Fiscal Year Ended March 31, 2020 Business Results Presentation -Final Version [U.S. Accounting Standards] Wacoal Holdings Corp. May 20, 2020 US-based Intimates Online, which was acquired as a subsidiary, has been consolidated since the second quarter of this term under review, and the results are included and disclosed in Wacoal International Corp. (The U.S.) in the overseas Wacoal business segment. (In this presentation, Intimates Online is sometimes referred to as “IO.”) 1 [Speakers] Hironobu Yasuhara Representative Director, President and Corporate Officer Tomoyasu Ito Vice President Corporate Officer; Representative Director, President and Corporate Officer of Wacoal Corp. Akira Miyagi Director and Managing Corporate Officer in charge of Group Finance
Full Year Consolidated Business Performance Forecast for FY2021 The Group’s business activities have been significantly impacted by the suspension of store operations and curfews for the prevention of the spread of the novel coronavirus. In addition to the continuation of measures to prevent the spread of the infection, sluggish personal consumption caused by the expected worsening of employment and income environments will continue to adversely affect our Group’s management, sales and profit. As it is difficult to assess the impact of the novel coronavirus on the Group and reasonably forecast the earnings at this moment, we have not yet decided on a consolidated earnings forecast for FY2021, and will announce it as soon as the details become clear. 2 See page two. As we have already announced on May 15, our business activities have been greatly influenced by measures to prevent the expansion of COVID-19, such as the suspension of business operations of our stores and restrictions on outings. At this time, it is difficult to assess the impact of COVID-19 on our Group and rationally calculate our performance outlook. Therefore, we have yet to determine our consolidated performance forecasts for the fiscal year ending March 2021. As soon as the details become clear, we will disclose the information. We appreciate your understanding. Now, let us start the explanation. Director Miyagi, please. Results of FY2020 4Q (Jan. to Mar.) and Full-Year Business Results Akira Miyagi Wacoal Holdings Corp. Director and Managing Corporate Officer 3
FY2020 4Q (Jan. to Mar.) Executive Summary Sales declined significantly in Japan, Europe and the U.S. in March due to the spread of the infection. Net sales and operating income fell short of the revised estimate by ¥ 4.2 billion and ¥ 0.4 billion, respectively. Impairment charge on intangible assets ( ¥ 0.5 billion) was posted for Thai material companies (not reflected in the revised estimate). Operating income fell below the revised estimate despite the efforts to control SG&A expenses. (profit increased from the previous term as the range of impairment charges was reduced.) ¥ 42.7 billion Net sales [Down ¥ 4.2 billion (-9 ％ ) year on year] [ Reached 86% of the plan total and fell short of it by ¥6.7 billion] [Reached 91% of the revised estimate and fell short of it by ¥ 4.2 billion] Business was directly affected by the decrease of customers due to voluntary restraint from going out, a decline in demand from foreign visitors to Japan, and lockdown in major cities overseas. (Refer to P8 to see the sales conditions of major corporations from Jan. to Mar.) Slump in consumption after the tax hike, record-breaking mild winter, and the spread of the infection caused the domestic department store channel to struggle significantly. (Wacoal: Sales at stores in the department stores; March: Down 41%, 4Q: Down 23% (Refer to P39)) ¥ 3.2 billion Operating loss [Up ¥ 3.1 billion year on year] [Fell short of the plan total by ¥4.1 billion] [Fell short of the revised estimate by ¥ 0.4 billion] Due to the dropped sales, gross margin declined ¥2 billion compared with the revised estimate, and impairment charges amounte d t o ¥0.5 billion (not reflected in the revised estimate) = Profit declined by ¥2.5 billion. Reduction in SG&A expenses accompanying the rapid business deterioration, buffers reflected in the revised estimate, etc.= Reduc tion of approx. ¥2.1 billion. Fell short of the revised estimate by ¥ 0.4 billion. Breakdown of intangible assets for the current term (Trademark rights of Peach John: ¥0.2 billion; goodwill of Thai material com panies, etc.: ¥0.3 billion) （Impairment charges of ¥5.8 billion on intangible assets of Peach John, etc., in the same period of the previous year) 4 Miyagi: I would like to thank you for your participation in Wacoal Holdings' financial results briefing today, despite your busy schedule. I would first like to report on the fourth-quarter and full-year business performance for the fiscal year ended March 2020. Page four shows a summary of the Q4. Sales fell sharply in March as a result of the expansion of COVID-19 and fell short of the revised earnings forecast announced on January 31 by JPY4.2 billion, to JPY42.7 billion. Operating loss was JPY3.2 billion, JPY400 million lower than the revised plan. As a result of the decline in net sales, gross margin decreased by JPY2 billion, and impairment loss on intangible assets, which was not reflected in the revised plan, was recorded at approximately JPY500 million. However, due to factors such as a reduction in selling, general and administrative expenses, the results were almost in line with the revised plan. Loss on impairment of intangible assets of JPY500 million was comprised of impairment loss of JPY200 million for PEACH JOHN's trademark rights and JPY300 million for goodwill and other intangible assets recorded during the period under review. As a result, the remaining trademark rights of PEACH JOHN amount to approximately JPY500 million. The goodwill for PEACH JOHN does not remain. Currently, the balance of goodwill is JPY11.6 billion for Intimates Online (IO), and JPY10.8 billion for Wacoal Europe, for a total of JPY22.3 billion.
