Consolidated Settlement of Accounts for the First Quarter Ended June 30, 2009

Transcription

1 The figures for these Financial Statements are prepared in accordance with the accounting principles based on Japanese law. Accordingly, they do not necessarily match the figures in the Annual Report issued by the Company, which present the same statements in a form that is more familiar to foreign readers through certain reclassifications or summarization of accounts. Consolidated Settlement of Accounts for the June 30, 2009 Shiseido Company, Limited Listing: Tokyo Stock Exchange, First Section (Code Number: 4911) URL: Representative: Shinzo Maeda, President/CEO & Representative Director Contact: Yukihiro Saito, General Manager of Investor Relations Department Tel Filing of Quarterly Financial Report: August 7, 2009 Start of Cash Dividend Payments: 1. Performance for the (From April 1 June 30, 2009) * Amounts under one million yen have been rounded down. (1) Consolidated Operating Results (Millions of yen; percentage figures denote year-on-year change) Net Sales Operating Income Ordinary Income June 30, ,686 [ 14.9%] 2,108 [ 82.8%] 3,030 [ 78.5%] June 30, ,107 [ ] 12,229 [ ] 14,069 [ ] Net Income Net Income per Share (Yen) Fully Diluted Net Income per Share (Yen) June 30, ,323 [ 57.8%] June 30, ,255 [ ] (2) Consolidated Financial Position (Millions of yen; except for per share figures) Net Assets Total Assets Net Assets Equity Ratio (%) per Share (Yen) June 30, , , Fiscal Year Ended March 31, , , [Reference] Equity: First quarter ended June 30, 2009: 331,946 million Fiscal year ended March 31, 2009: 337,224 million

2 2. Cash Dividends Cash Dividends per Share (Yen) (Cut-off Date) First Quarter Second Quarter Third Quarter Year-End Full Year Fiscal Year Ended March 31, Fiscal Year Ending March 31, 2010 Fiscal Year Ending March 31, 2010 (plan) Note: Revision to quarterly dividend forecast: None 3. Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2010 (From April 1, 2009 March 31, 2010) (Millions of yen, percentage figures denote year-on-year change) Second Quarter Ending September 30, 2009 Fiscal Year Ending March 31, 2010 Net Sales Operating Income Ordinary Income Net Income Net Income per Share (Yen) 315,000[ 12.4%] 20,000 [ 41.0%] 21,000 [ 42.2%] 14,000 [ 30.3%] ,000 [ 5.8%] 50,000 [+0.2%] 51,000 [ 2.0%] 30,000 [+54.9%] Note: Revision to consolidated earnings forecast during period under review: Yes For more detail, refer to 3. Consolidated Forecasts (page 4). 4. Other (1) Significant changes in subsidiaries (scope of consolidation) during period: None (2) Simplified accounting treatment or special accounting treatment for preparation of quarterly consolidated financial statements: Yes Note: For more details, refer to 4.Other information (page 4). (3) Changes in accounting principles, procedures, disclosure methods, etc., pertaining to preparation of quarterly consolidated financial statements (Those to be stated as Changes to the Basis of Presenting Quarterly Consolidated Financial Statements ): 1. Changes associated with revision in accounting standards: None 2. Other changes: None (4) Shares outstanding (common stock) at term-end 1. Number of shares outstanding (including treasury stock) First quarter ended June 30, 2009: 410,000,000 Fiscal year ended March 31, 2009: 410,000, Number of treasury shares outstanding First quarter ended June 30, 2009: 12,500,171 Fiscal year ended March 31, 2009: 8,489, Average shares outstanding over period (cumulative; consolidated) First quarter ended June 30, 2009: 398,820,136 First quarter ended June 30, 2008: 404,261,265 Appropriate use of business forecasts; other special items In this document, statements other than historical facts are forward-looking statements that reflect the Company s plans and expectations. These forward-looking statements involve risks, uncertainties and other factors that may cause our actual results and achievements to differ from those anticipated in these statements. Please refer to 3. Consolidated Forecasts on page 4. 2

