For investors IR topics / Financial highlights

  1. Top
  2. For investors
  3. IR topics / Financial highlights

IR topics

Performance review and future efforts

On August 11, 2021, we published a financial result for the third quarter of the fiscal year ending September 2021.   

The followings are detailed result and our future efforts.

About the third quarter (of the fiscal year ending September 2021) in the 19th period

 As for Japan’s economy during the third quarter of the consolidated fiscal year, market for inbound visitors remained almost vanished, but export and production mainly to China is on the increase. Personal consumption partially rebounded because measures to prevent the spread of COVID-19 and revitalization of business activities were tried to be reconciled, but the second state of emergency was declared in January 2021, which was lifted in March, then the third and the fourth states of emergency were declared in April and July, respectively. The future of Japan’s economy is still unclear because COVID-19 is not under control and business failures and unemployment continue to increase due to restraint of economic activities.

 In these circumstances, we have been implementing active measures suited for characteristics of each group company aiming at business recovery, and we have moved operating profit of the cosmetic wholesale business and the hygiene consulting business into the black on a single month basis.

 From the above result, our business performance of the third quarter of this consolidated fiscal year was 1,740,092,000 yen in sales (increase of 24.2% compared to the same quarter of the previous year), while the operating loss was 126,991,000 yen (Operating loss in the same quarter of the previous year was 270,883,000 yen), the ordinary loss was 128,954,000 yen (ordinary loss in the same quarter of the previous year was 276,819,000 yen), and the net loss in this period attributable to shareholders of the parent company was 77,498,000 yen (the net loss attributable to shareholders of the parent company in the same quarter of the previous year was 296,752,000 yen).

 

■ Communication sales business

 The sales of the communication sales business was 996,117,000 yen (increase of 8.5% compared to the same quarter of the previous year) and the loss by segment was 57,425,000 yen (loss by segment in the same quarter of the previous year was 255,871,000 yen). Although there is a loss by segment, the performance increased significantly compared to the same quarter of the previous year.

 As for the future measures, we have been aiming at enlarging revenue by rebuilding sales system to gain more repeat and regular customers, dealing with the customers who haven’t done business with us for a certain period of time, and encouraging cross sell, based on new customer acquisition by strengthening web promotion since the previous period. However, increase rate of new customers acquired by web promotion was lower than expected. In order to expand overseas sales channel, we conduct active promotional activities to expand awareness. For example, we used Chinese SNS “RED” and “Weibo” and gained about 38,000 followers in a short time. We started general trade of Sparkling Clear Pack in Vietnam and began selling in cosmetic stores in Thailand and we were developing market with a central focus on Southeast Asia at a satisfactory pace, but we had to cancel additional business meeting due to restriction to prevent the spread of COVID-19.

 

■ Cosmetics wholesale business

 The sales of cosmetic wholesale was still affected by COVID-19 pandemic, and loss of inbound demand was considerable large, resulting the sales of 382,335,000 yen (loss of 15.6% compared to the same quarter of the previous year) and the loss by segment of 61,449,000 yen (loss by segment in the same quarter of the previous year was 4,190,000 yen), which were much lower than the same quarter of the previous year.

 This term we strived for domestic sales recovery and expansion of e-commerce by strengthening advertising and sales promoting activities to find new customers, using Instagrammers and Youtubers as the new measure to strengthen appeal to exfoliating market. However, the impact of COVID-19 pandemic was severe, causing significant decrease in domestic wholesale performance compared to the previous year. As for overseas sales which we have been working on since the previous fiscal year, Natural Aqua Gel has been boosting its sales satisfactorily, and White Clear Gel, our new cosmeceutical exfoliating product, was also ordered along with Natural Aqua Gel at 618, the big exhibition in China. As a result, the overseas sales greatly exceeded those of the previous year, and we restored profitability in the third quarter of the consolidated fiscal year.

