 Due to gr
Slide 7: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis and Progress of Key Strategies 3. Forecasts for Fiscal 2012 4. Initiatives for Fiscal 2012 Onward 5. Acquisition of Jurlique International Pty Ltd 7
Slide 8: Operating Results by Segment
Operating Results by Segment Compared with Oct. 31 FY2010 FY2011 YoY revised forecasts (Millions of yen) Results Results Amount % Amount % Consolidated net sales 165,253 166,657 1,404 0.8% 1,057 0.6% Beauty care 153,091 154,778 1,686 1.1% 978 0.6% Real estate 3,102 3,089 -13 -0.4% -10 -0.4% Others 9
Slide 9: Beauty Care Segment Operating Results by Product Type
Beauty Care Segment Operating Results by Product Type FY2010 FY2011 YoY (Millions of yen) Results Results Amount % Net sales 153,091 154,778 1,686 1.1% Cosmetics 139,638 141,453 1,814 1.3% Fashion 13,453 13,324 -128 -1.0% Operating income 10,165 10,787 621 6.1% Cosmetics 10,618 11,192 574 5.4% Fashi
Slide 10: Beauty Care Segment Operating Results by Brand
Beauty Care Segment Operating Results by Brand FY2010 FY2011 YoY (Millions of yen) Results Results Amount % Net sales 153,091 154,778 1,686 1.1% POLA 96,543 97,353 810 0.8% ORBIS 49,356 47,918 -1,437 -2.9% H2O PLUS/Brands under development 7,192 9,506 2,314 32.2% Operating income 10,165 10,787 621 6
Slide 11: Real Estate and Others Segment Results
Real Estate and Others Segment Results FY2010 FY2011 YoY (Millions of yen) Results Results Amount % Real estate segment net sales 3,102 3,089 -13 -0.4% Operating income 1,304 1,283 -20 -1.6% ◆ Despite such hurdles as a drop in rents for new tenancy contracts, sales and operating income remained leve
Slide 12: Progress of Key Strategies During Fiscal 2011 (1)
Progress of Key Strategies During Fiscal 2011 (1) Strategy 1 － Generate stable profits with flagship brands ◆ Bolstered the flagship B.A series ⇒ B.A THE MASSAGE, B.A THE MASK and Christmas limited Products edition set ⇒ Launch of B.A RED (entry-level series) Door-to-door sales B.A THE MASK, launche
Slide 13: Progress of Key Strategies During Fiscal 2011 (1)
Progress of Key Strategies During Fiscal 2011 (1) Strategy 1 － Generate stable profits with flagship brands ◆ Renewal and strengthening of key series Products ⇒Renewal of AQUA FORCE and WHITENING ⇒Launch of EXCELLENT ENRICH series of strategic anti-aging products NEW AQUA FORCE, Sales launched in Ma
Slide 14: Progress of Key Strategies During Fiscal 2011 (2)
Progress of Key Strategies During Fiscal 2011 (2) Strategy 3 － Develop the Group’s presence overseas by capitalizing on the Group’s strengths Develop via existing brands ◆ China ⇒ Steady progress in preparing for development of door- to-door sales business ◆ Russia ⇒ Ongoing double-digit growth, net
Slide 15: Progress of Key Strategies During Fiscal 2011 (3)
Progress of Key Strategies During Fiscal 2011 (3) Strategy 4 － Reinforce R&D capabilities ◆ Development of innovative formulation technology and using the technology to develop new POLA products POLA ⇒ Launched B.A THE MASK in October CHEMICAL ◆ Cooperation with H2O PLUS to create projects harnessin
Slide 16: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis and Progress of Key Strategies 3. Forecasts for Fiscal 2012 4. Initiatives for Fiscal 2012 Onward 5. Acquisition of Jurlique International Pty Ltd 16
Slide 17: Forecasts for FY2012
Forecasts for FY2012 FY2012 YoY FY2012 YoY (Millions of yen) Full year Amount % First half Amount % Consolidated net sales 172,000 5,342 3.2% 82,200 3,262 4.1% Beauty care 160,200 5,421 3.5% 76,800 3,528 4.8% Real estate 2,900 -189 -6.1% 1,400 -152 -9.8% Others 8,900 109 1.2% 4,000 -113 -2.8% Operat
