First Quarter of Fiscal 2022 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.

Regarding the results for fiscal 2021:

The results for fiscal 2021 presented 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.

  • 1. Highlights of Consolidated Performance

  • 2. Segment Analysis

  • 3. Forecasts for Fiscal 2022

  • 4. Initiatives Going Forward & Appendices

Q1 Key Topics

Cosmetics Market

  • The scale of the Japanese cosmetics market (including exports) as a whole recovered during the first half of the first quarter, but a slowdown emerged from February onward.

  • The Japanese market was at a similar level to the previous year, due to the rapid spread of COVID-19 and the application of quasi-emergency measures.

  • In the overseas market, Mainland China and Hong Kong suffered lockdowns and restrictions on storefront operations.

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 decreased, impacted by the performance

of POLA.

Medium-term Management Plan Indicators (FY2022 Q1)

  • In Japan, customer traffic continued to decline in POLA's consignment sales, but domestic e-commerce revenue grew for both POLA and ORBIS.

    Overseas sales ratio

    15.2% (-3.5 ppt*)

  • Revenue declined for POLA overseas, due to lockdowns, restrictions on storefront operations, and suppression on shipment to duty free stores in South Korea. (down ¥2.2 bil.)

    Domestic e-commerce sales ratio

    28.3% (+2.5 ppt*)

    *vs Dec. 2021

  • In overseas brands, revenue rose and losses were ameliorated for Jurlique. The dissolution and liquidation of H2O PLUS were decided effective April 28.

YoY Change in Consolidated Monthly Net Sales

(same-standard basis)

Month by month Cumulative total

  • In Japan, quasi-emergency measures were applied, and the recovery in domestic storefront operations came to a standstill.

  • Overseas operations suffered restrictions on the flow of people, an impact on logistics, store shutdowns, etc. due to lockdowns.

  • Net sales for the first quarter presented a grimmer result than anticipated.

Consolidated P&L Changes Analysis Net Sales to Operating Income

Key Factors

  • Consol. net salesDecreased on a consolidated basis, mainly due to a decrease in revenue from POLA.

  • Cost of sales

    Cost of sales ratio deteriorated due lower sales ratio from POLA.

    Cost of sales ratio 2021Q1 : 16.5% 2022Q1 : 18.1%

  • SG&A expenses

Labor expenses: up ¥162 mil. YoY

Sales commissions: down ¥1,293 mil. YoY Decreased due to lower POLA consignment sales. Sales related expenses: down ¥834 mil. YoY Administrative expenses, etc.: down ¥714 mil. YoY Decreased due to lower POLA overseas sales.

Operating income

Operating margin 2021Q1: 9.6% 2022Q1: 5.1%

Note: FY2021 Q1 results are presented for reference only (unaudited).

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POLA ORBIS Holdings Inc. published this content on 28 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 April 2022 06:14:38 UTC.