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Shiseido fy2011 1sthalf_results Shiseido fy2011 1sthalf_results Document Transcript

  • Shiseido Co., Ltd. (4911) Financial Results for the First 2 Quarters of the Fiscal Year Ending March 31, 2012 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 First 2 Quarters Ended September 30, 2011 [Japanese Standards]Shiseido Company, Limited Listings: Tokyo Stock Exchange, First Section (Code Number: 4911) URL: http://www.shiseido.co.jp/e/ Representative: Hisayuki Suekawa, President/CEO & Representative Director Contact: Akihiro Miyasaka, General Manager of Investor Relations Department Tel. +81-3-3572-5111 Filing of quarterly financial report: November 11, 2011 Start of cash dividend payments: December 5, 2011 Supplementary quarterly materials prepared: Yes Quarterly results information meeting held: Yes (for institutional investors, analysts, etc.)1. Performance for the First 2 Quarters of the Fiscal Year Ending March 31, 2012 (From April 1–September 30, 2011) * 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 Net IncomeFirst 2 Quarters Ended 336,171 [+0.8%] 21,518 [–1.5%] 21,808 [+0.6%] 9,095 [+20.6%]September 30, 2011First 2 Quarters Ended 333,625 [+5.2%] 21,845 [–3.9%] 21,688 [–8.4%] 7,540 [–57.6%]September 30, 2010Note: Comprehensive income First 2 quarters ended September 30, 2011: ¥13,191 million [—%] First 2 quarters ended September 30, 2010: ¥–6,958 million [—%] Fully Diluted Net Income per Share Net Income per Share (Yen) (Yen)First 2 Quarters Ended 22.86 22.84September 30, 2011First 2 Quarters Ended 18.95 18.93September 30, 2010
  • Shiseido Co., Ltd. (4911) Financial Results for the First 2 Quarters of the Fiscal Year Ending March 31, 2012(2) Consolidated Financial Position (Millions of yen) Total Assets Net Assets Equity Ratio (%)First 2 Quarters Ended 728,968 323,050 42.5September 30, 2011Fiscal Year Ended 739,120 320,127 41.6March 31, 2011[Reference] Equity: First 2 quarters ended September 30, 2011: ¥309,573 million Fiscal year ended March 31, 2011: ¥307,269 millionPursuant to its application of Accounting Standard for Accounting Changes and Error Corrections (ASBJ Statement No. 24,December 4, 2009) and Guidance on Accounting Standard for Accounting Changes and Error Corrections (ASBJ Guidance No. 24,December 4, 2009), the Company has applied retrospective treatment to its consolidated financial statements for the fiscal yearended March 31, 2011. For more details, please refer to “2. (3) Changes in accounting policies; changes in accounting estimates;restatements” on page 9 of this report.2. Cash Dividends Cash Dividends per Share (Yen) First Quarter Second Quarter Third Quarter Year-End Full Year Fiscal Year Ended March 31, 2011 — 25.00 — 25.00 50.00 Fiscal Year Ending March 31, 2012 — 25.00 Fiscal Year Ending March 31, 2012 (plan) — 25.00 50.00Note: Revision to dividend forecast during period: None3. Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2012(From April 1, 2011–March 31, 2012) (Millions of yen, percentage figures denote year-on-year change) Net Income Operating Ordinary Net Sales Net Income per Share Income Income (Yen) Fiscal Year Ending 680,000 [+1.4%] 40,000 [–10.0%] 40,000 [–10.1%] 21,000 [+64.2%] 52.77 March 31, 2012Note: Revision to consolidated earnings forecast during period: None4. Other Information(1) Significant changes in subsidiaries during period (changes in specific subsidiaries due to change in scope of consolidation): None(2) Special accounting treatment adopted: None(3) Changes in accounting policies; changes in accounting estimates; restatements 1) Changes in accounting policies due to amendment of accounting standards: Yes 2) Other changes in accounting policies: Yes 3) Changes in accounting estimates: None 4) Restatements: None 2
  • Shiseido Co., Ltd. (4911) Financial Results for the First 2 Quarters of the Fiscal Year Ending March 31, 2012(4) Shares outstanding (common stock) at term-end 1. Number of shares outstanding (including treasury stock) First 2 quarters ended September 30, 2011: 400,000,000 Fiscal year ended March 31, 2011: 400,000,000 2. Number of treasury shares outstanding First 2 quarters ended September 30, 2011: 2,017,820 Fiscal year ended March 31, 2011: 2,052,792 3. Average shares outstanding over period (cumulative; consolidated) First 2 quarters ended September 30, 2011: 397,962,116 First 2 quarters ended September 30, 2010: 397,826,663 Implementation status of quarterly review procedures At the time of disclosure of this report, review procedures for quarterly financial statements pursuant to the Financial Instruments and Exchange Act had not been completed. 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 “1. (3) Full-Year Performance Outlook” on page 7 for information on preconditions underlying the above outlook and other related information. 3