Slide 18: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis and Progress of Key Strategies 3. Forecasts for Fiscal 2012 4. Initiatives for Fiscal 2012 Onward 5. Acquisition of Jurlique International Pty Ltd 18
Slide 19: Cosmetics Market Trends in Japan
Cosmetics Market Trends in Japan (Billions of yen) Domestic cosmetics shipments Breakdown of skincare market by product function (skin lotions) 100% 1,500 80% 1,000 60% 40% 500 20% 0 0% st ca 1 4 9 0 2 3 5 6 7 8 0 0 0 0 0 0 0 0 0 0 0 1 7 8 9 0 re ca 1 20 20 20 20 20 20 20 20 20 20 20 0 0 0 1 re 1 fo
Slide 20: Overseas Cosmetics Market Trends
Overseas Cosmetics Market Trends Note: Data based on Scale of skincare markets in 2010, by region Company estimates Average annual growth projections for 2011–2013 (Billions of yen) Russia: 200 (+3－5%) North America: 1,000 (+0－1%) Japan: 1,400 Europe: 2,000 (+0－1%) (0%) China: 800 (+12－15%) South Ko
Slide 21: 2011–2013 Medium-term Management Plan
2011–2013 Medium-term Management Plan * CAGR: Compound Generate stable profits with ◆ Consolidated net sales ⇒ CAGR* of 2–3% annual growth rate flagship brands and invest funds ◆ Operating income ⇒ CAGR of 10% or higher to implement growth strategy ◆ Operating margin ⇒ 9% (10% in Japan) in 2013 Stra
Slide 22: Initiatives for Fiscal 2012 Onward (1)
Initiatives for Fiscal 2012 Oward (1) Strategy 1－Generate stable profits with flagship brands ◆ Strengthen the three major series: B.A, WHITISSIMO WHITE SHOT, and APEX-i ⇒ Launch a B.A summer series in April 2012 ◆ Continue to open PB stores (30 per year) and ensure stable sales growth at existing s
Slide 23: Initiatives for Fiscal 2012 Onward (2)
Initiatives for Fiscal 2012 Onward (2) Strategy 3－Develop the Group’s presence overseas by capitalizing on the Group’s strengths Expansion via existing brands ◆ China ⇒ Launch door-to-door sales business (planned for spring 2012) ◆ Other ⇒ Ensure stable growth with improved profitability in each cou
Slide 24: Initiatives for Fiscal 2012 Onward (2)-2: H2O PLUS earnings
Initiatives for Fiscal 2012 Onward (2)-2 H2O PLUS earnings (Millions of yen) 1$=¥78.95 Net sales (Millions of yen) Operating income 5,000 300 Plan Plan 4,000 190 200 4,000 100 3,000 0 2,000 -100 1,000 -200 0 -300 2009 2010 2011 2012 (plan) 2009 2010 2011 2012 (plan) Note: Figures for 2011 and 2012 (
Slide 25: Initiatives for Fiscal 2012 Onward (3)
Initiatives for Fiscal 2012 Onward (3) Strategy 4－Reinforce R&D capabilities ◆ Steadily shift the development of anti-aging and whitening POLA skincare ingredients to the next phase CHEMICAL ◆ Further evolve the OIL-CUT (oil-free) concept and formula INDUSTRIES ⇒ Introduce the concept and formula wh
Slide 26: Shareholder Return and Basic Dividend Policy
Shareholder Return and Basic Dividend Policy Basic dividend policy Fiscal 2012 • A stable dividend of ¥40.00 per Increase ¥5.00 per share as planned, share factoring in the forecast for operating • Dividend increases considered income growth, as well as the impact of according to level of profit gro
Slide 27: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis and Progress of Key Strategies 3. Forecasts for Fiscal 2012 4. Initiatives for Fiscal 2012 Onward 5. Acquisition of Jurlique International Pty Ltd 6. Questions and Answers 27
Slide 28: Acquisition of Jurlique