Net Sales per Quarter by Business Segment for FY2020 (YoY Increase/Decrease) （Millions of yen） 1Q 2Q 3Q 4Q Q4 comments Change % Change Change % Change Change % Change Change % Change Wholesale Business Div. -454 1,855 -2,725 -2,756 ●The Wholesale Business was affected by the prolonged slump in consumption after - 2.2% +8.2% - 13.1% - 15.1% the tax hike and a decrease in the number of customer visits due to the spread of the Retail end WEB infection. 508 560 -32 14 +8.7% +9.1% - 0.5% +0.2% Business Department ●The WEB Business remained healthy. ●The sales of directly managed retail stores dropped slightly in 4Q due to a decline in Others 249 68 -49 -244 ー ー ー ー the number of customer visits in March despite the contribution of the opening of new stores. Wacoal 303 2,483 -2,806 -2,986 +1.0% +9.1% - 10.7% - 12.7% ● The Wacoal Business (Japan) posted a decrease of \3.1 billion in sales due Intersegment transactions, -380 -631 405 -79 ー ー ー ー to the poor performance of the Wacoal Wholesale Business. etc. eliminetions (The decrease in sales in the Wholesale Business for the full year was approx. -77 1,852 -2,401 -3,065 Wacoal Business (Japan) - 0.3% +6.0% - 8.6% - 11.4% \4 billion [down 5%].) Wacoal International Corp. ●The sales of IO in 4Q were \0.55 billion. -329 -8 514 531 - 6.1% - 0.2% +14.7% +12.0% (U.S.) (Posted approx. 1 million dollars for E-commerce sales adjustments and provisions for sales returns accompanying accounting integration) Wacoal Europe Ltd. -452 47 -44 -669 - 11.4% +1.4% - 1.5% - 17.7% ●U.S. Wacoal’s sales in 4Q were at the same level as the previous year on a local Net currency basis. Wacoal China Co., Ltd. -37 -129 -263 -107 - 1.2% - 4.2% - 10.7% - 3.7% sales ●Sales declined 15% in Europe on a local currency basis because of the struggles in Intersegment transactions, -313 -347 -453 -489 ー ー ー ー department stores and the impact of the infection. etc. eliminetions ●In China, the sales in 4Q (from Oct. to Dec.) increased 2% on a local currency basis. Wacoal Business (Overseas) -1,131 -437 -246 -734 - 7.7% - 3.1% - 2.2% - 5.6% +5.5% ●Peach John’s sales were weak, mainly in the Mail Order Business, in the same period -120 116 -143 136 Peach John Business - 4.4% +4.2% - 5.6% last year. In reaction to this, sales augmented. ●The number of orders for Lecien dropped for both product and material businesses. Lecien -166 -72 -58 -228 - 11.1% - 4.2% - 4.0% - 14.0% ●Nanasai was affected by the recoil from the completion of delivery of the works in the -607 234 -3 -320 Nanasai - 23.5% +9.8% - 0.2% - 12.5% same period last year and a decline in the number of orders from customers. Intersegment transactions, 41 2 0 -14 ー ー ー ー etc. eliminetions (Reference) The impact of the spread of the infection -732 164 -61 -562 Other Businesses - 16.4% +3.7% - 1.6% - 12.5% on sales is estimated to be - ¥3 billion. Total -2,060 1,695 -2,851 -4,225 - 4.2% +3.2% - 6.3% - 9.0% 5 Quarterly net sales and operating profit trends by business segment are summarized on pages five to six. Please refer to the trends of net sales on page five. The decrease in the 4Q outpaced the decrease in the Q3, when domestic sales fell sharply, in reaction to the rush in demand prior to the tax hike. In the Wacoal Business (Domestic), sales declined sharply by JPY3.1 billion, due to the warm winter and the slump in the Wholesale business caused by the spread of the infectious disease. In Europe, too, net sales declined significantly.
Recommend
More recommend