  • Shiseido Co., Ltd. (4911) Financial Results for the First 2 Quarters of the Fiscal Year Ending March 31, 2012Contents1. Analysis of Operating Results ··················································································································· 5 (1) Consolidated Performance ··············································································································· 5 (2) Consolidated Financial Position ······································································································· 7 (3) Full-Year Performance Outlook ········································································································· 72. Summary (Other) Information····················································································································· 9 (1) Significant Changes in Subsidiaries··································································································· 9 (2) Special Accounting Treatment Adopted····························································································· 9 (3) Changes in Accounting Policies; Changes in Accounting Estimates; Restatements ·············································································· 93. Major Items Related to Ongoing Concern Assumption··············································································· 9 (Reference) Parent Company and Group Subsidiaries: Review by Geographical Area and Overseas Sales ··············································································· 104. Consolidated Quarterly Financial Statements ··························································································· 11 (1) Consolidated Quarterly Balance Sheets ························································································· 11 (2) Consolidated Quarterly Statements of Income and Consolidated Quarterly Statements of Comprehensive Income ··················································· 13 (3) Consolidated Quarterly Statements of Cash Flows·········································································· 15 (4) Note on Assumptions for Going Concern ······················································································ 16 (5) Segment Information ······················································································································ 17 (6) Note in the Event of Major Changes in Shareholders’ Equity ························································· 18 (7) Supplementary Information ············································································································· 18 4
  • Shiseido Co., Ltd. (4911) Financial Results for the First 2 Quarters of the Fiscal Year Ending March 31, 20121. Analysis of Operating Results(1) Consolidated PerformanceReview of Performance in First 2 Quarters Ended September 30, 2011In the two-quarter period under review (six-month period from April 1 to September 30, 2011), the ShiseidoGroup posted an improved performance, with consolidated net sales totaling ¥336.2 billion, up 0.8%compared with the previous corresponding period. In Japan, we reported a 3.0% year-on-year decline in sales, to ¥192.9 billion, amid weak consumersentiment associated with the Great East Japan Earthquake, as well as uncertainty about the economicoutlook stemming from the yen’s sharp appreciation, difficult employment conditions, and other factors. Bycontrast, overseas sales increased 6.4%, to ¥143.3 billion, owing to sustained, albeit gradual, growth inEuropean and North American cosmetics markets, as well as continued strong market expansion in Chinaand emerging nations. (For overseas subsidiaries, the “first two quarters” refers to the period from January1 to June 30, 2011.) Due to proactive growth-related investments mainly overseas, operating income declined 1.5%, to¥21.5 billion. Ordinary income edged up 0.6%, to ¥21.8 billion. Net income jumped 20.6% year-on-year, to¥9.1 billion, thanks to the absence of extraordinary losses posted in the previous corresponding period,including a loss on valuation of investments in securities. The Company declared an interim cash dividendof ¥25.00 per share in line with its initial forecast.