Results for 1Q-3Q of Fiscal 2021: Supplementary Materials

11/01/2021 | 01:17am EDT

Third Quarter of Fiscal 2021 Supplementary Material

POLA ORBIS HOLDINGS INC.

Director

Finance, Legal & Administration,

PR, IR and CSR

Akira Fujii

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.

Highlights of Consolidated Performance
Segment Analysis
Forecasts for Fiscal 2021
Initiatives Going Forward & Appendices

Q3 Key Topics

Cosmetics Market

The overall size of the Japanese cosmetics market (including exports) continued to shrink
The impact of the rapid, nationwide spread of COVID-19 infections and the persistence of issues such as the state of emergency was evidenced in the Japanese market
The impact of COVID-19 and disasters, was temporarily apparent in the Chinese market during the third quarter, and the business environment and economic trends will require close monitoring going forward

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 revenue and income increased, with revenue growth mainly from	Medium-term Management
POLA overseas, although domestic storefront operations once again faced a	Plan Indicators (FY2021 Q3 YTD)
difficult business environment due to the impact of COVID-19	Overseas sales ratio	17.8%
 POLA domestic e-commerce and overseas sales continued to grow	（＋2.8ppt*）


 ORBIS revenue decreased, but skincare sales grew, and purchase per customer	Domestic e-commerce	27.7%
increased year on year	sales ratio	（＋3.8ppt*）

 Progressive amelioration of losses continued in overseas brands		*vs Dec. 2020

YoY Change in Consolidated Monthly Net Sales

(%)	Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep.

30
20
10
0
-10	Month by month
Cumulative total

The recovery in storefront operations came to a standstill from July onwards, due to the spread of COVID-19 infections across Japan, the prolonged state of emergency, and restrictions on the flow of people
Issues such as lockdowns and store shutdowns also occurred intermittently in Mainland China and Australia

Consolidated P&L Changes Analysis

Net Sales to Operating Income

	FY2020	FY2021	YoY Change
(mil. yen)	Q3 Results (YTD)	Q3 Results (YTD)	Amount	%


Consolidated net sales	125,814	131,164	5,349	4.3%

Cost of sales	20,504	20,582	78	0.4%

Gross profit	105,310	110,581	5,271	5.0%

SG&A expenses	96,087	98,340	2,252	2.3%

Operating income	9,222	12,241	3,018	32.7%

Key Factors

Consol. net sales Increased on a consolidated basis, with revenue growth mainly from POLA overseas, although storefront operations suffered the impact of COVID-19

	Cost of sales	Cost of sales ratio improved due to an increase in the contribution from POLA's high price range products
		Cost of sales ratio FY2020 Q3: 16.3% ⇒ FY2021 Q3: 15.7%
	SG&A expenses	Labor expenses: up ¥970 mil. YoY
		Sales commissions: down ¥1,682 mil. YoY

- Decreased due to lower commissions as a proportion of net sales
Sales related expenses: up ¥708 mil. YoY

Administrative expenses, etc.: up ¥2,255 mil. YoY
- Increased due to the expansion of POLA overseas and a reactionary increase after the transfer of some COVID-19 related expenses to extraordinary losses in the previous year
Operating income Operating margin FY2020 Q3: 7.3% ⇒ FY2021 Q3: 9.3%

Consolidated P&L Changes Analysis

Operating Income to Profit Attributable to Owners of Parent

			FY2020	FY2021	YoY Change

(mil. yen)	Q3 Results (YTD)	Q3 Results (YTD)	Amount		%

Operating income	9,222	12,241	3,018		32.7%
	Non-operating income	269	1,377	1,107		410.4%
	Non-operating expenses	1,716	186	(1,530)		(89.1%)

Ordinary income	7,775	13,432	5,656		72.8%
	Extraordinary income	763	372	(390)		(51.2%)
	Extraordinary losses	3,704	723	(2,980)		(80.5%)

Profit before income	4,834	13,081	8,247		170.6%
taxes

	Income taxes etc.	3,258	4,387	1,129		34.7%
	Profit attributable to	10	32	22		216.5%
	non-controlling interests


Profit attributable to	1,565	8,661	7,095		453.1%
owners of parent



	Key Factors


 Non-operating income:	Foreign exchange gain ¥1,108 mil.
 Extraordinary losses:	Loss related to COVID-19 ¥173 mil.
			（Breakdown: POLA ¥36 mil.	ORBIS ¥75 mil. ACRO ¥39 mil）
			[Reference] FY2020 Q3 breakdown: POLA ¥374 mil. ORBIS ¥501 mil. ACRO ¥293 mil.		4

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POLA ORBIS Holdings Inc. published this content on 01 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 November 2021 06:16:05 UTC.

POLA ORBIS HOLDINGS INC.

Results for 1Q-3Q of Fiscal 2021: Supplementary Materials

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