3 [Operating Results] 1. Analysis of Operating Results Consolidated Performance June 2009 Year-on-Year Increase/Decrease June 2008 Amount % change Domestic Cosmetics Overseas Cosmetics Others 90,429 46,860 2,396 96,172 63,213 4,721 5,743 16,352 2, % 25.9% 49.3% Net Sales 139, ,107 24, % Domestic Sales 92, ,678 7, % Overseas Sales 46,988 63,429 16, % Operating Income 2,108 12,229 10, % Ordinary Income 3,030 14,069 11, % Net Income 4,323 10,255 5, % In the first quarter under review (three-month period from April 1 to June 30, 2009), consumer sentiment continued to weaken, causing market conditions in the domestic cosmetics industry to remain difficult. Overseas, the cosmetic markets in Europe and the Americas were affected by the economic recession, resulting in weak conditions overall. (For overseas subsidiaries, the first quarter refers to the period from January 1 to March 31, 2009.) Facing these challenges, the Shiseido Group sought to realize its vision to become a global player representing Asia with its origins in Japan. To this end, we promoted our three-year business plan aimed at raising the quality of all activities. Expecting that market conditions will remain difficult through the fiscal year ending March 2010, we are stepping up distinction and concentration to improve our competitiveness and profitability. For the quarter, consolidated net sales amounted to 139,686 million, down 14.9% from the previous corresponding period. The Domestic Cosmetics business segment posted a year-on-year sales decline due to intensified competition amid ongoing weakness in consumer sentiment, as well as the impact of inventory adjustments in the retail sector. The Overseas Cosmetics business segment reported a significant fall in sales, due to revenue declines in Europe and the Americas, which were heavily affected by the economic recession, coupled with the negative impact of the yen s appreciation. This was despite a solid performance in Asia, centering on China. Operating income fell 82.8%, to 2,108 million, and ordinary income dropped 78.5%, to 3,030 million, due to a fall in marginal income accompanying the decrease in net sales. The Company reported extraordinary losses, including impairment losses on domestic subsidiary, but this was partially offset by a decline in the tax burden. Accordingly, net income for the quarter totaled 4,323 million, down 57.8% from the previous corresponding period. 3

4 2. Consolidated Financial Position Compared with the previous fiscal year-end (March 31, 2009), total assets declined 24,333 million, but the decrease in net assets was limited to 3,778 million. Accordingly, the equity ratio at the end of the period was 57.0%, compared with 55.6% at the previous fiscal year-end. [Consolidated Cash Flows] Net cash provided by operating activities amounted to only 467 million. This was due mainly to income before income taxes, which was limited to 126 million. Net cash used in investing activities totaled 12,677 million, due mainly to capital investments for the purposes of equipment and facility maintenance and renewal. Net cash used in financing activities was 14,363 million, due mainly to 9,427 million in cash dividends paid and 6,788 million in acquisition of treasury stock. As a result, cash and cash equivalents at end of period stood at 65,863 million, down 25,993 million from March 31, Consolidated Forecasts In light of its performance in the quarter under review, including net sales and other income/expenses, the Company has revised its previous consolidated earnings forecast for the two-quarter period ending September 30, 2009 (previous forecast announced on April 30, 2009). Specifically, we forecast consolidated net sales of 315 billion (compared with our previous prediction of 320 billion), operating income of 20 billion (down from 22 billion), ordinary income of 21 billion (down from 22 billion), and net income of 14 billion (down from 15.5 billion). We have not changed our full-year forecasts of consolidated net sales and operating income. We forecast ordinary income of 51 billion (up from 50 billion), and net income of 30 billion (down from 31 billion). 4. Other Information (1) Significant changes among subsidiaries (scope of consolidation) during period Not applicable. (2) Simplified accounting method or special method for preparing quarterly consolidated financial statements adopted (Simplified Accounting Method) 1) Valuation of inventory assets The value of inventories at the end of the quarter under review is calculated using a rational method, based on physical inventories at the end of the previous fiscal year, rather than physical inventories at the end of the quarter under review. The Company has reduced the book price of certain inventory assets that were clearly deemed to be declining in profitability, after estimating the net selling value of such assets. 2) Depreciation of fixed assets For fixed assets that are depreciated using the declining-balance method, the depreciation expense is computed by the proportional distribution of the depreciation expense for the fiscal year. (Special accounting treatment for preparing quarterly consolidated financial statements) Not applicable. 3) Differences in accounting methods compared with most recent fiscal year Not applicable. 4

