Third Quarter of Fiscal 2023
Supplementary Material
POLA ORBIS HOLDINGS INC.
Corporate Officer
PR, IR, CSR and Sustainability
Naotaka Hashi
- 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 projections resulting from changes in the economic environment and other risks and uncertainties.
- POLA ORBIS HOLDINGS INC. has applied Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. from fiscal 2022. The results for fiscal 2021 in this presentation have been calculated using the same accounting standards as those in fiscal 2022, and are shown as reference information (unaudited) for the purpose of comparison.
- Highlights of Consolidated Performance
- Segment Analysis
- Forecasts for Fiscal 2023
- Initiatives Going Forward & Appendices
1
Q3 Key Topics
Cosmetics Market
- The scale of the Japanese cosmetics market (including exports) was strong.
- In terms of domestic demand, economic activity progressed toward normalization and the recovery from the COVID-19 pandemic continued also in the cosmetics market.
- The recovery in inbound demand progressed due to an increase in the number of foreign tourists (consolidated inbound net sales for the first three quarters: up approx. 70% YoY, a revenue increase of approx. ¥0.9 billion).
- The cosmetics market in mainland China requires monitoring, with a sense of uncertainty concerning economic conditions and consumption trends.
Source: Ministry of Economy, Trade and Industry, Ministry of Internal Affairs and Communications, Japan Tourism Agency, Japan Department Stores Association, Intage SLI, and National Bureau of Statistics of China
Our Group
- Consolidated net sales increased both in Japan and overseas (up 6% YoY in Japan, up 6% YoY in overseas). Substantial increase in consolidated operating income (up 55% YoY).
- POLA's revenue and income increased in Japan, supported by growth in aesthetic treatment and B.A. Overseas revenue fell short of our expectations, despite a 10% increase, due to a slowdown in mainland China against partly caused by unanticipated changes in the market environment.
- ORBIS's progress exceeded expectations, with growth in number of customers and average purchase per customer resulting in a double-digit growth in revenue and substantial increase in income.
- Jurlique's revenue increased and losses were ameliorated in the third quarter (July to September).
- Losses from brands under development were ameliorated.
Medium-term Management
Plan Indicators (FY2023 Q3 YTD)
Overseas sales ratio | 16.8% |
(-0.6ppt*) | |
Domestic e-commerce | 27.7% |
sales ratio | (+0.8ppt*) |
*vs Dec. 2022 |
YoY Change in Consolidated Monthly Net Sales
(%)
20
10
0
-10
Jan.-Mar.
11.9%
Apr.-Jun.
6.4%
Jul.-Sep.
-0.0%
- Revenue in Japan is steady due to reopening.
- For overseas, sales activities in mainland China were triggered by the release of ALPS* treated water into the ocean, in addition to a sense of uncertainty regarding the economic outlook.
*Advanced Liquid Processing System
Month by month | |
Cumulative total | 2 |
Consolidated P&L Changes Analysis
Net Sales to Operating Income
FY2022 | FY2023 | YoY Change | |||
(mil. yen) | Q3 Results (YTD) | Q3 Results (YTD) | Amount | % | |
Consolidated net sales | 119,654 | 126,739 | 7,084 | 5.9% | |
Cost of sales | 21,795 | 22,799 | 1,004 | 4.6% | |
Gross profit | 97,859 | 103,939 | 6,080 | 6.2% | |
SG&A expenses | 90,190 | 92,026 | 1,835 | 2.0% | |
Operating income | 7,668 | 11,913 | 4,244 | 55.4% | |
Key Factors | |||
Revenue increased both in Japan and overseas. | |||