[Consolidated Performance](Sales) (Millions of yen) First 2 Quarters First 2 Quarters Year-on-Year Increase/Decrease Ended Share of Total Ended Share of Total September 2011 (%) September 2010 (%) Amount % changeDomestic Cosmetics 180,493 53.7% 187,350 56.2% –6,857 –3.7%BusinessGlobal Business 151,574 45.1% 141,444 42.4% +10,130 +7.2%Others 4,104 1.2% 4,830 1.4% –726 –15.0%Sales Total 336,171 100.0% 333,625 100.0% +2,546 +0.8%Domestic Sales 192,879 57.4% 198,889 59.6% –6,010 –3.0%Overseas Sales 143,292 42.6% 134,735 40.4% +8,556 +6.4%(Income) First 2 Quarters Ratio to First 2 Quarters Ratio to Year-on-Year Increase/Decrease Ended Net Sales Ended Net Sales September 2011 (%) September 2010 (%) Amount % changeDomestic Cosmetics 21,438 11.8% 22,128 11.8% –690 –3.1%BusinessGlobal Business (699) –0.5% (1,252) –0.9% +552 —Others 688 10.4% 888 11.1% –200 –22.5%Elimination 91 — 81 — +10 —Operating Income Total 21,518 6.4% 21,845 6.5% –327 –1.5%Ordinary Income 21,808 6.5% 21,688 6.5% +120 +0.6%Net Income 9,095 2.7% 7,540 2.3% +1,554 +20.6% 5
  • Shiseido Co., Ltd. (4911) Financial Results for the First 2 Quarters of the Fiscal Year Ending March 31, 2012Results by Reportable Segment(a) Domestic Cosmetics Business[Sales]Sales in the Domestic Cosmetics Business segment declined 3.7%, to ¥180.5 billion. During the period, the economic slump following the Great East Japan Earthquake showed signs ofrecovery, albeit at a low pace, in the second quarter. However, the expected upturn in consumer sentimentfailed to materialize, and the domestic cosmetics market remained challenging as a result. In the cosmetics business, sales of both counseling cosmetics and self-selection cosmetics declinedyear-on-year. However, sales of toiletries were up, buoyed by solid performances of the SEA BREEZEwhole-body care line, as well as the TSUBAKI hair-care line, which underwent a renewal in June 2011.[Operating Income]The decline in sales led to a decrease in the marginal gain, but this was partly alleviated by a reduction inselling, general and administrative expenses. Accordingly, operating income in this segment was down3.1% year-on-year, to ¥21.4 billion.(b) Global Business[Sales]The Global Business segment benefited from steady sales growth in all overseas regions—Americas,Europe, and Asia/Oceania. Also, the results of Bare Escentuals, acquired in March 2010, contributed to thesegment’s performance for the full six months of the period under review, compared with four months inthe previous corresponding period. Consequently, this segment posted a 14.7% sales increase on a localcurrency basis. After translation into yen, segment sales increased 7.2%, to ¥151.6 billion. In the top-priority market of China, almost all brands maintained healthy performances. These includedAUPRES, a dedicated brand for Chinese department stores that underwent a renewal of itscomplexion-brightening skincare products, as well as URARA, a dedicated brand for Chinese cosmeticsspecialty stores, and Za, which targets middle-income earners in Asia.[Operating Income]During the period, the Company made aggressive investments in growth markets, centering on China, andthus again posted an operating loss. However, the segment benefited from the absence of a one-timeincrease in cost of sales associated with the acquisition of Bare Escentuals, incurred in the previouscorresponding period. Accordingly, the segment posted a ¥0.7 billion operating loss, an improvementcompared with a ¥1.3 billion operating loss in the previous corresponding period.(c) Others[Sales]Sales in the Others declined 15.0%, to ¥4.1 billion. This was mainly due to a decrease in sales of certainmedical-use pharmaceuticals—a category of the Frontier Sciences Division that we withdrew from in theprevious fiscal year.[Operating Income]Operating income in this segment fell 22.5%, to ¥0.7 billion, due to a marginal loss stemming from thesales decline. 6