5 5. Consolidated Quarterly Financial Statements (1) Consolidated Balance Sheets Shiseido Co., Ltd. (4911) Financial Results for the June 2009 Fiscal Year Ended March 2009 ASSETS Current Assets: Cash and Time Deposits 54,902 57,411 Notes and Accounts Receivable 84, ,019 Short-Term Investments in Securities 32,452 47,343 Inventories 74,315 68,330 Deferred Tax Assets 27,853 26,228 Other Current Assets 18,726 16,696 Less: Allowance for Doubtful Accounts (1,039) (1,034) Total Current Assets 291, ,995 Fixed Assets: Property, Plant and Equipment: Buildings and Structures 160, ,018 Accumulated depreciation (94,413) (92,670) Buildings and Structures (net of depreciation) 66,529 68,348 Machinery, Equipment and Vehicles 83,271 81,888 Accumulated Depreciation (71,643) (70,287) Machinery, Equipment and Vehicles (net of depreciation) 11,628 11,601 Fixtures and Fittings 48,592 47,002 Accumulated Depreciation (34,646) (33,333) Fixtures and Fittings (net of depreciation) 13,946 13,668 Land 37,725 38,184 Leased Assets 10,519 10,839 Accumulated Depreciation (4,829) (5,545) Leased Assets (net) 5,689 5,294 Construction in Progress 2,227 1,136 Total Property, Plant and Equipment 137, ,232 Intangible Assets: Goodwill 13,151 12,197 Leased Assets Other Intangible Assets 23,399 22,999 Total Intangible Assets 36,810 35,405 Investments and Other Assets: Investments in Securities 36,368 33,929 Prepaid Pension Expenses 32,955 34,359 Long-Term Prepaid Expenses 10,029 11,313 Deferred Tax Assets 12,691 12,092 Other Investments 24,416 24,466 Less: Allowance for Doubtful Accounts (210) (227) Total Investments and Other Assets 116, ,934 Total Fixed Assets 290, ,572 Total Assets 582, ,568 5

6 June 2009 Fiscal Year Ended March 2009 LIABILITIES Current Liabilities: Notes and Accounts Payable 46,240 52,713 Short-Term Debt 5,932 3,709 Commercial Paper 1, Bonds Redeemable within One Year 20,000 20,000 Current Portion of Long-Term Borrowings Lease Obligations 2,331 2,273 Accrued Amount Payable 40,796 47,005 Accrued Income Taxes 4,041 5,306 Reserve for Sales Returns 9,691 11,061 Accrued Bonuses for Employees 3,097 9,563 Accrued Bonuses for Directors and Corporate Auditors Provision for Liabilities and Charges Deferred Tax Liabilities 4 8 Other Current Liabilities 18,247 20,082 Total Current Liabilities 154, ,097 Long-Term Liabilities: Long-Term Borrowings 31,545 31,110 Lease Obligations 3,711 3,340 Accrued Retirement Benefits 39,105 39,271 Allowance for Loss on Guaranties Deferred Tax Liabilities 2,707 3,821 Other Long-Term Liabilities 2,636 2,625 Total Long-Term Liabilities 80,056 80,519 Total Liabilities 234, ,617 NET ASSETS Shareholders Equity: Common Stock 64,506 64,506 Capital Surplus 70,258 70,258 Retained Earnings 239, ,544 Less: Treasury Stock (23,604) (16,839) Total Shareholders Equity 350, ,469 Valuation, Translation Adjustments and Others: Unrealized Gains on Available-for- Sale Securities, Net of Taxes 1, Foreign Currency Translation Adjustments (20,839) (26,599) Total Valuation, Translation Adjustments and Others (19,038) (26,245) Stock Acquisition Rights Minority Interests in Consolidated Subsidiaries 15,946 14,471 Total Net Assets 348, ,951 Total Liabilities and Net Assets 582, ,568 6