 

■ Hygiene consulting business

 The sales of hygiene consulting business was 108,165,000 yen (increase of 236.6% compared to the same quarter of the previous year) and loss by segment was 17,628,000 yen (loss by segment in the same quarter of the previous year was 38,913,000 yen). Although there is a loss by segment, the performance increased significantly compared to the same quarter of the previous year, and we moved into the black in June on a single month basis.

 As for the future measures, we will focus on expanding sales of “DevirusAC” (space sterilization device) by working with major companies, increasing agents, and implementing sales promotion activities. As we have been disclosing actively, sales have expanded steadily; verification of using chlorous acid water “Klorus sterilization water” for sterilization during surgery of Holstein cow in Hokkaido was started by Hokkaido University, we provided infectious disease prevention solutions for tourism in Monbetsu city in Hokkaido, healthcare facilities operated by Kameyama city in Mie Prefecture, and major tutoring school. To deal with such sales expansion, we opened a new plant to manufacture dilution water on December 15, 2020. We also concluded the partnership agreement on demonstration experiments in a high performance photocatalyst (developed by Teruhisa Ohno, Kyushu Institute of Technology), which Nakama City in Fukuoka Prefecture has been working on to create “a safe space to protect from viruses” and began experimenting. However, as to boosting potential demand for hygiene service in restaurants and food factories, which is our origin, recovery of restaurants seems to take time due to impact of COVID-19 pandemic.

 

■ Aroma business

 The sales of aroma business which was added to the reporting segment since this third quarter of this consolidated fiscal year was 256,345,000 yen and loss by segment was 22,422,000 yen.

 “Aroma Bloom” operated by aromatherapy business sells general goods focusing on aromatherapy products such as essential oils, which fitted for various scenes and concepts. We operate 39 lifestyle-theme stores (as of June 30, 2021) to offer aroma and relaxation for your life in Tokyo and adjacent prefectures. We actively implement measures to improve synergy effect of our group: for example, the products of Favorina and Cure, our affiliate subsidiaries, are now available in Aroma Bloom stores, and at the same time, we have started to sell aroma products to customers of communication business. However, we had to close five stores due to the state of emergency was declared in April, causing to fall below the earlier estimate of sales.

 

 

About our future efforts

 As described in “Notice of completion of assignment of aroma business and commence of new business (progress of disclosed matters)”, assignment of aroma business was completed and commenced the business from April 1, and “Aroma business” was added to the reporting segment since this third quarter of this consolidated fiscal year. In addition, the business segment “Others” is added as the segment not included in the reporting segment because the sales of gray hair dyeing business was posted.

 We keep on focusing more on M&A toward start-up business to enhance our group’s value.

 Assuming that the impact of COVID-19 pandemic on our company group business will last this period, our future efforts are as follows:

 To restore profitability of the communication sales business, we keep focusing on web promotion, along with releasing new products like “Favorina Rose Veil”, the supplement that contains natural rose extract with the effects on health and beauty, and “Vital Conditioning Dot Clear”, the face-wash powder that helps to keep your pores clean, as we announced through our website.

 The cosmetic wholesale business will improve performance by exhibiting our new product “Medicated White Clear Gel” in drug stores, strengthening domestic e-commerce through Instagrammers and Youtubers, and developing market with a central focus on Southeast Asia.

 The hygiene consulting business will restore profitability by focusing sales of much-needed “DevirusAC” (space sterilization device). In addition, development of HACCP app for restaurants supervised by HACCP has been completed successfully and need for “BACTESTER” (fluorescent image measurement apparatus for microbe) seems to increase.

 The aroma business will erase chronic deficits by closing unprofitable stores. For example, two stores will be closed within this period. We also opened pop-up stores in major terminal stations to promote brand awareness and to guide customers to stores and EC site. Furthermore, we will restore profitability and extend performance early by strengthening store staff training and redesigning merchandizing strategy.

 The consolidated performance forecast for the fiscal year ending September 2021 is still not yet determined because reasonably assessing the consolidated performance forecast is deemed impossible due to factors like COVID-19 at this point.

