Unicharm Corporation · TSE:8113
Unicharm — Investor Presentation (April 2012)
54 slides from Unicharm's investor presentation, Apr 27, 2012
Slide 1: Unicharm Presentation Materials for Investor's Meeting
Unicharm Presentation Materials for Investor’s Meeting April 27, 2012 Unicharm Corporation Takahisa Takahara President and CEO Forecasts included in this Presentation are based on assumptions, prospects and plans as of April 27, 2012. Actual results may differ significantly from these forecasts due
Slide 2: Table of Contents
Table of Contents 1. Financial Performance Review: Fiscal Year Ended March 31, 2012 P3 2. Operating Environment Review: Fiscal Year Ended March 31, 2012 P15 3. Operational Results Forecasts for Year Ending March 31, 2013 P21 4. Overview: Corporate Strategy P26 5. Shareholder Return Policy for Year E
Slide 3: 1. Financial Performance Review: Fiscal Year Ended March 31, 2012
1. Financial Performance Review: Fiscal Year Ended March 31, 2012 Copyright (c) 2012 Unicharm Corporation. All rights reserved.
Slide 4: Compared to previous year
Compared to same period last year, sales and operating profits achieved all-time high - up 13.6% and 11.5% respectively Compared to previous year (in million yen) Increase Fiscal Year Ended Fiscal Year ended Increase (decrease) Assessment March 31, 2011 March 31, 2012 (decrease) (%) Net sales 376,94
Slide 5: Change in Operating Income
Profits up by ¥5.3bn backed by improved profitability, product mix and productivity offsetting cost increase in raw material, goodwill and sales promotion Change in Operating Income to Increase Increase in gross gross profit to sales of in profit due sales increase of ¥¥51.4 due increase 51.4 billio
Slide 6: Geographical Segment Information
Sales and Profit largely increase in Asia Geographical Segment Information (in million yen) Europe, Elimination/ Japan Asia Middle East Total Consolidated Corporate and other Fiscal Year Ended March 31, 2011 Net sales 219,064 118,423 39,460 376,947 ‐ 376,947 Operating income 25,367 18,354 2,932 46,6
Slide 7: Operating margin by Geographical Segment
Asia continue to grow in profitability. Due to increase of raw material costs, consolidated operating margin was 12.1% Operating margin by Geographical Segment 20.0% 15.5% 15.1% 15.0% 14.0% 12.4% 13.3% 12.4% 12.8% 12.2% 11.5% 11.0%11.7% 10.6% 10.5% 12.6% 12.1% 9.9% 11.6% 10.0% 9.9% 10.0% 7.4% 7.2% 8
Slide 8: Business Segment Information
Personal Care business showed strong growth; Pet Care grew in sales but profits dipped due to goodwill costs Business Segment Information (in million yen) Personal Elimination/ Pet Care Others Total Consolidated Care Corporate Fiscal Year Ended March 31, 2011 Net sales 322,994 47,767 6,186 376,947 －
Slide 9: Change in Domestic and Overseas Net Sales
Boosted by growth in Asia, sales contribution of overseas business reached an all-time high of 46.9% Change in Domestic and Overseas Net Sales (in million yen) 46.9% 50% 470,000 42.4% 430,000 38.5% 36.9% 37.1% 40% 390,000 33.9% 350,000 31.4% 310,000 26.9% 30% 270,000 21.5% 23.0% 230,000 20% 190,000
Slide 10: Increases/Decreases in Consolidated SG&A Expenses
Sales promotion expenses and freight charges increased due to strengthened marketing activities and expansion of sales areas Increases/Decreases in Consolidated Selling, General (in million yen) and Administrative Expenses Fiscal Year Ended Fiscal Year Ended March 31, 2011 March 31, 2012 Increase Ra
Slide 11: Increase (Decrease) in Non-Operating Income (Expenses)
Foreign exchange losses incurred due to appraisal of foreign-dynamited loans Increase (Decrease) in Non-Operating Income (Expenses) (Consolidated) (in million yen) Fiscal Year Fiscal Year Ended March Ended March Increase Major causes 31, 2011 31, 2012 (Decrease) Amount Amount Non-operating revenues
Slide 12: Increase (Decrease) in Extraordinary Income (Loss)
Recorded structural improvement expenses for an Australian subsidiary and the Feminine Care Business in Japan Increase (Decrease) in Extraordinary Income (Loss) (consolidated) (in million yen) Fiscal Year Ended Fiscal Year Ended Increase March 31, 2011 March 31, 2012 (decrease) Major causes Amount A
Slide 13: Increase/Decrease on Balance Sheet: Assets
Goodwill increased as a result of M&As Deferred tax assets decreased due to the revision in the Corporate Tax Act (in million yen) Increase/Decrease on Balance Sheet ….. Assets As of’March 1 1 / 331, 月 2011 期 As’ of 1 2March / 3 月31, 期 2012 Increase Account 増 減 (decrease) 科 目 金 額 Amount 構成比 Percenta
Slide 14: Increase/Decrease on Balance Sheet: Liabilities/Net Assets
Accelerated repayments of long-term loans Acquired treasury stocks of ¥9 billion Increase/Decrease on Balance Sheet … Liabilities/Net Assets (in million yen) As of ’March 11/ 11 / 3 月期 31, 2011 As of’ March 12/ 12 / 3 月期 31, 2012 Increase 増 減 (decrease) 科 目 Account 金 Amount 額 構成比 Percentage 金 Amount
Slide 15: 2. Operating Environment Review: Fiscal Year Ended March 31, 2012
2. Operating Environment Review: Fiscal Year Ended March 31, 2012 Copyright (c) 2012 Unicharm Corporation. All rights reserved.
