From a Leader in Japan to a Winner Worldwide Dec. 3 rd, 2015 Masahiko Uotani Representative Director, President & CEO Shiseido Group CEO
1 About Myself 2 Shiseido Overview 3 VISION 2020 2
My Learnings Brand value is an intangible asset, building total corporate value, sustainable growth and high ROE. 4
My Learnings Brand value is an intangible asset, building total corporate value, sustainable growth and high ROE. Key Success Factors Strategic marketing for consumer relationships Think Global, Act Local Diversity as the source of innovation Leadership to create high performance and a winning culture Execution! Execution! Execution! The world belongs to the discontented. But, I was going to enjoy my retirement in 5
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And, Decided to become CEO of Shiseido My mission & 覚悟 To make Shiseido into a leading global marketing company
1 About Myself 2 Shiseido Overview 3 VISION 2020 8
Shiseido Heritage Established as a pharmacy in 1872 9
Shiseido Company Mission To inspire a life of beauty and culture 10
Shiseido Business Portfolio Fragrances Foods Retail Healthcare Cosmetics Professional Restaurants 11
Shiseido Regional Portfolio Americas 133 Japan 366 Billions of yen FY Ended March 2015 Asia 55 Europe 109 China 115 Presence in 120 countries 53% of sales overseas 12
Shiseido as a Leading Japanese Company Japan 1 SHISEIDO 2 KANEBO 3 KOSE 4 POLA ORBIS 5 KAO Global 1 L ORÉAL 2 UNILEVER 3 P&G 4 ESTÉE LAUDER 5 SHISEIDO Source (Global):WWD BEAUTY INC S ANNUAL RANKING OF THE WORLD S BIGGEST BEAUTY COMPANIES (April 2015) (Japan):The Nikkei (August 13, 2015) 13
Shiseido Brands
What Has Made Shiseido Competitive Technology/Quality Won 23 IFSCC* Awards *the International Federation of Societies of Cosmetic Chemist 15
What Has Made Shiseido Competitive Omotenashi as consumer touch point 22,400 Beauty Consultants worldwide 16
What Has Made Shiseido Competitive CSR activities that are unique to Shiseido Women and Beauty Environment Culture 17
Challenges Regain Japan business growth Dramatically increase global business profitability 12 10 8 6 Market share 4 2 1980 2014 0-2 2010 2015 Japan Global (OP%) Rejuvenate Shiseido 18
1 About Myself 2 Shiseido Overview 3 VISION 2020 19
Understanding Real Issues 20
Key Issues Vicious cycle Sales decline Increase retail inventory Increase trade rebates (sell-in) Decline consumer sales (sell-out) Break the chain! Reduction of consumer A&P and R&D investments Weak brands/innovation 21
VISION 2020 Goal CAGR 5~7% A winner worldwide CAGR 3~5% Sales over 1 trillion Operating income over 100 bil. 2015 2020 22
VISION 2020 Roadmap 2015-2017 Rebuild Foundation 2018-2020 New Strategy to Accelerate Growth Regain Japan growth Structual reform for global profitability Brands via marketing and innovation Global organization Efficiency/ Cost reduction New brands via M&A Enter emerging countries Expand business portfolio Strong talent and leaders Keep delivering efficiency 23
Key Pillars of VISION 2020 Marketing Innovation BRAND VALUE People/Talent development 24
Japan Brand renewals/relaunches/rationalization Brand manager appointment Increased investment in consumer marketing Seamless organization 25
Restoring Growth Momentum In-store sales growth vs LY 1H 2014 2H 2014 April May June July Aug Sept Oct (%) 26
Capturing Inbound Demand Numbers of tourists (Jan-Sep 2015) 1. China 4.3 mil. +113% 2. Korea 3.2 mil. +44% 3. Taiwan 3.1 mil. +31% Contributing to growth of total revenue 27
Global Business Update in 2015 Working Strong prestige brands Asia/Travel Retail momentum Not working China local brands Unsustainable Bare Escentuals growth 28
China Business Reforms Cost reduction Brand portfolio BC/BA productivity Reengineer business Store sales focus Localization Digital marketing 29
Mega Trends Are Changing Consumer Lives Globalization Urbanization Informatization Passive Active Consumer 30
Digital Marketing and E-Commerce DM Center Of Exellence in NY Own website (watashi+)and web counseling Cross-border e-commerce 31
Strengthening Digital Communication with Young Consumers Video posted on YouTube High School Girl? The Secret of Make Up High School Girls 32
Travel Retail Opportunities Increase duty-free counters and BC Airport advertising and promotion Dedicated product development 33
Expand Marketing Investment Cumulative increase of more than 100 billion over three years Increase brand value 2014 2015 2016 ~ 2017 2020 34
Strengthen R&D Capabilities # of researchers: from 1,000 to 1,500 R&D investment: from 1.8% to 2.5% Europe China Japan America s Global Innovation Center Southeast Asia 35
Structural Reform to Decrease Costs (Billions of yen) 15.0-18.0 2.5-5.0 6.0-8.0 6.0-8.0 Europe China Japan Americas 0.5-1.0 Asia Generate 30-40 billion in 2017, compared with 2014 36
Matrix Organization to Achieve Think Global, Act Local 37
Global Centers of Excellence Fragrance Europe Drive category innovation Makeup/Color Americas Japan Skincare Digital 38
Diversity to Build Management Capability 39
Global Management Team President and CEO, Shiseido Europe, the Middle East and Africa Louis Desazars President and CEO Shiseido Group CEO Masahiko Uotani President, Shiseido Japan Toru Sakai President and CEO, Shiseido Americas Marc Rey President, Shiseido Asia Pacific Jean-Philippe Charrier President, Shiseido Global Travel Retail Philippe Lesne 40
覚悟 Strong dedication and commitment 41
In this document, statements other than historical facts are forwardlooking statements that reflect our plans and expectations. These forwardlooking statements involve risks, uncertainties and other factors that may cause actual results and achievements to differ from those anticipated in these statements.