Pola Orbis Holdings Inc. · TSE:4927
Pola Orbis — Q1 2015 Earnings Presentation
24 slides from Pola Orbis's earnings presentation, 2015
Slide 1: First Quarter of Fiscal 2015 Supplementary Material
First Quarter of Fiscal 2015 Supplementary Material POLA ORBIS HOLDINGS INC. Director and Vice President Management Planning, Accounting and Global Business Strategy Naoki Kume This report contains projections of performance and other projections based on information currently available and certain
Slide 2: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts and Initiatives for Fiscal 2015 4. Appendix 1
Slide 3: Q1 Key Topics
Q1 Key Topics Cosmetic Market Japanese cosmetic market in FY2015Q1 received negative impact from surge in demand prior to the tax hike in the same quarter last year. Thanks to demand from inbound tourists and Chinese New Year travelers, department stores in urban areas in Japan performed well*.
Slide 4: Analysis of Consolidated P&L Changes: Net Sales to Operating Income
Analysis of Consolidated P&L Changes Net Sales to Operating Income FY2014 FY2015 YoY Vs. FY2013Q1 (mil. yen) Q1 Result Q1 Result Amount % Amount % Consolidated net sales 50,213 45,392 (4,820) (9.6%) 4,154 10.1% Cost of sales 9,666 8,703 (962) (10.0%) 572 7.0% Gross profit 40,547 36,689 (3,858) (9.5%
Slide 5: Analysis of Consolidated P&L Changes: Operating Income to Net Income
Analysis of Consolidated P&L Changes Operating Income to Net Income FY2014 FY2015 YoY vs. FY2013Q1 (mil. yen) Q1 Result Q1 Result Amount % Amount % Operating income 5,453 2,909 (2,544) (46.6%) 1,308 81.7% Non-operating income 151 195 44 29.4% (368) (65.3%) Non-operating expenses 444 58 (386) (86.8%)
Slide 6: Factors Impacting Net Income
Factors Impacting Net Income Gross profit significantly decreased due to the impact from surge in demand in the same quarter last year. On the other hand, net income only decreased by 1% as a result of fewer sales commission expense and tax expense. (mil. yen) Positive impact Negative impact 6,000 6
Slide 7: Agenda: Segment Analysis
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts and Initiatives for Fiscal 2015 4. Appendix 6
Slide 8: Segment Results
Segment Results FY2014 FY2015 YoY vs. FY2013Q1 (mil. yen) Q1 Result Q1 Result Amount % Amount % Consolidated net sales 50,213 45,392 (4,820) (9.6%) 4,154 10.1% Beauty care 47,110 42,268 (4,841) (10.3%) 3,709 9.6% Real estate 762 728 (33) (4.5%) 9 1.3% Others 2,341 2,395 54 2.3% 435 22.2% Operating i
Slide 9: Beauty Care Business Results by Brands
Beauty Care Business Results by Brands FY2014 FY2015 YoY vs. FY2013Q1 (mil. yen) Q1 Result Q1 Result Amount % Amount % Beauty care net sales 47,110 42,268 (4,841) (10.3%) 3,709 9.6% POLA 26,412 22,092 (4,319) (16.4%) 600 2.8% ORBIS 13,274 12,550 (724) (5.5%) 1,650 15.1% Jurlique 3,702 3,967 264 7.1%
Slide 10: Brand Analysis (1)
Brand Analysis (1) Q1 Result Quarter topics Sales was down YoY due to surge in demand in WHITE SHOT series launched FY2014Q1, but new skin-whitening products have been in February has been big hits. successful. Received “Best of Best” Award” Operating income was down YoY due to fewer gross a
Slide 11: Brand Analysis (2)
Brand Analysis (2) Q1 Result Quarter topics Sales were down YoY due to surge in demand in In March, CLEAR, acne treatment FY2014Q1 and launch of ORBIS=U series in February series infused with IFSCC* grand prix 2014. award winning knowledge and Operating income was down YoY due to fewer gross d
Slide 12: Brand Analysis (3)
Brand Analysis (3) Q1 Result Quarter topics On the whole, sales was up 5% YoY on AUD basis. Launched new Oil and moose Same store sales trend was down 5% due to the impact cleansing products manufactured of the new skin-whitening products launched in March with over 95% natural ingredients. 20
Slide 13: Brand Analysis (4)
Brand Analysis (4) Q1 Result Quarter topics Sales was down 33% YoY on USD basis. Launched HIGH-SPEED Withdrawal of underperforming stores in China and FOAMING HYDRATION+. fewer sales channel in North America caused weaker sales. Operating income was down YoY due to decrease in gross profit.