Acquisition of Jurlique Acquisition of all outstanding shares in Acquisition POLA ORBIS HOLDINGS Jurlique from investment funds and individual method investors Share acquisition cost ⇒ AUD278 mil. Special purpose 100% Acquisition Assumption of liabilities, etc. ⇒ AUD57 mil. company (SPC) cost Miscel
Slide 29: Purpose of the Acquisition
Purpose of the Acquisition Vision for 2020: Become a highly profitable global company Net sales: ¥250.0 billion or more Overseas sales ratio: 20% or more Operating margin: Top level in the industry (13–15%) Domestic: Domestic and overseas: Overseas: Achieve stable growth in Accelerate growth through
Slide 30: Brand Portfolio
Brand Portfolio Overseas Flagship Brands under brands brands development High prestige New (ACRO INC.) Prestige Price Middle-tier Mass-market Market size 30
Slide 31: Company Outline and History
Company Outline and History Company name: Jurlique International Pty Ltd Foundation: 1985 Capital: AUD72,389 thousand (as of June 26, 2011) Location: Mount Barker, State of South Australia, Australia Outline (Head office in suburban Adelaide) Details of business: Selling cosmetics in 20 countries, u
Slide 32: Management Structure
Management Structure President & CEO: Sam McKay Background Born in Australia. Joined the company six years ago. In charge of Jurlique’s Australian, Asian and Duty-free store (DFS) businesses. Previously engaged in management and marketing strategy for an CFO: Rob Gratton entertainment group. Backgro
Slide 33: Jurlique Brand Concept and Product Lineup
Jurlique Brand Concept and Product Lineup Nature. Science. Innovation. We constantly focus on leveraging the nature’s abundance. We believe that there is nothing better than the power of Brand nature, and we harness that power to produce luxurious products. concept We continue to search the world fo
Slide 34: Sales Breakdown by Country and Channel
Sales Breakdown by Country and Channel Fiscal year ended June 2011 (Actual) Fiscal year ending June 2012 (Forecast) Other その他 Other その他 Japan 日本 Japan 日本 豪州 Australia Australia 豪州 Sales breakdown by DFS 免税店 DFS 免税店 country U.S.A. 米国 U.S.A. 米国 Strong sales in China 中国・香港and H.K. 27％ China/Hong Kong,
Slide 35: Synergistic Effects
Synergistic Effects POLA ORBIS Group R&D Manufacturing Marketing/Sales ◆ 13 million sets of skin data ◆ Direct consulting ◆ Material development capabilities in ⇒ Consulting whitening and anti-aging skincare ⇒ Marketing capability based on customer information 1. R&D phase 2. Sales/Distribution phas
Slide 36: Earnings and Impact on Consolidated Performance
Earnings and Impact on Consolidated Performance Jurlique Earnings (Millions of yen) (Millions of yen) AUD1 = ¥80.00 Net sales Plan AUD1 = ¥80.00 Operating income 11,040 12,000 Plan 10,000 1,500 1,440 8,000 1,000 6,000 4,000 500 2,000 0 0 FY ended FY ended CY2011 CY2012 FY ended FY ended CY2011 CY201
Slide 37: Steps Toward Achieving Our Long-term Vision
Steps Toward Achieving Our Long-term Vision Management Indicators Corporate Philosophy Net sales: ¥250.0 billion or more “Inspire all people and Overseas sales ratio: 20% or more touch their hearts” Operating margin: Top level in the industry (13–15%) (Billions of yen) Overseas sales ratio: Overseas
Slide 38: Reference Materials
Reference Materials Regarding revisions to reference figures in “Fiscal 2010 Results and Medium-term Management Plan for FY2011–FY2013,” P. 11 (February 15, 2011, in Japanese only) Owing to a change in segments from fiscal 2011 onward, materials for the fiscal 2010 results briefing held in February