Pola Orbis Net Sales Climb Nearly 5%

Pola Orbis Holdings shared its consolidated summary of financial results for the first half of the fiscal year ending December 31, 2014. The company saw net sales for the time period of ¥95.9 billion, 4.9% increase over ¥91.4 billion during the same time period in 2013. Operating income was ¥8.3 billion, a 32.1% increase, while ordinary income was ¥8 billion (+9.7%) and net income was ¥3.7 billion (+8.8%).

During the first half of fiscal 2014 (January 1–June 30, 2014), the Japanese economy recovered modestly, amid government economic measures and monetary policies that improved the employment and income climates, while improvement was also seen in some areas of personal consumption which had weakened in a recoil against the surge in demand ahead of the consumption tax hike. Despite uncertain prospects because of downside risks from an economic slump overseas and other factors, the Japanese economy looks set to continue recovering owing to the impacts of government policies. The domestic cosmetics market improved overall as a result of the momentum of a recovery in the Japanese economy. The overseas cosmetics market continued to expand steadily despite economic slowdowns in China and elsewhere in Asia. It was within this market environment that the Pola Orbis Group endeavored to strengthen its domestic earnings structure, accelerate overseas development, and increase corporate value by improving capital efficiency in keeping with a three-year medium-term management plan started in the current fiscal year.

For the six months ended June 30, 2014, the company’s beauty care division saw net sales of ¥89.4 billion, a 4.8% increase over the same time period in 2013. The beauty care divsion consists of the flagship brands Pola and Orbis; the brands under development—PDG, Future Labo, Orlane, Decencia, and Three; and the overseas brands Jurlique and H2O Plus. With regard to the impact of the consumption tax hike on domestic brands, although there was a surge in demand in advance of the increase and a recoil afterwards, countermeasures showed definite effects and results for the first half of fiscal 2014 surpassed those recorded in the corresponding period of the previous year.

Pola is making concerted efforts to boost customer satisfaction. These include increasing customer contact points by aggressively developing sales channels through Pola The Beauty stores, which integrate sale of cosmetics, consulting and esthetic treatments, and through department store outlets; and further enhancing Pola’s sales-process quality and consulting skills. Overseas markets grew steadily as department store operations attracted more new and existing customers in China, its key market. As a result, Pola recorded net sales above those recorded in the corresponding period of the previous year.

Orbis efforts are to improve a skin care-focused product strategy, reinforce online sales, and leverage new infrastructural systems to evolve customer communications while enhancing the efficiency of sales promotions. In the domestic market, Orbis=U, a new skin care series that embodies the new concept of OIL-FREE skincare, was launched in February as a key product strategy of brand rebuilding, and both per-capita spending and customer numbers have grown steadily. In overseas markets, Orbis has continued sales promotion activities to increase brand awareness. As a result, it exceeded the net sales of the corresponding period of the previous year.

Meanwhile, as a result of strong business growth centered on Three and Decencia, sales of brands under development were up from a year earlier.

For overseas brands, the company endeavored to maintain high expansion and contribute to revenues and earnings, focusing on Asia as a growth driver. Jurlique expanded its business centered on the Chinese and Australian markets, and sales increased year on year. Sales declined from the previous year for H2O Plus, reflecting poor sales in the Chinese market.

As a result of the factors noted above, net sales—sales to external customers—were ¥89.4 billion, up 4.8% year on year, and operating income was ¥7.7 billion, up 36.3% year on year.

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