  • Shiseido Co., Ltd. (4911) Financial Results for the First 2 Quarters of the Fiscal Year Ending March 31, 2012(2) Consolidated Financial PositionCompared with the previous fiscal year-end (March 31, 2011), total assets decreased ¥10.2 billion, to¥729.0 billion. Total liabilities declined ¥13.1 billion, due largely to repayment of interest-bearing debt, andnet assets rose ¥2.9 billion. Accordingly, the equity ratio at the end of the period was 42.5%, up from41.6% at the previous fiscal year-end. Net cash provided by operating activities amounted to ¥26.3 billion. Net cash used in investingactivities totaled ¥5.0 billion, due largely to acquisition of property, plant and equipment. Net cash used infinancing activities was ¥18.8 billion, due largely to repayment of interest-bearing debt and cash dividendspaid. As a result, cash and cash equivalents at end of period stood at ¥92.3 billion, up ¥3.7 billion from thebeginning of the period.Consolidated Cash Flows (Summary) (Billions of yen)Cash and Cash Equivalents at Beginning of Term 88.6 Net Cash Provided by Operating Activities 26.3 Net Cash Used for Investing Activities (5.0) [Investments in Fixed Assets] [(13.3)] * Net Cash Used for Financing Activities (18.8) *Investments in Fixed Assets (Billions of yen) Effect of Exchange Rate Changes on Cash and Acquisition of Property, Plant, Cash Equivalents 1.2 and Equipment (8.9)Net Change in Cash and Cash Equivalents 3.7 Increase in Intangibles (2.7)Cash and Cash Equivalents at End of Term 92.3 Long-Term Prepaid Expenses (1.7)(3) Full-Year Performance OutlookFull-Year Performance Outlook[Consolidated Net Sales] (Billions of yen) Fiscal Year Ending Year-on-Year Fiscal Year Ended March 31, 2012 Increase/Decrease March 31, 2011 (Estimate) Amount % changeDomestic Cosmetics Business 355.5 358.4 –2.9 –0.8%Global Business 314.5 302.6 +11.9 +3.9%Others 10.0 9.7 +0.3 +3.5%Net Sales 680.0 670.7 +9.3 1.4%Domestic Sales 381.0 382.9 –1.9 –0.5%Overseas Sales 299.0 287.8 +11.2 3.9%Overseas Sales Ratio 44.0% 42.9% 7
  • Shiseido Co., Ltd. (4911) Financial Results for the First 2 Quarters of the Fiscal Year Ending March 31, 2012[Consolidated Income] (Billions of yen) Fiscal Year Year-on-Year Fiscal Year Ending Increase/Decrease Percent of Ended Percent of March 31, Net Sales March 31, Net Sales 2012 Amount % change 2011 (Estimate)Operating Income 40.0 5.9% 44.5 6.6% –4.5 –10.0%Ordinary Income 40.0 5.9% 44.5 6.6% –4.5 –10.1%Net Income 21.0 3.1% 12.8 1.9% +8.2 +64.2% In the second half of the fiscal year, we expect an increase in sales compared with the previouscorresponding period, owing mainly to continued business expansion in North America and Europe, as wellas expected growth in China and emerging nations. This is despite predictions that conditions in Japan andoverseas with remain uncertain. We forecast a year-on-year decline in operating income in the second half,due to increased outlays aimed at future growth, centering on reinforcement of marketing investments inJapan and overseas. Our full-year consolidated forecasts for the year ending March 31, 2012 are net sales of ¥680 billion(up 1.4% year-on-year), operating income of ¥40 billion (down 10.0%), ordinary income of ¥40 billion(down 10.1%), and net income of ¥21 billion (up 64.2%).Outlook by Reportable Segment[Domestic Cosmetics Business]In the second half, we believe that the growth rate of the domestic cosmetics market will remain mostlyunchanged. We will spend the autumn and winter emphasizing healing-related activities by promotingcosmetics that address tiredness and damage to the body and soul sustained during the summer months. Inthese ways, we will focus on building lines that attract enduring customer loyalty while fosteringoverwhelmingly powerful lines and products. Although we forecast a year-on-year increase in sales in the second half of the year, this will notcompensate for the decline in the first half. Therefore, we expect a decrease in full-year segment sales. Wealso project a decline in segment operating income due to forward-looking investments in directmarketing—scheduled for launch in April 2012—as well as reinforced marketing in existing businesses.[Global Business]In the second half, we anticipate a continuation of positive growth in European and North Americancosmetics markets despite ongoing uncertainty. In Asia, we look forward to continued growth, centering onChina. In this context, we will strive to underpin future growth by stepping up marketing investments in oursix global mega brands, as well as in China, which is a growth engine. In this segment, therefore, we expectincreased sales both in the second half and the entire year. We also forecast a rise in full-year segmentoperating income.[Others]Going forward, we will continue striving to expand our presence in the Frontier Sciences Division,identified as a growth field. We forecast that sales and operating income will remain mostly unchanged.We base our predictions on the following assumptions.Our forecasts are based on exchange rates of ¥80.0 per U.S. dollar, ¥110.0 per euro, and ¥12.5 per Chineseyuan during the current fiscal year. 8