Slide 16: Chart of Naphtha/Pulp Price
Recent Naphtha prices continue to be on an upward trend, while pulp prices have changed to a downward trend Chart of Naphtha/Pulp Price (US$/ton) 1200 900 600 300 0 '0 0 12 '1 0 12 '1 0 12 4 6 '0 8 2 4 6 '1 8 2 4 6 '1 /8 2 9/ 9/ 9/ 0/ 1 0/ 0/ 0/ 1 1/ 1/ 1/ 1 2/ 1 9/ 9/ 0/ 0/ 1/ 1/ '0 '0 '0 '1 '1 '1
Slide 17: Increase/Decrease of Raw Material Costs from Previous Year
Raw material prices continued to rise; procurement costs increased by ¥7.2 billion. Procurement costs are expected to increase by ¥1.2 billion in fiscal 2012. Increase/Decrease of Raw Material Costs from Previous Year (in billion yen) +1.2 +7.2 +8.0 +5.6 +3.2 +3.0 (9.3) '07/3 '08/3 '09/3 '10/3 '11/3
Slide 18: Impact of Exchange Rate Fluctuations
All currencies except for AUD suffered from Yen hike, denting sales by ¥9.8bn and operating profits by ¥1.3bn Impact of Exchange Rate Fluctuations (Fiscal Year Ended March 31, 2012) compared with the same period last year) Operating Net sales Previous Year Current Year Change in Income (in million y
Slide 19: Disposable diaper - Changes in shop price per piece
Shop prices of disposable diapers in Asian countries have remained almost unchanged, while in Japan they remained flat after dropping. Disposable diaper - Changes in shop price per piece (Average of all manufacturers) China Thailand 1.4 (RMB) 12 (Baht) 1.3 11 1.2 10 1.1 9 1 8 0.9 7 0.8 6 10 11 12 10
Slide 20: Sanitary pads - Changes in shop price per piece
In Thailand and Indonesia, the shop prices of female sanitary products were stable, while they continued to increase in China through the introduction of value-added products. Sanitary pads - Changes in shop price per piece (Average of all manufacturers) China Thailand 0.48 (RMB) 2.8 (Baht) 0.46 2.6
Slide 21: 3. Operational Results Forecasts for Year Ending March 31, 2013
3. Operational Results Forecasts for Year Ending March 31, 2013 Copyright (c) 2012 Unicharm Corporation. All rights reserved.
Slide 22: Operational Results Forecasts for Year Ending March 31, 2013
Sales and operating profits expected to reach all-time high Operational Results Forecasts for Year Ending March 31, 2013 (in million yen) Forecasts for Year Increase Year Ended Mar 2012 Ending Mar 2013 Difference (Decrease) (%) Net sales 428,391 490,000 61,609 14.4％ Operating income 51,900 12.1％ 56,
Slide 23: Change in Operating Income forecast
Operating income is expected to increase by ¥4.6 billion, backed by an increase in gross margin due to sales growth and improved product mix and productivity, which will offset increases in marketing expenses and freight charges. Change in Operating Income Increase Increase in in gross to gross prof
Slide 24: EPS Movement
EPS decreased in fiscal 2011 due to the impact of the revised taxation system (about ¥13.2 billion). EPS for fiscal 2012 is expected to be ¥171.91. EPS Movement (Yen) 200.00 178.11 180.00 171.91 160.00 144.95 140.00 128.56 120.00 100.00 86.46 89.44 80.09 81.42 76.45 77.44 80.00 59.10 61.76 60.00 50.
