Results of Operations Six Months Ended September 30, 2015

Transcription

Results of Operations Six Months Ended September 30, 2015
KOSÉ Corporation
October 30, 2015
1. 1H FY03/2016 Results of Operations Koichi Shibusawa, Director, General Manager of Accounting and Finance Dept.
2. First‐half Overview / Second‐half Initiatives
Kazutoshi Kobayashi, President & CEO
3. Supplementary Information (excerpt from presentation materials)
Copyright © 2015 KOSÉ Corporation. All rights reserved.
2
Consolidated Income Statement Highlights
1H FY03/2015
1H FY03/2016
Ratio to
Amount
net sales
(million yen)
(%)
(million yen)
Amount
Net sales
Vs plan
(revised Jul. 31)
YoY change
Ratio to
net sales
(%)
(million yen)
(%)
(million yen)
(%)
93,943 100.0 115,407 100.0 21,463 22.8 4,407 4.0 Cost of sales
22,437 23.9 27,670 24.0 5,232 23.3 -
-
SG&A expenses
64,458 68.6 69,691 60.4 5,232 8.1 -
-
Operating income
7,046 7.5 18,045 15.6 10,998 156.1 5,045 38.8 Ordinary income
8,104 8.6 18,691 16.2 10,586 130.6 4,891 35.4 Income before income taxes
8,029 8.5 18,682 16.2 10,653 132.7 -
-
Profit attributable to owners
of parent
4,140 4.4 10,951 9.5 6,811 164.5 3,251 42.2 Net income per share
72.57 yen
191.98 yen
+119.41 yen
+57.00 yen
3
SG&A Expenses
1H FY03/2015
1H FY03/2016
Amount
Ratio to
net sales
Amount
Ratio to
net sales
(million yen)
(%)
(million yen)
(%)
YoY change
(million yen)
(%)
93,943 100.0 115,407 100.0 21,463 22.8 22,437 23.9 27,670 24.0 5,232 23.3 71,505 76.1 87,736 76.0 16,230 22.7 SG&A expenses
64,458 68.6 69,691 60.4 5,232 8.1 <Significant accounts>
Advertising
Sales promotion
Freightage and packing
Personnel
Depreciation
R&D
Others
7,123 18,869 3,653 22,812 1,321 2,270 8,407 7.6 20.1 3.9 24.3 1.4 2.4 8.9 7,156 21,300 4,152 23,854 1,425 2,317 9,483 6.2 18.5 3.6 20.7 1.2 2.0 8.2 33 2,431 498 1,042 104 47 1,075 0.5 12.9 13.7 4.6 7.9 2.1 12.8 7,046 7.5 18,045 15.6 10,998 156.1 Net sales
Cost of sales
Gross profit
Operating income
4
Factors Impacting Operating Income (billion yen)
25
(3.0)
(1.0)
20
Increase in selling expenses
15
+16.2
Increase in personnel expenses
(1.2)
Increase in administration expenses
10
18.0
5
7.0
Increase in gross profit
0
1H FY03/2015
1H FY03/2016
5
Cost of Sales and SG&A Expense Ratios
Ratios to Sales during the Past Five Years
Cost of Sales Ratio
SG&A Expense Ratio
6
Net Sales by Segment (sales to third parties)
Segment
1H FY03/2015
1H FY03/2016
(million yen)
(million yen)
YoY change
(million yen)
Share (%)
(%)
1H FY03/2015
1H FY03/2016
Cosmetics
66,394 83,626 17,232 26.0 70.7 72.5 Cosmetaries
26,670 30,694 4,023 15.1 28.4 26.6 878 1,086 207 23.7 0.9 0.9 Other
(million yen)
150,000
1,086
100,000
878
30,694
Other
Cosmetaries
26,670
50,000
66,394
0
1H FY03/15
Other
Cosmetaries
83,626
