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Pola Orbis Posts 8.5% Sales Increase for 2012

Posted: February 14, 2013

Pola Orbis Holdings Inc. released its operating results for fiscal 2012, noting that consolidated net sales for fiscal 2012 grew 8.5% year on year, to ¥180 billion, partly reflecting firm domestic sales centering on the Pola-brand business and the inclusion of earnings from Jurlique International Pty. Ltd., which was acquired in February 2012. On the profit front, although the company recorded goodwill related expenses and other acquisition costs arising from its purchase of Jurlique International Pty. Ltd., due to the aforementioned increase in Pola sales and to improved profitability from the Orbis rebranding, operating income rose 5.2% year on year to ¥13.5 billion, and ordinary income rose 9.6% year on year to ¥14.6 billion. Net income shrank 16.9% year on year to ¥6.68 billion, due to higher income taxes caused by an increase in taxable domestic income offsetting a large reduction in extraordinary losses from the corresponding period of the previous year.

For Pola Orbis’ beauty care segment—which consists of the flagship brands Pola and Orbis; brands under development PDC, Future Labo, Orlane, Decencia and Three; and  overseas brands H2O Plus and Jurlique— net sales for 2012 reached ¥168.8 billion, edging up 9.1%, while operating income totaled ¥11.8 billion, up 9.5% year on year.

In the Pola-brand business, the group is not only aggressively developing sales channels through department store outlets and Pola the Beauty stores, which integrate cosmetics, consulting and esthetic treatments, but also endeavoring to increase contacts with customers through expansion of the door-to-door sales system. In addition, the group is striving to further enhance its sales techniques and consulting skills in order to boost customer satisfaction. In the Japanese market, the group introduced new products, utilized its skin analysis technology and rolled out a campaign using its Apex-i Custom-Tailored Skincare Cosmetics. In overseas markets, the group implemented measures to promote business growth, including the expansion of its sales organization in Thailand. As a result of the above, the performance of the Pola-brand business surpassed that in the corresponding period a year earlier.

In the Orbis-brand business, the group strove to improve profitability through various efforts that included increasing the rate of repeat purchases, renewing skin care cosmetics products, bolstering Internet sales, and streamlining sales costs. Within the Japanese market, the company introduced the “Oil-free ha-da” (oil-free brand) declaration as its new brand statement, and in September launched the new Aqua Force Extra line appealing to customers with new added value due to its oil free properties. Furthermore, the group worked to strengthen its delivery services by launching uniform nationwide next-day delivery using a dual-site logistics system with distribution centers in both East and West Japan. In the overseas market, the group focused on promotional activities in China and implemented other measures to increase brand awareness. As a reflection of the above, the Orbis-brand business generated results on a par with those in the previous year.

Sales of brands under development and overseas brands also exceeded the last fiscal year figures. This reflected expanding domestic sales of Three and Decencia, an Asia-centered expansion of the H2O Plus brand, and the inclusion of earnings from the Jurlique brand.

In regard to its outlook for fiscal 2013, while some uncertainty still remains, Pola Orbis finds bright signs for the Japanese economic situation to be apparent. These include the improvement in the overseas economy, which has been due to the economic recoveries in China and the U.S., and the expectations of an escape from the prolonged deflation, which have arisen from monetary easing policies at the initiative of the new government. In this situation, based on its corporate philosophy of “Inspire all people and touch their hearts,” the group will continue to work on its main strategic goals in its medium-term management plan, which are to “improve the profitability of flagship brands and further promote the multi-brand strategy,” to “increase growth potential through global business expansion (overseas expansion by leveraging the Group’s strengths),” and to “reinforce the operating structure.” Through these activities, the Group will aim to achieve its consolidated earnings targets.

For the fiscal year ending December 31, 2013, Pola Orbis forecasts, on a consolidated basis, net sales of ¥188.5 billion, up 4.2% year on year; operating income of ¥16 billion, up 18.3%; ordinary income of ¥16.3 billion, up 11.6%; and net income of ¥8.2 million, up 22.7% year on year.

Find more details on Pola Orbis Holdings’ fiscal 2012 results here.