Financial Overview for First Half of Fiscal 2011 Fiscal Year Ending March 31, 2011

Transcription

1 Financial Overview for First Half of 211 Year Ending March 31, 211 October 29, 21 Yutaka Kobayashi President and Chief Operating Officer KOBAYASHI PHARMACEUTICAL CO., LTD.

2 Highlights of Q2 Consolidated Results Q2 21 Q2 211 Change Amount Profit ratio Amount Profit ratio Amount Percentage Net sales millions of yen 63,76 - % millions of yen 64,249 - % millions of yen 489 %.8 Gross profit 36, , Operating income 9, , Ordinary income 9, , , Net income 5, , EPS (Yen) In addition to growth in sales of main brands with high profit margins, cost reductions and efficient use of marketing expenses in the production department contributed to the improvement in profit ratios (.9 point improvement in operating income). 2

3 Consolidated Operational Results of yen) 1,5 1, Consolidated Net Sales.8% of yen) (%) Consolidated Operating Income Operating income Operating income ratio % (Notes) (1) Wholesale business was excluded from consolidation in Q4 28. (2) Adoption of new accounting standards (recording loss on inventory evaluation and scrapping as sales cost) in fiscal 29 affected income. 3

4 Changes in Segment Information 1. Addition of new mail-order business Three businesses Þ Four businesses (Note) Inter-segment sales are included in Consumer Product Businesses Former structure Consumer Products Business Pharmaceutical products New structure Consumer Products Business Pharmaceutical products Oral hygiene products Sanitary products Deodorizing air fresheners Household sundries Food products Body warmers Oral hygiene products Sanitary products Deodorizing air fresheners Household sundries Foods (store sales) Body warmers Medical Devices Business Other Businesses Mail order business Medical Devices Business Other Businesses 2. Ordinary income of each business segment is disclosed, instead of operating income. 4

5 Consumer Products Business 5

6 Net Sales and Operating Income of yen) Net sales % decrease (Real %) %).6% of yen) Operating Income Operating income Operating income ratio % (Real %) %) 4.3% (%) From fiscal 211, Mail Order Business sales are disclosed separately from Consumer Products Business..6% on an actual basis Operating income d, supported by growth in sales of high-profit-rate brands and efficient use of advertising expenses. 6

7 Sales by Category Pharmaceutical products Pharmaceutical products % Oral hygiene products Oral hygiene products Sanitary products Sanitary products Deodorizing air fresheners Deodorizing air fresheners Household sundries Household sundries % % 21.% decrease % Food products Food products Body warmers Body warmers % 36.4% decrease Growth in main categories (Pharmaceutical products, oral hygiene products and deodorizing air fresheners) Sales decrease in sanitary products was affected by last year s new-type H1N1 flu. Some portions of food products were transferred to Mail-Order Business. of yen) 7

8 Contribution by New Products Non-Consolidated No. of items 5 New Products First Year 4th Year %

9 New Pharmaceutical Products 21 Autumn Kobayashi s first Class-1 pharmaceutical product Feminina Vaginal Candida Tablet (Class 1 Pharmaceutical Product) (1) Various promotional tools (such as Self Check Sheet, QR code, explanation materials for pharmacists) (2) Proposals for feminine delicate zone care (3) Promotional card-hanging at female sanitary product shelves 9

10 New Deodorizing Air Fresheners 21 Autumn Shoshugen Aroma & Stick Fran Entry of large manufacturers led to market expansion Year-end sales promotion by marketing power, advertising and consumer-oriented campaign 1

11 Production Cost Reduction Efforts Cost reduction efforts 5 Raw material price 1 Net cost reduction Full year forecast for fiscal 211 Cost reduction efforts ( 1.3 billion) Raw material price (.5 billion) of yen) = Net cost reduction of.8 billion Raw material price s had negative impact on Production Dept. (such as production cost of plastic containers). However, cost reduction of.4 billion will be achieved through cost reduction efforts in the areas of productivity improvement, specification modification and inhouse production etc. 11

12 Achieving Profits in Product Business Overseas of yen) Net sales % of yen) 5-5 Operating Income (Loss) *After goodwill amortization 1 Operating income Forecast Body warmer sales were strong in the U.S. and China. Operating income is expected to be achieved after goodwill amortization Forecast 12

13 Full Year Forecasts for Net Sales and Operating Income (on actual basis) of yen) 1,5 1, 1,94 Net sales 3.3% 1,13 of yen) 2 15 Operating Income % Forecast Forecast 13

14 Mail-Order Business 14

15 Mail-Order Business s Marketing Efforts Key to Growth Increasing customer numbers and Web-based marketing <Main products> of yen) Net sales % 6 4 <Newspaper advertising, member news magazine and Web-based marketing> Forecast 15

16 Full Year Forecasts for Net Sales and Operating Income (on actual basis) Net sales of yen) of yen) 12 16% 6 3 Operating Income 4 Operating income Forecast Forecast 16

17 Medical Devices Business 17

18 Net Sales and Operating Income 1 Net sales of yen) of yen) 6 Operating Income % % Kobayashi Medical has continued concentration strategy in core business areas and sold Shield Healthcare in fiscal 28, during which its sales expanded Operating income will supported by sales growth in Japan and strict cost management. 18

19 Net Sales of Medical Devices Business of yen) Sales by department % of yen) Sales of Kobayashi Medical by business domain % 2.4% decrease % decrease % decrease 6 Kobayashi Medical ev Other Sales by Kobayashi Medical (Japan) were strong, while sales of new products by ev were weak. Operating Room Orthopedics Cerebral surgery/otolaryngology Selection and concentration were implemented in core business domains (operating room and orthopedics). Sales growth was achieved only in operating room domain. 19

20 Full Year Forecasts for Net Sales and Operating Income of yen) Net sales % Forecast of yen) 4 2 Operating Income % Forecast 2

21 Forecasts for 211 and Future Management Strategy 21

22 Consolidated Result Forecasts Change Amount Profit ratio Amount Profit ratio Amount Percentage Net sales millions of yen 129,184 - % millions of yen 134, - % millions of yen 4,816 % 3.7 Gross profit 71, , , Operating income 17, , Ordinary income 17, , , Net income 9, , EPS (Yen) During the six months ended September 3, 21, we have achieved higher profits than originally forecast. However, since uncertainties remain in business conditions, such as consumers money-saving and conservative spending lifestyle, we have made no modifications in the full-year operational result forecasts. 22

23 Future Management Strategy 1. Strengthen the Healthcare Business Investment in development of Chinese medicines and Switch-OTC drugs 2. Expand overseas businesses Expansion of sales channels and new product introduction in China and Southeast Asia 3. Expand mail-order business Investment in advertising and use of Web-based marketing to customer numbers 4. Application of internal reserves M&As and returns to shareholders 23

24 You make a wish and we make it happen