207
4,023
Cosmetics
Cosmetics
1H FY03/16
17,232
YoY change (million yen)
7
Operating Income by Segment (before elimination)
Segment
1H FY03/2015
1H FY03/2016
(million yen)
(million yen)
YoY change
(million yen)
Operating margin (%)
(%)
1H FY03/2015
1H FY03/2016
Cosmetics
6,901 15,671 8,769 127.1 10.4 18.7 Cosmetaries
1,865 3,768 1,903 102.1 7.0 12.2 309 510 200 64.7 24.4 36.0 Other
(million yen)
510
20,000
3,768
Other
Cosmetaries
Other
200
15,000
10,000
309
Cosmetics
1,865
Cosmetics
6,901
1H FY03/15
1,903
15,671
5,000
0
Cosmetaries
1H FY03/16
8,769
YoY change (million yen)
8
Net Sales by Region
Area
1H FY03/2015
1H FY03/2016
YoY change
Growth rate
(million yen)
(million yen)
(million yen)
(%)
Japan
Asia
Europe & USA
Total
Overseas sales
(Overseas sales ratio)
Europe & USA
2.5%
1H FY03/15
Asia
11.1%
81,208 10,402 2,332 93,943 97,005 11,502 6,899 115,407 15,796 1,100 4,567 21,463 19.5 10.6 195.8 22.8 12,734 13.6 18,401 15.9 5,667 44.5 Europe & USA
5.9%
1H FY03/16
Asia
10.0%
Japan
日本
86.4%
87.2%
Japan
日本
84.1%
83.6%
9
Balance Sheet Highlights
FY03/2015
Current assets
1H FY03/2016
YoY change
Amount
Share
Amount
Share
(million yen)
(%)
(million yen)
(%)
(million yen)
134,476 65.6 142,460 66.9 7,983
28,099 13.7 33,119 15.6 5,020
70,530 34.4 70,396 33.1 (133)
21,700 10.6 20,977 9.9 (723)
205,006 100.0 212,856 100.0 7,850
45,207 22.0 44,003 20.7 (1,204)
10,160 5.0 9,324 4.4 (836)
55,368 27.0 53,327 25.1 (2,041)
149,637 73.0 159,529 74.9 9,891
Shareholders' equity
140,065 68.3 148,911 70.0 8,846
Total liabilities and net assets
205,006 100.0 212,856 100.0 7,850
Inventories Non‐current assets
Intangible assets
Total assets
Current liabilities
Non‐current liabilities
Total liabilities
Total net assets
z Effect of acquisition of Tarte, Inc. on the consolidated balance sheet (breakdown of intangible assets; * 1H FY03/2015)
・Goodwill: ¥9.4 billion (*amortized over 13 years by the straight‐line method) ・ Trademark right and customer‐related assets: ¥6.3 billion
10
Change in FY03/2016 Forecast
Previous forecast
Revised forecast
(Annouced on Jul. 31, 2015)
(Announced on Oct. 30, 2015)
Amount
(million yen)
Ratio to net
sales
(%)
Amount
(million yen)
Ratio to net
sales
(%)
YoY change
(million yen)
(%)
230,000 100.0 235,000 100.0 5,000
2.2
Cosmetics
169,100 73.5 174,000 74.1 4,900
2.9
Cosmetaries
58,900 25.6 58,800 25.0 (100)
(0.2)
Other
2,000 0.9 2,200 0.9 200
10.0
Operating income
28,000 12.2 33,000 14.0 5,000
17.9
Ordinary income
Profit attributable to
owners of parent
Net income per share
28,600 12.4 33,600 14.3 5,000
17.5
16,200 7.0 19,200 8.2 3,000
18.5
Net sales
283.99 yen
336.58 yen
USD/JPY (yen)
114 120 TWD/JPY (yen)
3.7 3.8 CNY/JPY (yen)
18.6 19.2 Copyright © 2015 KOSÉ Corporation. All rights reserved.