7 (2) Consolidated Quarterly Statements of Income June 2008 June 2009 Net Sales 164, ,686 Cost of Sales 37,894 33,375 Gross Profit 126, ,311 Selling, General and Administrative Expenses 113, ,202 Operating Income 12,229 2,108 Other Income Interest Income Dividend Income Equity in Earnings of Affiliates 9 7 Foreign Exchange Gain Others Total Other Income 2,707 1,627 Other Expenses Interest Expense Sales Discounts Other Total Other Expenses Ordinary Income 14,069 3,030 Extraordinary Income Gain on Sales of Property, Plant and Equipment Gain on Revaluation of Investments in Securities 30 Total Extraordinary Income Extraordinary Losses Impairment loss 266 2,766 Loss on Disposal of Property, Plant and Equipment Loss on Revaluation of Investments in Securities 9 17 Loss on Revaluation of Capital Subscriptions 14 Restructuring Expense 158 Effect of Application of Accounting Standards for Leased Assets 215 Loss on Cancellation of Lease Obligations 3 24 Total Extraordinary Losses 800 2,969 Income before Income Taxes 13, Income Taxes Current 5,499 (644) Income Tax Deferred (3,389) (4,287) Total Income Taxes 2,109 (4,932) Minority Interests in Earnings of Consolidated Subsidiaries Net Income 10,255 4,323 7

8 (3) Consolidated Quarterly Statements of Cash Flows June 2008 June 2009 Cash Flows from Operating Activities Income before Income Taxes 13, Depreciation 7,242 6,375 Amortization of Goodwill Impairment Loss 266 2,766 (Gain) Loss on Disposal of Property, Plant and Equipment (Gain) Loss on Sales of Investments in Securities (30) Valuation Loss on Investments in Securities 9 17 Valuation Loss on Investments 14 Business Restructuring Expense 158 Effect of Application of Accounting Standards for Leased Assets 215 Loss on Cancellation of Lease Obligations 3 24 Increase (Decrease) in Allowance for Doubtful Accounts (236) (48) Increase (Decrease) in Reserve for Sales Returns (1,300) (1,469) Increase (Decrease) in Accrued Bonuses for Employees (8,566) (6,530) Increase (Decrease) in Accrued Bonuses for Directors and Corporate Auditors (51) 27 Increase (Decrease) in Provision for Liabilities and Charges (6) 165 Increase (Decrease) in Accrued Retirement Benefits 272 (231) (Increase) Decrease in Prepaid Pension Expenses 215 1,404 Interest and Dividend Income (1,156) (844) Interest Expense Equity in (Earnings) Losses of Affiliates (9) (7) (Increase) Decrease in Notes and Accounts Receivable 13,013 19,796 (Increase) Decrease in Inventories (6,400) (3,786) Increase (Decrease) in Notes and Accounts Payable (6,091) (13,400) Other (3,934) (1,998) Subtotal 8,002 3,089 Interest and Dividends Received 1, Interest Paid (386) (266) Income Tax Paid (5,042) (3,245) Net Cash Provided by Operating Activities 3, Cash Flows from Investing Activities Transfers to Time Deposits (3,010) (14,511) Proceeds from Maturity of Time Deposits 10 7,680 Acquisition of Short-Term Investments in Securities (442) (636) Proceeds from Sales of Short-term Investments in Securities 159 Acquisition of Investments in Securities (4) (4) Proceeds from Sales of Investments in Securities 3, Acquisition of Property, Plant and Equipment (4,982) (3,903) Proceeds from Sales of Property, Plant and Equipment 79 4 Acquisition of Intangible Assets (994) (825) Payments of Long-Term Prepaid Expenses (715) (792) Other Net cash Used in Investing Activities (6,490) (12,677) 8