Slide 14: Brand Analysis (5) Brands Under Development
Brand Analysis (5) Brands Under Development Q1 Result Quarter topics THREE and decencia continued to perform strongly THREE launched “Balancing White and contributed to the brands under development Clear Essence”, skin-whitening product category growth. made with 95% natural ingredients THREE’
Slide 15: Agenda: Forecasts and Initiatives for Fiscal 2015
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts and Initiatives for Fiscal 2015 4. Appendix 14
Slide 16: Forecasts for FY2015 (No change)
Forecasts for FY2015 (No change) Progress is in-line with the initial forecast. Aiming to achieve increase in sales and operating income for the 6th consecutive year. FY2014 YoY FY2015 YoY FY2015 YoY (mil. yen) Results Amount % Full Year Amount % H1 Amount % Consol. net sales 198,094 6,738 3.5% 207,
Slide 17: Progress and Forecasts of the Key Agenda
Progress and Forecasts of the Key Agenda Increase annual purchase per customer Launch new products and service to increase purchase per customer. • Purchase per customer was down due to surge in demand in the same quarter last year, but new products, such as WHITE SHOT has been successful and POLA’s
Slide 18: Other Topics
Other Topics Prospective Inbound demand in Japanese Cosmetic Market The impact to the consolidated sales is limited (approx. 0.5% of the sales) but, each brand is capturing some inbound demand. WHITE SHOT series, especially INNER ROCK IX The brand is gaining popularity in urban department stores, (s
Slide 19: Agenda: Appendix
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts and Initiatives for Fiscal 2015 4. Appendix 18
Slide 20: Appendix: About POLA ORBIS Group
Appendix: About POLA ORBIS Group Beauty care is the core business of the Group, and 9 different cosmetic brands are operated under the Group umbrella. FY2014 Consol. Net Sales ¥198.1 bil. Overseas Overseas Flagship Flagship Brandsunder Brands under Brands Brands Brands Brands development development
Slide 21: Appendix: Beauty Care Business Brand Portfolio
Appendix: Beauty Care Business Brand Portfolio Sales Brand Concept and products Price Sales channel ratio* Consignment sales through POLA LADIES： High-prestige skincare Approx. POLA THE BEAUTY (PB), 54% Leading-edge technology in anti- ¥10,000 Esthe-inn and conventional door-to-door aging and
Slide 22: Appendix: Beauty Care Business FY2014 Results by Brands
Appendix: Beauty Care Business FY2014 Results by Brands FY2013 FY2014 YoY (mil. yen) Results Results Amount % Beauty care net sales 178,306 184,475 6,168 3.5% POLA 100,740 99,571 (1,168) (1.2%) ORBIS 48,163 52,302 4,139 8.6% Jurlique 14,810 17,600 2,789 18.8% H2O PLUS 5,488 4,876 (611) (11.1%) Brand
Slide 23: Appendix: Long-term Vision
Appendix: Long-term Vision Corporate Philosophy STAGE3 “Inspire all people and touch their hearts” 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%
Slide 24: Appendix: 2014–2016 Medium-term Management Plan
Appendix: 2014–2016 Medium-term Management Plan The 2nd stage of the long-term vision for 2020 Aim to enhance the enterprise value by further strengthening domestic earnings structure, accelerating overseas expansion, and improving capital efficiency. Consolidated net sales Capital efficiency Cons