+52.59 yen
11
FY03/2016 Forecast (Vs. FY03/2015)
FY03/2015
FY03/2016 (forecast)
Amount
Ratio to
net sales
Amount
Ratio to
net sales
(million yen)
(%)
(million yen)
(%)
YoY change
(million yen)
(%)
207,821 100.0 235,000 100.0 27,178 13.1 Cosmetics
152,806 73.5 174,000 74.1 21,193 13.9 Cosmetaries
53,214 25.6 58,800 25.0 5,585 10.5 Other
1,800 0.9 2,200 0.9 399 22.2 Operating income
22,647 10.9 33,000 14.0 10,352 45.7 Ordinary income
25,106 12.1 33,600 14.3 8,493 33.8 Profit attributable to
owners of parent
12,057 5.8 19,200 8.2 7,142 59.2 Net income per share
211.37 yen
Net sales
336.58 yen
Foreign exchange rate
Actual
Capital expenditure
Depreciation
21,143
5,293
10,400
5,200
106 3.5 17.2 Estimate
Currency
120 Yen/US dollar
3.8
Yen/Taiwan dollar
19.2 Yen/Chinese yuan
12
Sales Planning Policy
Forex
Inbound
Tarte
Organic growth (current businesses)
+14.0
+5.0
Breakdown of higher sales of ¥5.0 billion
Forex: +0.6
Inbound: +1.0
Tarte: +1.0
Organic growth: +2.4
13
Dividends / Payout Ratio
(yen)
74
64
48
40
41
(Plan)
14
1. 1H FY03/2016 Results of Operations Koichi Shibusawa, Director, General Manager of Accounting and Finance Dept.
3. Supplementary Information (excerpt from presentation materials) Copyright © 2015 KOSÉ Corporation. All rights reserved.
15
Overview of 1H FY03/2016
Three engines of growth propelled sales and operating income to all‐time highs
Net sales: ¥115.4 billion (up 22.8% YoY)
(1)
More powerful current operations by reforms
Three growth engines
Operating income: ¥18.0 billion (up 156.1% YoY)
The biggest growth engine‐ All major brands contributed to growth
• High prestige: COSME DECORTE, ALBION
• Prestige: SEKKISEI, ESPRIQUE
• Cosmetaries: COSMEPORT, VISÉE
(2) Sales to foreign tourists in Japan
All product categories used many sales channels to target foreign tourists in Japan
Sales to foreign tourists in Japan: ¥7.5 billion (Apr. ‐ Sep. 2015)
• 1Q = ¥3.5 billion
• 2Q = ¥4.0 billion
(3)
Consistent growth at Tarte
Tarte has been growing consistently since KOSÉ acquired the company in April 2014
Existing‐store sales and the number of other stores selling Tarte products are both increasing
Sales: ¥6.7 billion Operating income: ¥1.8 billion (Jan. ‐ Jun. 2015)
16
(1) More Powerful Current Operations (High Prestige)
COSME DECORTE
A new look for the DECORTÉ logo was unveiled with the launch of LIPOSOME Treatment Liquid. Global marketing activities are making COSME DECORTE a brand recognized worldwide.
Product
LIPOSOME Treatment Liquid
(September)
New logo
Brand ambassador
Cosmetic counter
Kate Moss
17
ALBION
ALBION updated the skin care product lineup for more appeal to new and current customers and created a new format for the specialty store distribution channel. Major new products
New‐format store
(ALBION DRESSER)
Relaunched EXAGE
(August)
18
JILL STUART
To celebrate the brand’s 10th anniversary, there were more actions to establish JILL STUART as a “life style brand” such as an opening of a new‐concept JILL STUART Beauty & PARTY shop. Major new products
New‐concept shop
(JILL STUART Beauty & PARTY)
10th Anniversary Collection
(August)
19
(1) More Powerful Current Operations (Prestige)
SEKKISEI
Almost all categories performed well backed by various promotional activities celebrating the brand’s 30th anniversary and the launch of new products.
Major new products
Major promotional activities
© Disney
Snowy Loose Powder (April)
White BB Cream Moist
(September)
Tie‐up campaign with the Disney movie Cinderella
(1Q)
“SAVE the BLUE” campaign
(2Q)
20
(1) More Powerful Current Operations (Prestige)
ESPRIQUE
HADAKIWAMI
ESPRIQUE posted higher sales as new products were added. HADAKIWAMI sales also increased as the lineup of facial cleansing/facial washing products was expanded. Major new product and ad
Select Eye Color
(July)
Ad: Oil Essence Make Up Base
Major new product and ad
Cleansing Oil
(August)
Ad: Powder Wash
21
(1) More Powerful Current Operations (Cosmetaries)
COSMEPORT
Sales and market share continued to increase due to new products that raised the brand’s presence in stores and promotional activities, mainly for key product categories.