■ Consol. net sales | |||
■ Cost of sales | The cost of sales ratio declined due to lower loss on valuation and | ||
abandonment of inventories. | |||
Cost of sales ratio FY2022 Q3 : 18.2% ⇒ FY2023 Q3 : 18.0% | |||
■ SG&A expenses | Labor expenses: up ¥132 mil. YoY | ||
Sales commissions: up ¥566 mil. YoY | |||
Sales related expenses: up ¥343 mil. YoY | |||
Administrative expenses, etc.: up ¥794 mil. YoY | |||
■ Operating income | Operating margin FY2022 Q3: 6.4% ⇒ FY2023 Q3: 9.4% | ||
3
Consolidated P&L Changes Analysis
Operating Income to Profit Attributable to Owners of Parent
FY2022 | FY2023 | YoY Change | |||||
(mil. yen) | Q3 Results (YTD) | Q3 Results (YTD) | Amount | % | |||
Operating income | 7,668 | 11,913 | 4,244 | 55.4% | |||
Non-operating income | 4,903 | 3,159 | (1,744) | (35.6%) | |||
Non-operating expenses | 403 | 242 | (160) | (39.8%) | |||
Ordinary income | 12,169 | 14,830 | 2,660 | 21.9% | |||
Extraordinary income | - | 376 | 376 | - | |||
Extraordinary losses | 827 | 1,389 | 561 | 67.9% | |||
Profit before income taxes | 11,341 | 13,817 | 2,476 | 21.8% | |||
Income taxes etc. | (1,740) | 4,476 | 6,217 | - | |||
Profit attributable to non- | 47 | 56 | 8 | 18.9% | |||
controlling interests | |||||||
Profit attributable to | 13,035 | 9,284 | (3,750) | (28.8%) | |||
owners of parent | |||||||
Key Factors | |||||||
- Non-operatingincome: Decrease in foreign exchange gain (foreign exchange gain FY2022 Q3: ¥4,591 mil., FY2023 Q3: ¥2,777 mil.)
◼ Extraordinary losses: | Extraordinary losses due to discontinuation of Amplitude and ITRIM ¥785 mil. |
◼ Income taxes etc.: | Reduction in income taxes etc. - recorded in the same period last year due to liquidation of H2O PLUS |
¥4,466 mil. |
4
Factors Impacting Profit Attributable to Owners of Parent
Despite an increase in gross profit due to higher revenue, profit attributable to owners of parent declined by ¥3,750 mil. YoY due to a decrease in foreign exchange gain and the rebound of the reduction in income taxes, etc. in the same period last year.
(mil. yen)
20,000 | 286 | ||||||||||
18,000 | 132 | ||||||||||
566 | 343 | ||||||||||
16,000 | 5,794 | ||||||||||
14,000 | 13,035 | ||||||||||
12,000 | |||||||||||
10,000
8,000
6,000
4,000
2,000
0
FY2022 Q3 | Increase | Improved | Labor | Sales | Sales- |
Profit | in gross | cost of | expenses commissions | related | |
attributable | profit | sales ratio | expenses | ||
to owners | |||||
of parent |
Positive impact | Negative impact |
794 | 1,583 | |||||
184 | ||||||
Impact of decrease in | 6,226 | |||||
foreign exchange gain | ||||||
9,284
Impact of dissolution
and liquidation of H2O PLUS in the same period last year
Admin. | Non- | Extraordinary Income | FY2023 Q3 | |
expenses, | operating | income | taxes, | Profit |
etc. | income | and loss | etc. | attributable |
and loss | to owners | |||
of parent |
5
- Highlights of Consolidated Performance
- Segment Analysis
- Forecasts for Fiscal 2023
- Initiatives Going Forward & Appendices
6
Segment Results
FY2022 | FY2023 | YoY Change | ||||
(mil. yen) | Q3 Results (YTD) | Q3 Results (YTD) | Amount | % | ||
Consolidated net sales | 119,654 | 126,739 | 7,084 | 5.9% | ||
Beauty care | 116,231 | 123,260 | 7,029 | 6.0% | ||
Real estate | 1,561 | 1,557 | (3) | (0.2%) | ||
Others | 1,861 | 1,920 | 59 | 3.2% | ||
Operating income | 7,668 | 11,913 | 4,244 | 55.4% | ||
Beauty care | 8,319 | 11,707 | 3,387 | 40.7% | ||
Real estate | 430 | 420 | (10) | (2.4%) | ||
Others | 68 | 64 | (4) | (5.8%) | ||
