FY03/2010

KOSÉ Corporation
Results of Operations
Fiscal Year Ended March 31, 2010
April 30, 2010
Contents
FY03/2010 Results of Operations
FY03/2010 Results Overview
Progress in Medium-Term
Management Plan
2
„ FY03/2010 Results of Operations
FY03/2010
Results of Operations
Shinji Ishikura, Executive Director
3
„ FY03/2010 Results of Operations
Trends in the Japanese Cosmetics Market
Shipment value, Articles and Unit Prices
(billion units)
(trillion yen)
2.8
2.6
683
667
634
1.6
594
2.4
576
561
578
571
591
2004
2005
597
580
1.4
590
540
2.2
1.2
Number of articles (billion units)
2.0
Shipment value (trillion yen)
Unit price (yen)
1.8
1997
1998
1999
2000
2001
2002
2003
2006
2007
2008
2009
Source: Ministry of Economy, Trade and Industry (excluding import)
4
„ FY03/2010 Results of Operations
Trends in the Japanese Cosmetics Market
Comparison of KOSÉ and Industry Shipments
(1997 = 100)
140
130
KOSÉ consolidated sales
(within Japan)
124
120
110
100
90
Japanese cosmetics
industry
92
80
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Ministry of Economy, Trade and Industry (excluding import)
5
„ FY03/2010 Results of Operations
Consolidated Income Statement Highlights (1)
FY03/2009
Ratio to
net sales
FY03/2010
Ratio to
net sales
(million yen)
(%)
(million yen)
(%)
YoY change
(million yen)
(%)
178,121
100.0
172,564
100.0
(5,556)
(3.1)
45,279
25.4
44,468
25.8
(811)
(1.8)
SG&A expenses
120,538
67.7
117,964
68.3
(2,573)
(2.1)
Operating income
12,303
6.9
10,132
5.9
(2,170)
(17.6)
Ordinary income
12,017
6.7
10,832
6.3
(1,184)
(9.9)
Income before
income taxes
11,261
6.3
9,418
5.5
(1,842)
(16.4)
4,742
2.7
5,154
3.0
Net sales
Cost of sales
Net income
Net income per share
81.55 yen
88.81 yen
412
8.7
7.26 yen
6
„ FY03/2010 Results of Operations
Consolidated Income Statement Highlights (2)
FY03/2009
(million yen)
Net sales
Cost of sales
Gross profit
SG&A expenses
Ratio to
net sales
(%)
FY03/2010
(million yen)
Ratio to
net sales
(%)
YoY change
(million yen)
(%)
178,121
100.0
172,564
100.0
(5,556)
(3.1)
45,279
25.4
44,468
25.8
(811)
(1.8)
132,841
74.6
128,096
74.2
(4,744)
(3.6)
120,538
67.7
117,964
68.3
(2,573)
(2.1)
8,640
37,749
5,287
43,843
2,744
4,333
17,939
4.9
4.8
20.7
3.1
25.8
1.6
2.5
9.8
(289)
(1,951)
62
619
96
(26)
(1,084)
(3.4)
10.1
8,350
35,797
5,350
44,462
2,840
4,306
16,854
6.9
10,132
5.9
(2,170)
(17.6)
<Significant accounts>
Advertising
Sales promotion
Freightage and packing
Personnel
Depreciation
R&D
Other
Operating income
12,303
21.2
3.0
24.6
1.5
2.4
(5.2)
1.2
1.4
3.5
(0.6)
(6.0)
7
„ FY03/2010 Results of Operations
Consolidated Balance Sheet Highlights
FY03/2009
Share
FY03/2010
Share
YoY change
(million yen)
(%)
(million yen)
(%)
(million yen)
100,760
60.4
99,925
59.7
(835)