SUNCUT®
CLEAR TURN
Je l’aime (Sunscreen products)
(Skincare)
(In bath hair care)
22
(1) More Powerful Current Operations (Cosmetaries)
VISÉE
ELSIA
NAIL HOLIC
The self‐selection makeup brands VISÉE and ELSIA and the new nail product brand NAIL HOLIC, which recorded shipments of 2.35 million units in the first four months following its launch, performed well.
Product and ad
Product and ad
Products
23
Strengthening Lines of Communication with Customers
KOSÉ Beauty Festa 2015
STEPHEN KNOLL
HAIR SMOOTHING BAR
KOSÉ focused not only on merchandise (cosmetics) but also on new ideas (added value and memorable experiences) to strengthen lines of communication with customers.
24
(2) Sales to Foreign Tourists in Japan
Foreign tourists in Japan purchase products in many price categories and generate a broad range of demand spanning a variety of sales channels.
Brands popular among foreign tourists in Japan
High Prestige
Major products
Channels significantly influenced by foreign tourists in Japan
Department stores
Medicated Skin Conditioner Essential
Prestige
Drug stores
SEKKISEI
Drug stores
Cosmetaries
Convenience stores
SEKKISUI
25
(3) Consistent Growth at Tarte
Tarte
Net sales and operating income have been increasing steadily at Tarte following its acquisition by KOSÉ
in April 2014. Existing store sales are up and the number of stores selling Tarte products is increasing. Quarterly Net Sales and Operating Income Number of Stores Selling Tarte Products
(billion yen)
(stores)
2014
2015
* Tarte sales and earnings are for calendar years.
* Consolidated in 2014/2Q. Operating income is before goodwill amortization.
26
(3) Consistent Growth at Tarte (Products)
27
Second‐half Initiatives
High Prestige
Establish global brands that are recognized and respected in Japan and overseas
Prestige
Increase loyal users of current brands by meeting customer needs that go beyond seasons and age segments
Cosmetaries
Increase sales and market shares in mass markets
28
High Prestige
COSME DECORTE
MOISTURE LIPOSOME
Limited‐edition bottle commemorating 45th anniversary of COSME DECORTE (November)
ALBION
EX‐VIE GINZA Cream (November)
Heightening the stature of COSME DECORTE and ALBION in Japan and overseas by introducing new products and limited‐time‐only products that serve as symbols of these brands
29
Prestige
SEKKISEI
Medicated SEKKISEI Enriched (October)
ESPRIQUE
ESPRIQUE Éclat (October)
ASTABLANC
ASTABLANC renewal (October)
SEKKISEI: Targeting customer needs that go beyond seasons and age segments by introducing a moisture‐rich version
ESPRIQUE/ASTABLANC: Reinforcing activities to position these as brands targeting people in age segments starting at 45
30
Cosmetaries
COSMEPORT
KOKUTOUSEI (August)
SOFTYMO GRACE ONE renewal (August)
Supporting second‐half performance by enlarging the lineup of new products for fall and winter while continuing measures to strengthen the brand’s presence at stores
31
Activities in North America
Group company (Shareholding ratio)
Brand
Tarte, Inc. (93.5%)
Sales channel
Sales outlets
Cosmetics retailers
QVC
E‐commerce
Sephora
ULTA
Department stores
Saks Fifth Avenue
North American market
KOSE America, Inc. (100%)
Launch in Spring 2016
Aiming for growth in both the self‐selection and counseling categories in North America by using activities by both Tarte and KOSE America
32
COSME DECORTE in North America
×
Selling products of the new DECORTÉ brand exclusively at the high‐end department stores of Saks Fifth Avenue
33
1. 1H FY03/2016 Results of Operations
Koichi Shibusawa, Director,
General Manager of Accounting and Finance Dept.