Slide 25: Changes in Cash Flow
Cash flow was actively used for sustainable business growth Changes in Cash Flow (in billion yen) 50.6 43.0 45.4 41.6 40 34.1 36.7 29.2 27.8 29.3 30.4 25.7 23.3 20 15.3 16.8 13.8 13.1 8.3 7.5 3.8 3.3 0 '03/3 '04/3 '05/3 '06/3 '07/3 '08/3 '09/3 '10/3 '11/3 '12/3 '13/3E Cash flow Free cash flow C o n
Slide 26: 4. Overview: Corporate Strategy
4. Overview: Corporate Strategy Copyright (c) 2012 Unicharm Corporation. All rights reserved.
Slide 27: Baby Care in Japan: double-brand strategy
Share upped +1.6% despite fierce competition in domestic baby care business; continue to grow with mainstay Moony and MamyPoko Recent state of Baby Care Business in Japan Vitalize the market by double-brand strategy In 2011, the Mamy Poko brand was After the earthquake, consumers place more renewed
Slide 28: Health Care business in Japan
Market share at Healthcare business grew to 48.3%; continue to increase dominance across channels Recent state of Health Care Business <Unicharm share in Japanese Health Care market> （%） in Japan Unicharm 44.6%→48.3% Strengthen the product lineup to match customers' activities of daily living (ADL)
Slide 29: Changes in population of over 65 in Asian countries
Elderly population in Asia will double in 20 years; in future, deploying senior care practice of Japan to other countries in Asia Changes in population of over 65 Introduce the Japanese care in Asian countries model to overseas markets. (in million persons) 2010 2030 Entire Asia 279 → 524 2.0x China
Slide 30: China baby care market share growth
China continues to show strong growth; now a No.2 baby care maker with 17.7% share, China contributes 10% of group sales In addition to the standard type, economy type disposable diapers were introduced to promote serious exploration of the volume zone The gap between the top seller has shrunk every
Slide 31: Expanding market areas and channels in China
Expand market areas and distribution channels in tandem with growth in demand from middle-income families in inland China As of the end of 2011, the number of Chinese cities in which Unicharm has business increased to 620.The expansion will be further accelerated In addition to sales in large stores
Slide 32: Increase production sites in China
Increase production sites in China to realize an effective supply chain Under the policy of proximity of production to the market, we will increase production sites in line with the expansion in sales areas The fourth plant in China will be constructed in Tianjin to realize a stable and efficient su
Slide 33: Strengthen leadership in Chinese subsidiaries
By allocating authority and talent, empower China office in order to better respond to fast developing Chinese market Strengthen the leadership in Restructure Chinese Chinese subsidiaries subsidiaries Dispatch experienced senior employees Concurrently with the addition of from head office in Japan t
Slide 34: Indonesia: accelerate penetration across archipelago
In Indonesia accelerate penetration across archipelago in order to strengthen its already No.1 position In Indonesia, Unicharm has the greatest market share both in the Baby Care and the Feminine Care businesses. The shares are still increasing Sales and supply to Eastern Java and Northern Sumatra w
Slide 35: Vietnam: acquisition of Diana
Paving the way for dominance in ASEAN through leveraging - through acquisition of Diana, gained No.2 position in Vietnam In September 2011, we completed the acquisition of Diana, the second largest sanitary product manufacturer in Vietnam In Hanoi where head office is located, Diana has the greatest
Slide 36: Product supply to Mekong subregion
Improve leadership position in greater Mekong subregion by boosting supplies from Thailand and Vietnam Strengthen product supply from Thailand and Vietnam to Myanmar, Laos and Cambodia While paying attention to the future movement in the economic environments and systems, we will also consider suppl
Slide 37: India market share growth
2 years after entering India market, market share grew to 12.4% (as of February 2012) - strengthen market position with newly launched feminine care products Changes in Baby Care market shares in July 2011 Started the Feminine Care India (moving average for 6 months) Business in India （%） Competitor
Slide 38: Expand geographic coverage within India
Expand geographic coverage within India with its unique pant-type diapers As of the end of 2011, the number of cities where Unicharm has business had increased to 366 In addition to the northern part, we have also expanded into more cities in the southern, eastern and western parts of India We will
Slide 39: Direct investment in Egypt and MENA market
Direct investment in Egypt will provide access to medium/long-term business opportunity in MENA despite current social unrest MENA area market size Egypt plant scheduled to open in FY2012. The absorbent core market grew at an annual Although the political situation is unstable due rate of 8.1%. The
