Pola Orbis Holdings Inc. · TSE:4927
Pola Orbis — FY2014 Earnings Presentation
32 slides from Pola Orbis's earnings presentation, 2015
Slide 1: Fiscal 2014 Supplementary Material
Fiscal 2014 Supplementary Material POLA ORBIS HOLDINGS INC. President Satoshi Suzuki 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 materially from these pro
Slide 2: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Progress of the Mid-term Management Plan 4. Forecasts and Initiatives for Fiscal 2015 5. Overseas Strategy and Capital Policy 6. Appendix 2
Slide 3: FY2014 Key Topics
FY2014 Key Topics Cosmetic Market In Japan, the reaction to the surge in demand before the tax hike cooled down in the fall. Then, the actual impact of the tax hike kicked in and weakened consumer sentiment mostly in the prestige segment. Unit price stopped declining in 2013, but it started to d
Slide 4: Analysis of Consolidated P&L Changes: Net Sales to Operating Income
Analysis of Consolidated P&L Changes Net Sales to Operating Income FY2013 FY2014 YoY (mil. yen) Results Results Amount % Consolidated net sales 191,355 198,094 6,738 3.5% Cost of sales 38,655 39,326 671 1.7% Gross profit 152,700 158,767 6,067 4.0% SG&A* expenses 136,682 141,083 4,401 3.2% Operating
Slide 5: Analysis of Consolidated P&L Changes: Operating Income to Net Income
Analysis of Consolidated P&L Changes Operating Income to Net Income FY2013 FY2014 YoY (mil. yen) Results Results Amount % Operating income 16,017 17,683 1,665 10.4% Non-operating income 1,972 1,684 (288) (14.6%) Non-operating expenses 154 301 146 94.8% Ordinary income 17,836 19,067 1,231 6.9% Extrao
Slide 6: Factors Impacting Net Income
Factors Impacting Net Income ORBIS performed well throughout the year and realized huge increase in gross profit. In spite of the impairment loss at H2O PLUS, the Group achieved significant increase in net income due to the sales of property and decrease in tax expense. （mil. yen） Positive impact Ne
Slide 7: Segment Analysis
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Progress of the Mid-term Management Plan 4. Forecasts and Initiatives for Fiscal 2015 5. Overseas Strategy and Capital Policy 6. Appendix 7
Slide 8: Segment Results
Segment Results FY2013 FY2014 YoY (mil. yen) Results Results Amount % Consolidated net sales 191,355 198,094 6,738 3.5% Beauty care 178,306 184,475 6,168 3.5% Real estate 3,035 3,179 143 4.7% Others 10,013 10,440 427 4.3% Operating income 16,017 17,683 1,665 10.4% Beauty care 14,780 16,535 1,755 11.
Slide 9: Beauty Care Business Results by Brands
Beauty Care Business 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%) Brands under developme
Slide 10: Brand Analysis (1)
Brand Analysis (1) FY2014 Quarter topics Sales was down due to the negative impact of the tax RED B.A launched on hike on the consumer sentiment in the prestige segment. October received Rural areas and customers in their 30s and 40s became Best Cosmetics Awards cost conscious and saved up. on
Slide 11: Brand Analysis (2)
Brand Analysis (2) FY2014 Quarter topics It was a great year for ORBIS. ORBIS=U launched in Kicked off the new sales the beginning of the year was a huge hit, and new promotion system (point customer acquisition through social media before and system) to realize one-to-one after the tax hike wer
Slide 12: Brand Analysis (3)
Brand Analysis (3) FY2014 Quarter topics In spite of the tough market environment, the brand Gift box items for achieved 5% growth yoy in the same-store sales in the holiday season Chinese department stores by launching new products sold well. and reinforcing CRM. Sales was up by 18% yoy on lo
Slide 13: Brand Analysis (4)
Brand Analysis (4) FY2014 Quarter topics Sales was down significantly due to the sluggish sales in China and decrease in number of sales channels in Marine Defense Green Tea Antioxidant the US due to the change in the distribution strategy. Toner was chosen as Editor’s Pick Best Sales was down
Slide 14: Brand Analysis (5) Brands Under Development
Brand Analysis (5) Brands Under Development FY2014 Quarter topics THREE and decencia performed strongly throughout decencia launched AYANASU AS Eye Cream the year. on October 1st. New store openings and new product launches were ¥4,500 (tax excluded) the key drivers for THREE. decencia incre
