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02 17 13 Shiseido Results Q3 2

02 17 13 Shiseido Results Q3 2

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Copyright©2013 Shiseido Co., Ltd. All Rights Reserved.No reproduction without permission.
First Three QuartersResults and Outlook 
2013-1-31
SHISEIDO Co., Ltd.FY2012
In this document, statements other than historical facts are forward-lookingstatements that reflect our plans and expectations. These forward-lookingstatements involve risks, uncertainties, and other factors that may cause actualresults and achievements to differ from those anticipated in these statements.
z
I will be reviewing Shiseido’s results for the first three quarters of fiscal year 2012 and explain ouroutlook for the full year.
Copyright©2013 Shiseido Co., Ltd. All Rights Reserved.No reproduction without permission.
First Three Quarters Results (Ended December 2012)
(Billion yen)
ResultsYoY%ChangeLocal CurrencyYoYAmounNet Sales
484.8-1.2%+0.5%-5.9
Domestic 
272.7-2.6%-2.6%-7.4
Overseas
212.1+0.7%+4.7%+1.
Operating Income
9.2-65.8%-61.9%-17.
Ordinary Income
10.1-62.6%-16.9
Net Income
4.6-21.0%-1.
z
Overseas Sales Ratio43.8%(+0.9 pp)
z
Operating Margin1.9%(-3.6 pp)
z
Exchange Rate1 US$ = ¥79.4 (-2%) 1 €= ¥101.8 (-10%) 1 RMB = ¥12.6 (+1%)
z
Let’s begin with a summary of the statement of income.
z
During the nine months ended in December 2012, consolidated net sales declined 1.2% over the same period last year, to 484.8billion yen.
z
Domestic sales for the nine months ended in December 2012 declined 2.6% year on year, to 272.7 billion yen, because both over-the-counter sales and shipment in the domestic cosmetics business were at the previous year’s level in the third quarter.Withregard tooverseas, sales in China for the third quarter declined around 10% year on year, given the impact of the anti-Japanesedemonstrations. Overseas sales for the nine months ended in December 2012 rose 4.7% in local currency terms and 0.7% in yen, to212.1 billion yen.
z
Operating income fell 65.8% compared to last year to 9.2 billionyen. The decline is attributed to a decrease in gross profit due to thedecline in domestic sales and an increase in investments in sales counters and advertisements in Japan and overseas.Withthedecrease in operating income, ordinary income fell 62.6% year onyear, to 10.1 billion yen and net income dropped 21.0%, to 4.6billion yen.
z
For results such as sales by business and sales by geographic segment, please refer to the attachments.
 
3
Copyright©2013 Shiseido Co., Ltd. All Rights Reserved.No reproduction without permission.
Outlook for FY2012 
(Billion yen)
ForecastYoY% ChangeLocal Currency 
Difference fromOct. 31 Forecast 
Net Sales
680.0-0.3%+0%-20.
Domestic 
376.0-1.0%-1%-6.
Overseas
304.0+0.5%+1%-14.
Operating Income
24.5-37.4%-15.
Ordinary Income
25.5-35.3%-14.
Extraordinary Income/Loss
-7.0(-0.5)-5.
Net Income
10.5-27.7%-11.
z
Overseas Sales Ratio44.7%(+0.4 pp)
z
Operating Margin3.6%(-2.1 pp)
z
Exchange Rate1 US$ = ¥79.8 (+0%) 1 €= ¥102.6 (-8%) 1 RMB = ¥12.7 (+3%)
*The figure in parentheses is the amount in the previous fiscal year.
 