 We will announce the forecast as soon as there is the prospect for an end to the spread of COVID-19 and the effect to performance becomes predictable.

 Moreover, we will make a commitment to our business to resume dividends as soon as possible.


August 2021

 

Financial highlights

Change of business records

Amount of sales

The 13th The 14thThe 15thThe 16thThe 17thThe 18th
2,3734,3112,6682,2481,9581,967

(Unit: one million yen)

Business profit/sales ratio

The 13thThe 14thThe 15thThe 16thThe 17thThe 18th
Business profit8727711137△231△397
Sales ratio3.76.44.21.7△11.8△20.2

(Unit: one million yen/%)

Ordinary profit/sales ratio

The 13thThe 14thThe 15thThe 16thThe 17thThe 18th
Ordinary profit7726016125△226△405
Sales ratio3.26.06.01.1△11.6△21

(Unit: one million yen/%)

Net income attributable to owners of the parent/sales ratio

The 13thThe 14thThe 15thThe 16thThe 17thThe 18th
Net income
attributable to
owners of the parent
31122200△45△367△464
Sales ratio1.32.87.5△2.0△18.8△23.6

(Unit: one million yen/%)

Change of financial condition

Gross asset

The 13thThe 14thThe 15thThe 16thThe 17thThe 18th
2,8823,2113,2683,1132,5802,026

(Unit: one million yen)

Net asset

The 13thThe 14thThe 15thThe 16thThe 17thThe 18th
1,1621,2821,4781,4341,037673

(Unit: one million yen)

Own capital/gross asset ratio

The 13thThe 14thThe 15thThe 16thThe 17thThe 18th
Own capital1,1521,2741,4741,4281,031663
Gross asset ratio40.039.745.145.940.032.7

(Unit: one million yen/%)

Change of cash flow

Cash flow from business operations

The 13thThe 14thThe 15thThe 16thThe 17thThe 18th
△14424424093△186△233

(Unit: one million yen)

Cash flow from investments

The 13thThe 14thThe 15thThe 16thThe 17thThe 18th
△591344166△12444

(Unit: one million yen)

Free cash flow ※1

The 13thThe 14thThe 15thThe 16thThe 17thThe 18th
△735248284260△311△188

(Unit: one million yen)

Cash flow from financial activities

The 13thThe 14thThe 15thThe 16thThe 17thThe 18th
623133196△156△177△99

(Unit: one million yen)

Cash and cash equivalents at end of year

The 13thThe 14thThe 15thThe 16thThe 17thThe 18th
7241,1031,5861,6901,201969

(Unit: one million yen)

Information per share

Net profit per share

The 13thThe 14thThe 15thThe 16thThe 17thThe 18th
4.7917.4929.21△6.67△54.08△68.02

(Unit: yen)

PER ※2

The 13thThe 14thThe 15thThe 16thThe 17thThe 18th
53.419.815.6

(Unit: times)

Net asset per share

The 13thThe 14thThe 15thThe 16thThe 17thThe 18th
167.76185.56214.75208.04152.1594.99

(Unit: yen)

PBR ※2

The 13thThe 14thThe 15thThe 16thThe 17thThe 18th
1.51.82.12.83.24.8

(Unit: times)

Others

Total number of issued shares ※3

(Unit: share)






















The 13th The 14th The 15th
6,973,470 6,973,470 6,973,470
The 16th The 17th The 18th
6,973,470 6,973,470 7,175,570

Number of employees ※4

The 13thThe 14thThe 15thThe 16thThe 17thThe 18th
1171101011039995

(Unit: people)

※1 Free cash flow is calculated as “cash flow from business operations + cash flow from investments”
※2 PER and PBR are calculated from the market price at the end of each fiscal year.
※3 Total number of issued shares at the end of each fiscal year (including treasury shares)
※4 Temporary employees are not included.

pagetop