  • Shiseido Co., Ltd. (4911) Financial Results for the First 2 Quarters of the Fiscal Year Ending March 31, 20122. Summary (Other) Information(1) Significant Changes in SubsidiariesNot applicable.(2) Special Accounting Treatment AdoptedNot applicable.(3) Changes in Accounting Policies; Changes in Accounting Estimates; Restatements(Change in accounting treatment for product samples and promotional materials)Previously, the Company’s subsidiaries in Americas treated product samples and promotional materialsused in retail store sales activities as assets at the time of acquisition and expenses at the time of shipmentto customers, i.e, retail stores. Effective the first quarter of the current fiscal year, however, such items arenow treated as expenses at the time of acquisition, in the interests of consistency in internal Groupaccounting treatment. The change in policy has not been applied retrospectively to the Consolidated Statements of Income orConsolidated Statements of Comprehensive Income for the first two quarters of previous fiscal year,because balance of inventories have remained mostly unchanged and the differences in term-end balancesare not deemed significant. Reflecting the cumulative impact on net assets at the beginning of the previousfiscal year, retained earnings for that year declined ¥1,064 million as a result of the change in accountingpolicy.(Change in method of calculating fully diluted net income per share)Effective the first quarter of the current fiscal year, the Company has applied “Accounting Standards forEarnings Per Share” (ASBJ Statement No. 2, June 30, 2010) and “Guidance on Accounting Standard forEarnings Per Share” (ASBJ Guidance No. 4, June 30, 2010). In calculating diluted earnings per share, for stock options in which the right to exerciseoptions is vested after a specified service period, the fair value of service expected to be providedto the Group in the future is added to the proceeds assumed to be received when options areexercised. In the first quarter of the previous fiscal year and the first quarter of the current fiscal year, theCompany reported net losses. For each of those periods, therefore, the new accounting standards had noeffect on fully diluted net income per share, so it was not mentioned in the “Consolidated Settlement ofAccounts for the First Quarter Ended June 30, 2011.” In the first two quarters of the previous fiscal year, adoption of the aforementioned accountingstandards would have had a minimal effect on fully diluted net income per share, so it has not been appliedretrospectively.3. Major Items Related to Ongoing Concern AssumptionNot applicable. 9
  • Shiseido Co., Ltd. (4911) Financial Results for the First 2 Quarters of the Fiscal Year Ending March 31, 2012(Reference) Parent Company and Group Subsidiaries:Review by Geographical Area and Overseas SalesParent Company and Group Subsidiaries:[Sales by Geographic Area] (Millions of yen) 1st 2 Quarters 1st 2 Quarters Year-on-Year Share of Share of Ended Ended Increase/Decrease Total (%) Total (%) September 2011 September 2010 Amount % change Japan 193,530 57.6% 199,369 59.8% –5,839 –2.9% Americas 41,506 12.3% 37,785 11.3% +3,721 +9.8% Europe 44,080 13.1% 41,881 12.5% +2,199 +5.3% Asia/Oceania 57,053 17.0% 54,588 16.4% +2,464 +4.5% Outside Japan 142,641 42.4% 134,255 40.2% +8,385 +6.2% Net Sales 336,171 100.0% 333,625 100.0% +2,546 +0.8%Parent Company and Group Subsidiaries:[Operating Income by Geographic Area] (Millions of yen) 1st 2 Quarters Ratio to 1st 2 Quarters Ratio to Year-on-Year Ended Regional Ended Regional Increase/Decrease September 2011 Sales* September 2010 Sales* Amount % change Japan 12,808 6.1% 13,039 6.1% –230 –1.8% Americas 2,369 5.0% (2,058) –5.0% +4,427 — Europe 1,551 3.4% 2,968 6.8% –1,416 –47.7% Asia/Oceania 3,870 6.7% 6,420 11.7% –2,549 –39.7% Outside Japan 7,791 5.1% 7,330 5.2% +461 +6.3% Elimination 917 — 1,476 — –558 — Operating Income 21,518 6.4% 21,845 6.5% –327 –1.5%* Based on regional sales, including intra-Group sales between areas.[Overseas Sales (by Destination)] (Millions of yen) 1st 2 Quarters 1st 2 Quarters Year-on-Year Increase/Decrease Ended Share of Ended Share of % change September Net Sales September Net Sales in local Amount % change currency 2011 2010 terms Americas 43,331 12.9% 39,073 11.7% +4,257 +10.9% +22.9% Europe 40,587 12.1% 38,324 11.5% +2,262 +5.9% +12.1% Asia/Oceania 59,374 17.6% 57,337 17.2% +2,036 +3.6% +9.6% Overseas Sales 143,292 42.6% 134,735 40.4% +8,556 +6.4% +14.2% 10