3. Supplementary Information (excerpt from presentation materials)
34
Medium‐term Management Plan 2017
Basic Strategy (Phase II Building and strengthening global brands)
Promote brands to win recognition and respect around the world
Promote brands to win recognition and respect around the world
Promote flagship global brands
Medium‐term Management Plan 2017 Phase II Accelerate the pace of developing new markets
Implement the strategies of all business segments
Achieve a sustainable improvement in performance
Concentrate on growth drivers
Previous Medium‐term Management Plan Phase I Expand profitability of core brands
Build a more powerful operating framework
“One World, One Market, One Mind”
Go beyond regions and distribution channels to expand points of contact with customers
Establish the strengths of each brand and create new forms of value for customers
Achieve a sustainable improvement in performance
Develop products and services that can create new markets and are highly competitive
Improve the performance of human resources
Operate more efficiently
35
Promote Brands to Win Recognition and Respect around the World
Promote flagship global brands
COSME DECORTE
SEKKISEI
JILL STUART
36
Medium‐term Management Plan 2017(announced on April 30, 2015) Performance Benchmarks
(FY03/2018)
Performance benchmarks
Net sales
Operating margin
¥230 billion
11% or more
ROA
12%
ROE
10%
Note: We revise the three‐year numerical performance targets in our medium‐term management plan every fiscal year to take into account progress and respond flexibly to the business environment (rolling method). Copyright © 2015 KOSÉ Corporation. All rights reserved.
37
The VISION2020 Roadmap
Become a company with a global presence
A new stage of progress at a higher level
FY03/2021 Sales: ¥250bn Operating income: ¥30bn
Leverage brands and human resources that can succeed worldwide in order to sell products to more people and create a company where people are proud to work.
Medium‐term plan 2017
Previous stages of progress
Phase III
Global expansion
with higher earnings
Phase II
Building and strengthening global brands
Step up the pace of progress
IPO
Phase II
Enlarge business domains
Phase I
V‐shaped turnaround
FY03/21
FY03/20
FY03/19
FY03/18
FY03/17
FY03/16
70th anniversary
FY03/15
FY03/14
FY03/13
FY03/12
FY03/11
FY03/10
FY03/09
FY03/08
FY03/07
FY03/06
FY03/05
FY03/04
FY03/03
FY03/02
FY03/01
Defensive reforms Offensive reforms
38
Accomplishments of Past Reforms
“Defensive reforms”
(from April 2008 to March 2011)
“Offensive reforms”
(from April 2011 onward)
[Fundamental policy]
1. Rebuilding the cosmetics business in Japan
2. Reinforcing overseas operations
3. Entering new business fields
4. Upgrading the KOSÉ Group’s overall strengths
[Fundamental policy]
1. Concentrate on growth drivers
2. Expand the profitability of core brands
3. Build a more powerful operating framework
[Major initiatives]
• Making stores selling KOSÉ products more appealing / Lowering product returns • Optimizing the brand portfolio / Minimizing SKU (Stock Keeping Unit)
• Outsourcing of logistic activities
[Major initiatives] • Strengthen mass‐market businesses
• Maintain a brand management structure • Cut the cost of manufacturing products
• Make full‐scale entry into e‐commerce and hair salon businesses
Eliminated waste
Increase sales and market share
39
Consolidated Performance
Since Kazutoshi Kobayashi became president in 2007, KOSÉ has achieved a strong recovery due to a series of reforms in all aspects of operations.
Operating income
(billion yen)
Net sales
(billion yen)
Appointed as President
(June 2007)
“Defensive reforms”
“Offensive reforms”
40
USA: Tarte Became a KOSÉ Subsidiary (April 2014)
Company outline
tarte brand
Name: Tarte, Inc.
Location: New York, USA
Representative: Maureen Kelly, CEO
Business: Cosmetics sales
Founding: 1999
Concept
• High‐performance natural
Products
• Color cosmetics and skincare products
Distribution channels
• Cosmetics retailers (Sephora, ULTA, Macy’s Impulse, etc.)
• Online shopping (tarte website), TV shopping (QVC)
Main target
• Women in their 20s and 30s
Number of outlets • Approx. 1,500
handling the brand
41
Business Segments and Core Brands
Core brands
ALBION Co., Ltd.
Dr. PHIL COSMETICS INC.
CRIE CO., LTD.
SEKKISEI
HADAKIWAMI
KOSÉ PROVISION CO., LTD.
MAIHADA
KOSÉ COSMEPORT CORP.
42
These materials include estimates on the basis of the outlook on the future and plans as of October 30, 2015, but are not promises by KOSÉ Corporation regarding future performance. 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. Copyright © 2015 KOSÉ Corporation. All rights reserved.
43

Results of Operations Six Months Ended September 30, 2015

Transcription

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