Reconciliations | (1,150) | (279) | 871 | - | ||
Segment Results Summary | ||||||
◼ Beauty care | Net sales increased YoY, primarily due to an increase in revenue from POLA and | |||||
ORBIS, and operating income rose, mainly due to an increase in gross profit. | ||||||
7
Beauty Care Business Results by Brands
(mil. yen)
Beauty care net sales
POLA
ORBIS
Jurlique
Brands under development
Beauty care operating income
POLA
ORBIS
Jurlique
Brands under development
FY2022 | FY2023 | YoY Change | |
Q3 Results (YTD) | Q3 Results (YTD) | Amount | % |
116,231 | 123,260 | 7,029 | 6.0% |
69,462 | 72,860 | 3,397 | 4.9% |
28,109 | 31,227 | 3,117 | 11.1% |
5,387 | 5,880 | 493 | 9.2% |
12,040 | 12,601 | 561 | 4.7% |
8,319 | 11,707 | 3,387 | 40.7% |
8,568 | 9,286 | 717 | 8.4% |
3,116 | 4,450 | 1,333 | 42.8% |
(1,433) | (1,536) | (102) | - |
(1,758) | (578) | 1,180 | - |
Note: Consolidated operating income and loss for each brand are shown for reference purposes only (figures are unaudited). | |
Totals for the beauty care business include results for the H2O PLUS brand (completion of liquidation planned during 2023). | 8 |
Brand Analysis (1)
Q3 Result (YTD)
- Revenue continued to grow substantially in the department store, e-commerce, and amenities business. New customer acquisition progressed and the number of new customers in Japan increased YoY.
- Revenue from consignment sales decreased, taking time to rebuild the customer base, despite an improving trend in the number of customers.
- Revenue in mainland China increased, but was affected by the release of treated water.
Q3 (YTD) | Results (mil. yen) | YoY Change | ||
Net sales | 72,860 | 4.9% | ||
Operating income | 9,286 | 8.4% | ||
Key indicators | ||||
Sales ratio | Domestic | 83.1% | ||
Consignment sales | 62.5% | |||
E-commerce | 6.5% | |||
Dept. store, B2B(1) etc. | 14.1% | |||
Overseas | 16.9% | |||
Sales growth(2) | Domestic | up 3.8% | ||
Consignment sales | down 2.1% | |||
E-commerce | up 20.3% | |||
Dept. store, B2B etc. | up 30.3% | |||
Overseas | up 10.4% | |||
Consignment sales channel | up 8.1% / | |||
Purchase per customer(2)/ # of customers(2) | down 8.0% | |||
# of stores domestic(3) | 2,727 (down 107) | |||
# of stores overseas(3)/ | 158 (up 6) / | |||
# of stores mainland China(3) | 89 (up 2) |
Topics
-
Opened the second domestic store in a department store in South Korea, aiming to boost POLA's presence in
Asia (August)
Image for illustration purposes
Quarterly net sales (mil. yen)
30,000 | 26,545 | 24,183 | 26,522 | 25,579 | 24,757 | |||||||||||
23,826 | 24,406 | |||||||||||||||
21,229 | 23,097 | |||||||||||||||
20,000 | ||||||||||||||||
10,000 | ||||||||||||||||
0 | 2021 2022 2023 | 2021 2022 2023 | 2021 2022 2023 | |||||||||||||
1Q | 2Q | 3Q | ||||||||||||||
Quarterly operating income (mil. yen) | ||||||||||||||||
6,000 | 3,909 | 4,262 | 3,511 | |||||||||||||
4,000 | 3,501 | 3,670 | ||||||||||||||
3,286 | ||||||||||||||||
2,876 | ||||||||||||||||
2,273 | ||||||||||||||||
2,000 | 1,611 | |||||||||||||||
0 | ||||||||||||||||
2021 2022 2023 | 2021 2022 2023 | 2021 2022 2023 | ||||||||||||||
1Q | 2Q | 3Q | ||||||||||||||
(1) Hotel amenities business | Note: Results for FY2021 have been calculated using the same | 9 | ||||||||||||||
(2) YoY basis | (3) vs Dec. 2022 | revenue recognition standards as FY2022. |
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POLA ORBIS Holdings Inc. published this content on 30 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 October 2023 06:06:11 UTC.