9 June 2008 June 2009 Cash Flows from Financing Activities Net Increase (Decrease) in Short-Term Debt 879 1,826 Net Increase (Decrease) in Commercial Paper 2, Proceeds from Long-Term Debt 2,105 Redemption of Bonds (6,317) Repayment of Lease Obligations (934) (7,43) Acquisition of Treasury Stock (109) (6,788) Sales of Treasury Stock Cash Dividends Paid (6,459) (9,427) Cash Dividends Paid to Minority Shareholders (601) (206) Other Net Cash Used in Financial Activities (8,577) (14,363) Effect of Exchange Rate Changes on Cash and Cash Equivalents (3,392) 579 Net Change in Cash and Cash Equivalents (14,720) (25,993) Cash and Cash Equivalents at Beginning of Term 120,393 91,857 Cash and Cash Equivalents at End of Term 105,673 65,863 (4) Note on assumptions for going concern Not applicable 9

10 (5) Segment Information [Business Segment Information] June 30, 2008 Domestic Overseas Elimination/ Others Subtotal Consolidation Cosmetics Cosmetics Corporate Net Sales (1) Sales to Outside Customers 96,172 63,213 4, , ,107 (2) Intersegment Sales or Transfers 1, ,565 5,318 (5,318) Total 97,359 63,779 8, ,426 (5,318) 164,107 Operating Income 6,613 4, , ,229 Notes: 1. Shiseido s business is segmented by categories for control of its in-house organization. 2. Business segments and main products/services included in each segment: Domestic Cosmetics Cosmetics division (Production and sale of cosmetics, cosmetic accessories, toiletries) Professional division (Production and sale of beauty salon products) Healthcare division (Production and sale of health & beauty foods and over-the-counter drugs) Other (Production and sale of non-shiseido-brand products, mail-order products, etc.) Overseas Cosmetics Cosmetics division (Production and sale of cosmetics, cosmetic accessories, toiletries) Professional division (Production and sale of beauty salon products) Others Frontier Sciences division (Production and sale of cosmetic raw materials, medical-use drugs, beauty care cosmetics, etc.) Others (Sale of clothing and accessories; operation of restaurants; real estate management/sale; etc.) 3. From the quarterly period under review, the Company has applied Temporary Accounting Treatment for Overseas Subsidiaries for Preparing Consolidated Financial Statements. As a result of this change, in the period under review, consolidated operating income in the Overseas Cosmetics business segment declined 266 million compared with the previous corresponding period. 4. From the quarterly period under review, the Company has applied Accounting Standard for Lease Transactions and Guidance on Accounting Standard for Lease Transactions. As a result of this change, in the period under review, consolidated operating income in the Domestic Cosmetics business segment increased 56 million, consolidated operating income in the Overseas Cosmetics business segment increased 17 million and consolidated operating income in others segment increased 3 million compared with the previous corresponding period. June 30, 2009 Domestic Overseas Elimination/ Others Subtotal Consolidation Cosmetics Cosmetics Corporate Net Sales (1) Sales to Outside Customers 90,429 46,860 2, , ,686 (2) Intersegment Sales or Transfers ,467 2,270 (2,270) Total 90,919 47,174 3, ,956 (2,270) 139,686 Operating Income 4,107 (2,425) 399 2, ,108 Notes: 1. Shiseido s business is segmented by categories for control of its in-house organization. 2. Business segments and main products/services included in each segment: Domestic Cosmetics Cosmetics division (Production and sale of cosmetics, cosmetic accessories, toiletries) Professional division (Production and sale of beauty salon products) Healthcare division (Production and sale of health & beauty foods and over-the-counter drugs) Other (Production and sale of non-shiseido-brand products, mail-order products, etc.) Overseas Cosmetics Cosmetics division (Production and sale of cosmetics, cosmetic accessories, toiletries) Professional division (Production and sale of beauty salon products) Others Frontier Sciences division (Production and sale of cosmetic raw materials, medical-use drugs, beauty care cosmetics, etc.) Others (Operation of restaurants, etc.) 10