21,846
13.1
22,717
13.6
870
66,159
39.6
67,470
40.3
1,310
39,296
23.5
37,337
22.3
(1,958)
166,920
100.0
167,395
100.0
475
Current liabilities
37,199
22.3
35,643
21.3
(1,556)
Noncurrent liabilities
25,252
15.1
24,213
14.5
(1,038)
62,452
37.4
59,857
35.8
(2,594)
104,468
62.6
107,538
64.2
3,069
98,676
59.1
101,385
60.6
2,708
166,920
100.0
167,395
100.0
475
Current assets
Inventories
Noncurrent assets
Property, plant and equipment
Total assets
Total liabilities
Total net assets
Shareholders' equity
Total liabilities and net assets
8
„ FY03/2010 Results of Operations
Consolidated Cash Flow Highlights
FY03/2009
FY03/2010
YoY change
(million yen)
(million yen)
(million yen)
Net cash provided by (used in)
operating activities
8,927
10,328
1,401
Net cash provided by (used in)
investing activities
1,865
(12,622)
(14,487)
Net cash provided by (used in)
financing activities
(5,183)
(2,661)
2,522
4,972
(5,279)
(10,251)
Change in cash and cash
equivalents
Cash and cash equivalents
at end of period
39,066
33,787
(5,279)
9
„ FY03/2010 Results of Operations
Results by Business Segment (1)
Net
Net sales
sales (Sales
(Sales to
to third
third parties)
parties)
Segment
FY03/2009
FY03/2010
(million yen)
(million yen)
Cosmetics
132,517
126,104
Cosmetaries
43,821
44,972
Other
1,782
1,487
YoY change
(million yen)
Share (%)
(%)
FY03/2009
FY03/2010
(6,412)
(4.8)
74.4
73.1
1,151
2.6
24.6
26.0
(16.6)
1.0
0.9
(295)
10
„ FY03/2010 Results of Operations
Results by Business Segment (2)
Operating
Operating income
income (before
(before elimination)
elimination)
Segment
FY03/2009
FY03/2010
(million yen)
(million yen)
14,572
11,890
Cosmetaries
136
585
Other
444
521
Cosmetics
YoY change
(million yen)
Operating margin (%)
(%)
FY03/2009
FY03/2010
(18.4)
11.0
9.4
449
330.1
0.3
1.3
76
17.2
10.6
13.6
(2,682)
11
„ FY03/2010 Results of Operations
Income Statement Forecasts
FY03/2010
FY03/2011 (Forecast)
(million yen)
(million yen)
172,564
Net sales
Cosmetics
Cosmetaries
Other
Operating income
Ordinary income
Net income
Net income per share
Capital expenditure
Depreciation
178,400
YoY change
(%)
3.4
126,104
44,972
1,487
129,600
47,500
1,300
2.8
5.6
(12.6)
10,132
10,832
5,154
11,000
11,100
5,900
8.6
2.5
14.5
88.81 yen
6,463
5,891
101.64 yen
5,700
5,700
12
FY03/2010 Results Overview
and
Progress in Medium-Term
Management Plan
Kazutoshi Kobayashi, President
13
„ FY03/2010 Results Overview
Trends in the Japanese Cosmetics Market
YoY Comparison of Industry Shipments in 2009 (Monthly basis)
(%)
110
Shipment value
Number of articles
100
90
80
Jan.
2009
Feb.
2009
Mar.
2009
Apr.
2009
May
2009
Jun.
2009
Jul.
2009
Aug.
2009
Source: Ministry of Economy, Trade and Industry (excluding import)
Sep.
2009
Oct.
2009
Nov.
2009
Dec.