  • Shiseido Co., Ltd. (4911) Financial Results for the First 2 Quarters of the Fiscal Year Ending March 31, 20124. Consolidated Quarterly Financial Statements(1) Consolidated Quarterly Balance Sheets (Millions of yen) Fiscal Year Ended First 2 Quarters Ended March 2011 September 2011ASSETSCurrent Assets: Cash and Time Deposits 90,006 63,273 Notes and Accounts Receivable 103,002 99,718 Short-Term Investments in Securities 15,051 40,257 Inventories 65,850 71,008 Deferred Tax Assets 27,318 20,774 Other Current Assets 12,924 16,082 Less: Allowance for Doubtful Accounts (938) (991)Total Current Assets 313,215 310,122Fixed Assets: Property, Plant and Equipment, at Cost: Buildings and Structures 160,045 161,339 Less: Accumulated Depreciation (98,605) (100,234) Buildings and Structures (net of depreciation) 61,439 61,104 Machinery, Equipment and Vehicles 82,166 81,962 Less: Accumulated Depreciation (71,084) (71,217) Machinery, Equipment and Vehicles (net of depreciation) 11,082 10,744 Fixtures and Fittings 54,677 56,020 Less: Accumulated Depreciation (36,825) (37,823) Fixtures and Fittings (net of depreciation) 17,852 18,197 Land 33,490 33,816 Lease Assets 9,817 9,629 Less: Accumulated Depreciation (5,285) (5,211) Lease Assets (net) 4,532 4,418 Construction in Progress 2,823 3,330Total Property, Plant and Equipment 131,221 131,612Intangible Assets: Goodwill 94,122 90,756 Lease Assets 348 552 Trademarks 42,628 42,540 Other Intangible Assets 48,955 47,911Total Intangible Assets 186,054 181,761Investments and Other Assets: Investments in Securities 27,515 27,780 Prepaid Pension Expenses 24,560 22,877 Long-Term Prepaid Expenses 9,743 9,174 Deferred Tax Assets 19,577 19,899 Other Investments 27,366 25,862 Less: Allowance for Doubtful Accounts (133) (123)Total Investments and Other Assets 108,628 105,471Total Fixed Assets 425,904 418,845Total Assets 739,120 728,968 11
  • Shiseido Co., Ltd. (4911) Financial Results for the First 2 Quarters of the Fiscal Year Ending March 31, 2012 (Millions of yen) Fiscal Year Ended First 2 Quarters Ended March 2011 September 2011LIABILITIESCurrent Liabilities: Notes and Accounts Payable 43,771 46,343 Short-Term Debt 5,595 4,476 Current Portion of Long-Term Debt 8,509 6,409 Lease Obligations 2,256 2,118 Other Payables 37,980 36,438 Accrued Income Taxes 12,214 6,865 Reserve for Sales Returns 11,447 9,752 Accrued Bonuses for Employees 11,549 11,160 Accrued Bonuses for Directors 373 293 Provision for Liabilities and Charges 764 652 Reserve for Disaster 922 — Deferred Tax Liabilities 25 29 Other Current Liabilities 24,263 24,931Total Current Liabilities 159,676 149,471Long-Term Liabilities: Bonds 90,000 90,000 Long-Term Debt 88,337 85,300 Lease Obligations 2,818 2,998 Accrued Retirement Benefits 41,285 42,138 Allowance for Losses on Guarantees 350 350 Allowance for Environmental Measures 495 488 Deferred Tax Liabilities 29,165 29,152 Other Long-Term Liabilities 6,864 6,017Total Long-Term Liabilities 259,316 256,446Total Liabilities 418,993 405,918NET ASSETSShareholders’ Equity: Common Stock 64,506 64,506 Capital Surplus 70,258 70,261 Retained Earnings 231,336 230,447 Less: Treasury Stock, at Cost (3,874) (3,808)Total Shareholders’ Equity 362,226 361,407Accumulated Other Comprehensive Income: Valuation Difference on Available-for-Sale Securities 83 282 Foreign Currency Translation Adjustments (55,040) (52,117)Total Accumulated Other Comprehensive Income (54,956) (51,834)Stock Acquisition Rights 590 593Minority Interests in Consolidated Subsidiaries 12,267 12,883Total Net Assets 320,127 323,050Total Liabilities and Net Assets 739,120 728,968 12