11 [Geographic Segment Information] June 30, 2008 Japan Americas Europe Asia/ Oceania Subtotal Elimination/ Corporate Consolidation Net Sales (1) Sales to Outside Customers 101,041 12,667 28,287 22, , ,107 (2) Intersegment Sales or Transfer 6,511 2,182 1, ,278 (10,278) Total 107,552 14,849 29,854 22, ,386 (10,278) 164,107 Operating Income 3, ,204 2,525 11,090 1,139 12,229 Notes: 1. Segmentation of countries and regions is based on geographic proximity. 2. Major countries and regions are as follows: Americas: United States, Canada, Brazil Europe: France, Italy, Germany, Spain Asia/Oceania: China (including Hong Kong), Taiwan, South Korea, Southeast Asia, Australia 3. From the quarterly period under review, the Company has applied Temporary Accounting Treatment for Overseas Subsidiaries for Preparing Consolidated Financial Statements. As a result of this change, in the period under review, consolidated operating income in the Americas declined 188 million and operating income in Asia/Oceania declined 78 million compared with the previous corresponding period. 4. From the quarterly period under review, the Company has applied Accounting Standard for Lease Transactions and Guidance on Accounting Standard for Lease Transactions. As a result of this change, in the period under review, consolidated operating income in Japan increased 76 million compared with the previous corresponding period. June 30, 2009 Japan Americas Europe Asia/ Oceania Subtotal Elimination/ Corporate Consolidation Net Sales (1) Sales to Outside Customers 92,905 9,637 17,949 19, , ,686 (2) Intersegment Sales or Transfer 6,023 1,868 1, ,228 (9,228) Total 98,929 11,506 19,278 19, ,914 (9,228) 139,686 Operating Income 575 (97) , ,108 Notes: 1. Segmentation of countries and regions is based on geographic proximity. 2. Major countries and regions are as follows: Americas: United States, Canada, Brazil Europe: France, Italy, Germany, Spain Asia/Oceania: China (including Hong Kong), Taiwan, South Korea, Southeast Asia, Australia 11

12 [Overseas Sales] June 30, 2008 Shiseido Co., Ltd. (4911) Financial Results for the Americas Europe Asia/Oceania Total I. Overseas Sales 13,853 24,594 24,980 63,429 II. Consolidated Net Sales 164,107 III. Percentage of Overseas Sales against Consolidated Net Sales June 30, Americas Europe Asia/Oceania Total I. Overseas Sales 10,210 15,890 20,886 46,988 II. Consolidated Net Sales 139,686 III. Percentage of Overseas Sales against Consolidated Net Sales Notes: 1. Segmentation of countries and regions is based on geographic proximity. 2. Major countries and regions are as follows: Americas: United States, Canada, Brazil Europe: France, Italy, Germany, Spain Asia/Oceania: China (including Hong Kong), Taiwan, South Korea, Southeast Asia, Australia 3. Overseas sales consist of exports from the Company and domestic consolidated subsidiaries and sales of overseas consolidated subsidiaries, excluding those from transactions with Japan. Sales from intersegment transactions among the Companies are not included. (6) Notes in the event of major changes in shareholders equity At its meeting held on April 30, 2009, the Board of Directors approved a resolution to buy back shares. The Company subsequently undertook a share buyback on May 12, 2009, leading to a 6,752 million increase in treasury stock. Due mainly to the buyback, the balance of treasury stock at the end of the period under review rose to 23,604 million. 12