2009
14
„ FY03/2010 Results Overview
FY03/2010 Results Overview
Consolidated sales: 172.5 billion yen
down 3.1% YoY
(excluding foreign exchange impact: down 1.8%)
Cosmetics
- The environment remained harsh
"High Prestige" market and domestic
"Prestige " market
- Revenues in overseas markets increased in the
double digits (local currency basis)
Cosmetaries
- Sales remained steady in 4Q and increased on
an annual basis
15
„ FY03/2010 Results Overview
Cosmetics Business (1)
From top left: COSME DECORTE AQ MELIORITY
From left: ADDICTION EYE SHADOW,
MOISTURE LIPOSOME, ETERNIA SUR FOUNDATION,
LIPSTICK, EYELINER PENCIL
WHITELOGIST SPOTS CONCENTRATION
16
„ FY03/2010 Results Overview
Cosmetics Business (2)
From left: GRANDAINE LUXAGE
Medicated SEKKISEI SUN PROTECTOR
BRIGHT LIFTING FOUNDATION,
BRIGHT LIFTING LIQUID FOUNDATION, CONCEALER
17
„ FY03/2010 Results Overview
Cosmetaries Business
From top left: KOKKO MAMA Sunscreen Gel, COSMAGIC, SALON
STYLE PRECIOUS HEAD SPA Conditioner A (air in smooth) and
Hair Treatment Mask, SOFTYMO Sara-Sara Powder Sheet and
White Cleansing Oil N Refill
From top: HAPPY BATH DAY Precious Rose Body
Steam Oil and Repair Rose Hair Mist (morning),
FASIO Hyper-stay Mascara (curl long) and Shade
Trick Eyes
18
„ FY03/2010 Results Overview
Overseas Operations
KOSÉ counter in department store in China
COSME DECORTE counter in department store in Korea
JILLSTUART Event in department store in Korea
COSME DECORTE Skin Care Clinic
(left: Hong Kong, right: Taiwan)
KOSÉ directly-managed stores in Hong Kong,
Introduction of Nature&Co at KOSÉ counter in
department store in China
19
„ Progress in Medium-Term Management Plan
Medium-Term Management Plan
Management
Management Policies
Policies
Rebuilding the cosmetics business in Japan
Reinforcing overseas operations
Entering new business fields
Upgrading the Group’s overall strengths
20
„ Progress in Medium-Term Management Plan
Medium-Term Management Plan
1. Strengthen the foundations of domestic businesses
Eliminate waste and strengthen the counseling business
2. Cultivate brands
Grow brands that can also be successful in overseas markets
Aiming to become a company
with a global presence
21
„ Progress in Medium-Term Management Plan
Rebuilding the Cosmetics Business in Japan
Optimize the brand portfolio
- Simplified the brand system
- Strengthening the counseling business
- Creation of valuable brands
(Propose new customer value )
High Prestige
Prestige
Self Selection
22
„ Progress in Medium-Term Management Plan
Rebuilding the Cosmetics Business in Japan
Launch COSME DECORTE CYCLIC-KEY and
AQ FACIAL PURE OIL N in May 2010
SEKKISEI’s 25th anniversary
Update AWAKE’s brand image
23
„ Progress in Medium-Term Management Plan
Rebuilding the Cosmetics Business in Japan
Making stores selling KOSÉ products more appealing as select stores/
Building more powerful sales system
- Review of marketing costs
- Establishment of support centers
- Efficient reallocation of sales branches
Concentration of resources
Concentration of resources
Strengthen
Strengthen
appeal
appeal of
of stores
stores
Deepen
Deepen
relationship
relationship with
with
vendors
vendors
Improve
Improve the
the
return
return ratio
ratio
24
„ Progress in Medium-Term Management Plan
Reinforcing Overseas Operations
- Strengthening of global brands
- Adding overseas brands through
acquisitions and alliances
- Establishing a presence in new
overseas markets
25
„ Progress in Medium-Term Management Plan
Reinforcing Overseas Operations
COSME DECORTE counter in department store in China
April 2010
Launched SEKKISEI SUPREME FOUNDATION in 9 countries and regions outside Japan.
Lower right: Event in department store in Singapore
JILLSTUART directly-managed store in Hong Kong
26
„ Progress in Medium-Term Management Plan
Entering New Business Fields
Business fields with expectations for expansion
Entry into the male cosmetics markets
February 2010 debut
“adidas skin protection”
27
„ Progress in Medium-Term Management Plan
Upgrading the Group’s Overall Strengths
Improve operating efficiency and strengthen earnings
Outsourcing of logistic activities
Cut costs across the entire organization
28
These materials include estimates on the basis of the outlook on the future and plans as of
April 30, 2010. Actual results may differ from these forecasts due to risks associated with
economic trends and other items as well as to other uncertainties. KOSÉ Corporation
accepts no responsibility whatsoever with regard to any possible mistakes, missing
information and other errors in the data and text in these materials.
These materials were prepared for the purpose of providing information concerning the
finances, management strategies and other aspects of KOSÉ Corporation to assist in
making investment decisions. This is not a solicitation to purchase securities issued by
KOSÉ Corporation. Investors are cautioned not to rely solely on these materials when
making investment decisions. Investors are asked to reach their own decisions regarding
investments.
KOSÉ Corporation assumes no responsibility whatsoever for problems, losses and damages
of any type resulting from the use of these materials.
29