  • Shiseido Co., Ltd. (4911) Financial Results for the First 2 Quarters of the Fiscal Year Ending March 31, 2012(2) Consolidated Quarterly Statements of Income and Consolidated Quarterly Statements of Comprehensive Income Consolidated Quarterly Statements of Income Cumulative for First 2 Quarters (Millions of yen) First 2 Quarters Ended First 2 Quarters Ended September 2010 September 2011Net Sales 333,625 336,171Cost of Sales 82,895 78,163Gross Profit 250,729 258,008Selling, General and Administrative Expenses 228,883 236,490Operating Income 21,845 21,518Other Income Interest Income 319 398 Dividend Income 562 512 Rental Income 465 468 Subsidy Income 334 486 Others 757 505Total Other Income 2,439 2,371Other Expenses Interest Expense 1,095 943 Equity in Losses of Affiliates 49 87 Foreign Exchange Loss 558 514 Others 892 534Total Other Expenses 2,596 2,081Ordinary Income 21,688 21,808Extraordinary Income Gain on Sales of Property, Plant and Equipment 546 894 Gain on Sales of Investments in Securities 2 0Total Extraordinary Income 548 895Extraordinary Losses Impairment loss 20 — Loss on Disposal of Property, Plant and Equipment 1,059 693 Loss on Sales of Investments in Securities 2 255 Write-Down of Investments in Securities 4,491 2 Loss on Adjustment for Changes of Accounting Standard for Asset Retirement Obligations 831 — Purchasing-Related Expenses 1,281 —Total Extraordinary Losses 7,686 950Income before Income Taxes 14,551 21,753Income Taxes – Current 5,857 5,778Income Tax –Deferred (281) 5,999Total Income Taxes 5,576 11,777Income before Minority Interests in Earnings of ConsolidatedSubsidiaries 8,975 9,975Minority Interests in Net Income of Consolidated Subsidiaries 1,434 880Net Income 7,540 9,095 13
  • Shiseido Co., Ltd. (4911) Financial Results for the First 2 Quarters of the Fiscal Year Ending March 31, 2012 Consolidated Statements of Comprehensive Income Cumulative for First 2 Quarters (Millions of yen) First 2 Quarters Ended First 2 Quarters Ended September 2010 September 2011Income before Minority Interests 8,975 9,975Other Comprehensive Income Valuation Difference on Available-for-Sale Securitie (982) 191 Foreign Currency Translation Adjustments (14,891) 3,002 Share of Other Comprehensive Income of Associates Accounted (59) 22 for Using Equity Method Total Other Comprehensive Income (15,933) 3,215 Comprehensive Income (6,958) 13,191 (Breakdown) Comprehensive Income Attributable to Shareholders’ Equity (7,852) 12,218 Comprehensive Income Attributable to Minority Interests 894 973 14
  • Shiseido Co., Ltd. (4911) Financial Results for the First 2 Quarters of the Fiscal Year Ending March 31, 2012(3) Consolidated Quarterly Statements of Cash Flows (Millions of yen) First 2 Quarters Ended First 2 Quarters Ended September 2010 September 2011Cash Flows from Operating Activities Income before Income Taxes 14,551 21,753 Depreciation 14,124 15,079 Amortization of Goodwill 2,247 2,835 Impairment Loss 20 — (Gain) Loss on Disposal of Property, Plant and Equipment 512 (201) (Gain) Loss on Sales of Investments in Securities 0 254 (Gain) Loss on Valuation of Investments in Securities 4,491 2 Effect of Application of Accounting Standard for Asset Retirement Obligations 831 — Purchase Related Expenses 1,281 — Increase (Decrease) in Allowance for Doubtful Accounts 43 (0) Increase (Decrease) in Reserve for Sales Returns (2,353) (1,804) Increase (Decrease) in Accrued Bonuses for Employees 295 (468) Increase (Decrease) in Accrued Bonuses for Directors (32) (80) Increase (Decrease) in Provision for Liabilities and Charges 64 (173) Increase (Decrease) in Reserve for Loss on Disaster — (922) Increase (Decrease) in Accrued Retirement Benefits 907 712 Increase (Decrease) in Allowance for Environmental Measures (1) (6) (Increase) Decrease in Prepaid Pension Expenses 1,971 1,682 Interest and Dividend Income (882) (910) Interest Expense 1,095 943 Equity in (Earnings) Losses of Affiliates 49 87 (Increase) Decrease in Notes and Accounts Receivable 6,344 5,303 (Increase) Decrease in Inventories 3,572 (4,348) Increase (Decrease) in Notes and Accounts Payable (4,641) (17) Other (506) 589Subtotal 43,988 40,309Interest and Dividends Received 944 912Interest Paid (1,022) (1,094)Income Tax Paid (9,594) (13,785)Net Cash Provided by Operating Activities 34,316 26,342 15