Slide 40: MENA channel development and women employment
Bring in experts from Japan to accelerate channel development; promote women in workforce as an example for the government Strengthen the channel development ability Initiative to employ women In the MENA area, the development level of Implement an initiative to employ local retail businesses varies
Slide 41: Feminine Care Business in Japan
The Feminine Care Business in Japan increased its market share, expanding in the high value-added product category while the overall market continued to shrink; operating income ratio also improved. UC Feminine Care Business UC Feminine Care Business share in Japan operating results in Japan The mar
Slide 42: Overseas feminine care by market stage
For feminine care products in overseas, leverage Japan's expertise to tailor product offerings according to each market's development stage Early Stage Growth Stage Mature Stage Value proposition subcategorized in Japan Skin care Night use Adapting to advancement in the needs of the growing stage ma
Slide 43: Pet care market and Hartz acquisition
Hartz acquisition completed and now ready to grow in the U.S., the world's largest pet care market Pet care market size by country Double the business size in the and percentages United States. (The market size is for 2008.) Percentage of the Hartz Mountain Corporation has the largest share in globa
Slide 44: Pet care in Japan and China
Strengthen No.1 position in Japan; intends to accelerate globalization after building a leadership position in Japan, USA and China For further growth in the Japanese market Expand business areas in the Chinese market Improvement in the declining trend in the Share in Shanghai (entered in 2010) is n
Slide 45: Pet foods and toiletry segments in Japan
In Japan where general market conditions are weak, we will achieve both market creation and the business growth by developing new segments Foods segment Toiletry segment Identify growing segments, and develop and In the dog toilet sheet segment (largest segment), introduce products for those segment
Slide 46: Acquisition of Paperlet
Acquisition of Paperlet in February boosted leadership position in the pet litter segment Outline of Peparlet CO.Ltd Outline of the acquisition The first company in the world to develop paper litter for Unicharm acquired certain shares from the Otsuguro cat toilet (Established in 1975, headquarters
Slide 47: Optimally allocating production sites across the world
Optimally allocating production sites across the world to be ready when the demand arise Egypt China A new plant will open in The 4th plant in China will 2012 open in Tianjin in 2012 X Japan The Ozu Plant will be closed and its operation will be India transferred to another The 2nd plant in India wi
Slide 48: Local Management Unit business model
Allocate power and talent to boost China operation, and entrust with innovation - business model to grow India and ASEAN in the future Local Management Unit (LMU) Finding local needs Local activities for innovation creation India Faster product development Faster management decisions Cooperation wit
Slide 49: Recognition: Japan's Best Global Brands and corporate power
Ranked 26th in Japan's Best Global Brands and 9th in Comprehensive Competitiveness - one of the highly recognized companies of Japan Comprehensive Corporate Power Japan’s Best Global Brand 2012 (Interbrand) (Nihon Keizai Shinbun) Rank Company Points 1 NTT DoCoMo 939pt 2 Takeda 922pt Pharmaceutical 3
Slide 50: 5. Shareholder Return Policy for Year Ending March 31, 2013
5. Shareholder Return Policy for Year Ending March 31, 2013 Copyright (c) 2012 Unicharm Corporation. All rights reserved.
Slide 51: Changes in Dividends
Planned dividend for FY13/3 is ¥34, ¥2 increase from FY12/3, achieving 11th consecutive year of dividend raise Changes in Dividends (Yen) 40 35 34 32 30 28 25 23 20 18 15 15 15 10 11 10 8 8 9 6 7 5 0 '0 0 / 3 '0 1 / 3 '0 2 / 3 '0 3 / 3 '0 4 / 3 '0 5 / 3 '0 6 / 3 '0 7 / 3 '0 8 / 3 '0 9 / 3 '1 0 / 3 '
Slide 52: Outlook for Return to Shareholders
Maintaining total shareholder return of 50% through result-driven dividend and share repurchase program Outlook for Return to Shareholders (in billion yen) 18,000 Dividends Company stock buy-back Profit return ratio 100.0% 93.9% 16,000 90.0% 80.0% 14,000 70.0% 12,000 64.2% 59.9% 58.7% 60.0% 10,000 5
Slide 53: Unicharm Ideals
Unicharm Ideals We contribute to creating a better quality of life for everyone by offering only the finest products and services to the market and customers, both at home in Japan and abroad. We strive to pursue proper corporate management principles which combine corporate growth, associated well-
Slide 54: Copyright (c) 2012 Unicharm Corporation. All rights reserved.
Copyright (c) 2012 Unicharm Corporation. All rights reserved. 54