z
Next, I will explain our outlook for the full year.
z
We revised down our forecasts for full-year sales and income. Mainly, the impact of the decline of sales in Japan for the third quarter and the sales decline in overseas countries where the fourthquarter has already ended was factored into the latest forecast.
z
We have adjusted our consolidated net sales forecast downward by20 billion yen from our previousforecast, to 680.0 billion yen, which is 0.3% less than the previous year’s result.
z
Looking at domestic sales, we have revised down the forecast by 6.0 billion yen. This is becauseshipments in the cosmetics business in the third quarter were below plan, partly due to the increasein the returned goods. In addition, although we will expect highgrowth in the fourth quarter due tothe increase in merchandise, decline of store inventory will be promoted.
4
Copyright©2013 Shiseido Co., Ltd. All Rights Reserved.No reproduction without permission.
Domestic Cosmetics Third Quarter Review The head office and sales subsidiary united to focus onbolstering over-the-counter salesStrengthened counter activities and sales spaceenhancement Introduced carefully- selected new productsDeveloped existing mainstay products
Line
ELIXIR 
,
cléde peauBEAUTÉ 
,
 AQUALABEL
, and
INTEGRATE 
remained strong.ChannelSales grew primarily through department stores and drugstores.
z
We continued to focus solely on bolstering over-the-counter sales in the third quarter. Wecontinued to strengthen counter activities and sales space enhancement, introduce carefullyselected new products, and develop existing mainstay products.
z
As a result of these efforts,
ELIXIR 
and
cléde peauBEAUTÉ 
in the Counseling category, and
 AQUALABEL
and
INTEGRATE 
in the Self-Selection category, remained firm.
z
As for channels, store sales via department stores and drugstores continued to do well. As aresult, over-the-counter sales for the third quarter were on a par with the levelof the previousyear. In December, in particular, store sales increased mainly in the Counseling category andexceeded the previous year’s level by around 1%.
 
Copyright©2013 Shiseido Co., Ltd. All Rights Reserved.No reproduction without permission.
Domestic Cosmetics Initiatives from Fourth Quarter Strengthening foundation
MAQuillAGETrue Powdery UV 
Launching limited-sales itemsfrom
d program
and
INTEGRATE 
Shiseido
HAKU MelanofocusCR BENEFIQUE THEOTY 
(point makeup series)
Innovation of 
TSUBAKI 
Proposing a new cosmetic habit Reinforcing brightening lines and linesfor cosmetics specialty stores
FullmakeWashable Base
z
In the fourth quarter, we will launch strong new products and limited-sales items with a focus onlines in the foundation category, which we must strengthen, including
MAQuillAGE, d program
, and
INTEGRATE 
. In addition, we will also improve the ingredients of 
HAKU,
a brightening essence.
z
Further, we will undertake the greatest innovation of 
TSUBAK 
I since its launch in 2006, We will alsostart over-the-counter-sales of the
FullmakeWashable Base
, which suggests a new cosmetics habit.We launched this product via watashi+ in December 2012 and it is highly acclaimed by customers.
z
Consequently, in the fourth quarter, we will strengthen our measures in all aspects, namely in termsof the sales space, counter activity, and products, so as to putthe recovery in the third quarter ontrack. We will thus aim to achieve growth and further enhance our growth potential in fiscal 2013.
Copyright©2013 Shiseido Co., Ltd. All Rights Reserved.No reproduction without permission.
Global Fourth Quarter 
Overseas sales forecast revised down ¥14.0bn from figureannounced in October 
Sales declined more than expected in China. Sales were sluggish in Europe.
Forecast for China at the end of October 
Sales in1st half (Result)
z
Rose by mid-10% yearon yearSales in2nd half (Forecast)
z
Would rise in the mid-single digits year onyearSales infull year(Forecast)
z
Would increase around10% year on year
z
Next, looking at overseas sales, we revised down our forecast by14.0 billion yen from the figure weannounced in October. Overseas sales in the fourth quarter declined significantly because theimpact on sales stemming from the anti-Japanese demonstrations in China was greater than we hadexpected and we were subject to the impact of the economic slowdown, mainly in Europe.
z
As of the end of October, we expected sales in China for the second half of the year to achieve mid-single digit growth year on year, and full year sales in the country were expected to grow around10%.Until the first half of the current fiscal year, China had been the growth engine of our sales, withpercentage growth in sales in the mid-teens. Although shipments declined in the third quarter due tothe impact of the anti-Japanese demonstrations, we assumed that sales would begin to recover byDecember, which is the peak shopping season.

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