Slide 15: Progress of the Mid-term Management Plan
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Progress of the Mid-term Management Plan 4. Forecasts and Initiatives for Fiscal 2015 5. Overseas Strategy and Capital Policy 6. Appendix 15
Slide 16: Progress of the 2014 - 2016 Mid-term Management Plan
Progress of the 2014 - 2016 Mid-term Management Plan The Group is on track for FY2016 targets on the whole. Management indicators Targets for Evaluation Progress FY2014 to FY2016 ORBIS achieved excellent results from its brand rebuilding Consolidated process, and entered into the new growth phase
Slide 17: Forecasts and Initiatives for Fiscal 2015
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Progress of the Mid-term Management Plan 4. Forecasts and Initiatives for Fiscal 2015 5. Overseas Strategy and Capital Policy 6. Appendix 17
Slide 18: Forecasts for FY2015
Forecasts for FY2015 Aim 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% 207,500 9,405 4.7% 99,700 3,759 3.9% Beauty care 184,475 6,168 3.5
Slide 19: Cosmetic Market Outlook
Cosmetic Market Outlook In Japan, along with the aging of population, demand for anti-aging products are expected to expand further. Asian markets where the Group focuses on, are expected to continue achieving high level of growth. FY2014 FY2015 Onward Japan Surge in demand before the tax hike and
Slide 20: Initiatives for FY2015 Onward (1)
Initiatives for FY2015 Onward (1) Realizing 2014 - 2016 Medium-term Management Plan Sustain stable growth of flagship brands to lead Group earnings Promote repeat purchases to Move forward to the business expansion phase improve annual purchase per customer. from the structural reform phase. Renew
Slide 21: Initiatives for FY2015 Onward (2)
Initiatives for FY2015 Onward (2) Realizing 2014 - 2016 Medium-term Management Plan Overseas brands contributing to profitability through high sales growth From FY2015, Jurlique aims to contribute to the Group’s profitability. Continue to achieve the same-store sales growth in China by launching
Slide 22: Key agenda for FY2015
Key agenda for FY2015 POLA: Increase annual purchase per customer Jurlique: Start contributing to the Group’s profit H2O PLUS: Revitalize its brand and business 22
Slide 23: Overseas Strategy and Capital Policy
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Progress of the Mid-term Management Plan 4. Forecasts and Initiatives for Fiscal 2015 5. Overseas Strategy and Capital Policy 6. Appendix 23
Slide 24: Overseas Business Strategy
Overseas Business Strategy Initiatives for FY2015 Onward Operate through sales channels that are suited for each brand’s image and target, with China focus on profitability. Coastal cities: Jurlique and POLA: Improve efficiency of existing stores. Department stores and H2O PLUS: Decrease opera
Slide 25: H2O PLUS: Future Initiatives
H2O PLUS: Future Initiatives Strategy Issue Initiatives for FY2015 Onward Overall Brand Behind on new product Launch new products infused with the Group’s R&D launches Product Offers bath and body care strengths Shift its focus on skincare products products Different by regions Standardi
Slide 26: Initiatives to improve capital efficiency and shareholder return
Initiatives to improve capital efficiency and shareholder return Initiatives to improve capital efficiency ROE 10% Operating income CAGR15% EPS Achieve net income growth 8% (Earnings per share) which is higher than operating 5.9% 5.8% ROE 8% = income growth 6% 5.2% 4.2% 4.3% in FY2016 Improve
Slide 27: Appendix
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Progress of the Mid-term Management Plan 4. Forecasts and Initiatives for Fiscal 2015 5. Overseas Strategy and Capital Policy 6. Appendix 27
Slide 28: Appendix: New Product Launches in FY2015 Q1
Appendix: New Product Launches in FY2015 Q1 Skin Whitening Products Acne treatment Products launched on February 5th planned to launch on March 24th White Shot CX Clear Wash (quasi-pharmaceutical products) (quasi-pharmaceutical products) Regular size 25mL 120g ¥15,000 (tax excluded) ¥1,300 (tax excl
Slide 29: 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 30: 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 31: 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 32: 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