  • Shiseido Co., Ltd. (4911) Financial Results for the First 2 Quarters of the Fiscal Year Ending March 31, 2012 (Millions of yen) First 2 Quarters Ended First 2 Quarters Ended September 2010 September 2011Cash Flows from Investing Activities Transfers to Time Deposits (12,379) (13,536) Proceeds from Maturity of Time Deposits 11,147 19,396 Acquisition of Short-Term Investments in Securities (560) (324) Proceeds from Sales of Short-term Investments in Securities — 189 Acquisition of Investments in Securities (16) (107) Proceeds from Sales of Investments in Securities 63 18 Acquisition of Shares in Subsidiaries Due to Change in Scope of Consolidation (781) — Acquisition of Shares in Subsidiaries (5,723) — Acquisition of Property, Plant and Equipment (7,072) (8,933) Proceeds from Sales of Property, Plant and Equipment 577 943 Acquisition of Intangible Assets (2,397) (2,710) Payments of Long-Term Prepaid Expenses (1,644) (1,695) Other 490 1,735Net cash Used in Investing Activities (18,295) (5,024)Cash Flows from Financing Activities Net Increase (Decrease) in Short-Term Debt (99,992) (1,306) Proceeds from Long-Term Debt 60,002 — Repayment of Long-Term Debt (400) (5,108) Proceeds from Bond Issuance 40,000 — Repayment of Lease Obligations (1,458) (1,387) Acquisition of Treasury Stock (5) (1) Sales of Treasury Stock 156 71 Cash Dividends Paid (9,934) (9,939) Cash Dividends Paid to Minority Shareholders (1,426) (1,168)Net Cash Used in Financial Activities (13,059) (18,840)Effect of Exchange Rate Changes on Cash and Cash Equivalents (4,212) 1,196Net Change in Cash and Cash Equivalents (1,251) 3,673Cash and Cash Equivalents at Beginning of Term 77,157 88,592Increase in Cash and Cash Equivalents Due to New Consolidation 20,659 —Cash and Cash Equivalents at End of Term 96,565 92,265(4) Note on Assumptions for Going ConcernNot applicable 16
  • Shiseido Co., Ltd. (4911) Financial Results for the First 2 Quarters of the Fiscal Year Ending March 31, 2012(5) Segment InformationI First 2 Quarters Ended September 30, 2010 (April 1–September 30, 2010)1. Segment Sales and Income (Loss) (Millions of yen) Domestic Global Cosmetics Others Subtotal Adjustment Consolidation Business BusinessNet Sales(1) Sales to Outside Customers 187,350 141,444 4,830 333,625 ― 333,625(2) Intersegment Sales or Transfers 833 1,215 3,204 5,253 (5,253) ― Total 188,184 142,659 8,034 338,878 (5,253) 333,625Operating Income (Loss) 22,128 (1,252) 888 21,764 81 21,845Notes: 1. Segment income adjustment: Elimination of ¥81 million in inter-segment transactions. 2. “Others” includes the Frontier Sciences business (production and sale of cosmetic raw materials, medical-use drugs, medical cosmetics, etc.) and the restaurant business. 3. Segment income is adjusted for Operating Income described in Consolidated Quarterly Statements of Income.2. Information about Impairment Loss on Fixed Assets, Goodwill, etc.(Significant impairment losses related to fixed assets)Not applicable in the year under review.(Significant changes in goodwill amounts)Not applicable in the year under review.II First 2 Quarters Ended September 30, 2011 (April 1–September 30, 2011)1. Segment Sales and Income (Loss) (Millions of yen) Domestic Global Cosmetics Others Subtotal Adjustment Consolidation Business BusinessNet Sales(1) Sales to Outside Customers 180,493 151,574 4,104 336,171 ― 336,171(2) Intersegment Sales or Transfers 1,055 1,089 2,524 4,669 (4,669) ― Total 181,549 152,663 6,628 340,841 (4,669) 336,171Operating Income (Loss) 21,438 (699) 688 21,426 91 21,518Notes: 1. Segment income adjustment: Elimination of ¥91 million in inter-segment transactions. 2. “Others” includes the Frontier Sciences business (production and sale of cosmetic raw materials, medical-use drugs, medical cosmetics, etc.) and the restaurant business. 3. Segment income is adjusted for Operating Income described in Consolidated Quarterly Statements of Income.2. Information about Impairment Loss on Fixed Assets, Goodwill, etc.(Significant impairment losses related to fixed assets)Not applicable in the year under review.(Significant changes in goodwill amounts)Not applicable in the year under review. 17
  • Shiseido Co., Ltd. (4911) Financial Results for the First 2 Quarters of the Fiscal Year Ending March 31, 2012(6) Note in the Event of Major Changes in Shareholders’ EquityNot applicable.(7) Supplementary InformationFollowing the beginning of the period under review, the Company made accounting changes and/orcorrections of past errors. For this reason, it has applied Accounting Standard for Accounting Changes andError Corrections (ASBJ Statement No. 24, December 4, 2009) and Guidance on Accounting Standard forAccounting Changes and Error Corrections (ASBJ Guidance No. 24, December 4, 2009). 18