IR Presentation
As a note, it is suggested to use this material only as a reference, as it contains information and data that are subject to changes without prior notice due to uncertainties, changes in the organizational structure, redefinition of accounting policies, etc., and may cause the actual results to differ from those stated or implied in this material. AMOREPACIFIC Corp. is a newly created company after the corporate restructuring in June 2006, and as AMOREPACIFIC Corp. continues the core business of the pre-demerger company, the information in this material is based on such operations, assuming no demerger for ease of comparison with the past data.
[1]
▌ ▌
Vision History
Table of Contents
Company Overview
Business Overview ▌
▌ ▌ ▌ ▌
Sustaining Growth Enhancing Profitability Sale Breakdown Leading the Domestic Market Overseas Business
Appendices ▌ ▌ ▌
Financial Summary Corporate Governance AMOREPACIFIC in Global Market
[2]
Company Overview
Global total-care provider of Beauty & Health
Vision by 2015
“Asian Beauty Creator”
Aiming For 2015 Beauty
Health
‘Outer’ Beauty 10 Mega-brands KRW 4 tn
‘Inner’ Beauty 5 Mega-brands KRW 1 tn
ⓒ AMOREPACIFIC 2010. Proprietary and Confidential. All Rights Reserved.
[3]
Company Overview
Sales of KRW 5tn ▶ Beauty 80% of total sales KRW 4tn
Overseas (KRW 1.2tn)
‘Outer Beauty’ Global Top 10 10 mega-brands
AMOREPACIFIC, Etude, AMOS Professional, etc. 30% sales contribution from overseas
Become the „Asian Beauty Creator‟ Accelerate expansion in China Strengthen brand portfolio while developing new markets
Overseas
Customers ▶ Health KRW 1tn
20% of total sales ‘Inner Beauty’ Lifetime Health 5 mega-brands AMOREPACIFIC, Pacific Pharmaceuticals, etc.
Develop niche markets through customer segmentation Launch new products through intensified R&D and marketing activities
ⓒ AMOREPACIFIC 2010. Proprietary and Confidential. All Rights Reserved.
Vision by 2015
The companies under PACIFIC group share the same vision of becoming the ‘Asian Beauty Creator,’ a global player that creates new standards for Asian beauty, both inner and outer, and promotes Asian beauty to the global audience. To achieve this vision, AMOREPACIFIC is putting efforts into nurturing a strong portfolio of mega-brands in the area of beauty and health, simultaneously strengthening its presence in the overseas market.
Expand Beauty & Health related businesses Develop strategic joint ventures
New Business Distribution Proactively respond to changes in the distribution network Sustain market visibility
[4]
Company Overview
1945 Early Years
1968 Growth Stage
1991 Innovation Stage
1997 Entering the Global Arena
1945 Founded
1971 Initiated
1991 Refocus on
2002 Launched
1954 Korea’s first
1973 Company goes
1992 Declared
2004 Announced
1990 Opened office
1993 Declared Total
2006 Holding
cosmetics R&D center
1964 Adopted doorto-door sales method
Korea’s first makeup campaign public
in Paris, France
Beauty & Health business
Management Philosophy Commitment initiatives
ⓒ AMOREPACIFIC 2010. Proprietary and Confidential. All Rights Reserved.
History
For more than 60 years, AMOREPACIFIC has been devoted to the business of Beauty and Health, consistently striving to be the best with focus on technology, quality and customers. AMOREPACIFIC has maintained its position as Korea’s leader in the field of cosmetics and is now looking beyond into becoming the ‘Asian Beauty Creator,’ a major global player that redefines and promotes the Asian beauty to customers all over the globe.
Laneige in Hong Kong
Global Vision 2015 company restructuring
[5]
Business Overview
Domestic Sales Trend (KRW bn)
Overseas Sales Trend (KRW bn)
15.5%
43.2%
12.8% 22.3%
6.6%
5.5%
1,531 1,357 1,273 1,167
34.0%
1,769
9.1%
11.6%
295
234 9
249
250
157 1,474 109
1,270
1,023
911
9
1,108
2006
Cosmetics
9 63
2007 MC&S
2008
283 12 97
175 8
96
78 174
47 53
2005
20.9%
262
256
Sustaining Growth
Since 2000, AMOREPACIFIC has generated sustainable sales in both the domestic and overseas markets. In the upcoming years, the company is expected achieve 10% sales growth in the domestic market while expanding into the overseas market with more than 20% sales growth annually.
85
89
2006
2007
129
2009 Growth Rate (%)
* MC&S (Mass Cosmetics and Sulloc): Personal Care and Green Tea Business
2005 Asia
France
ⓒ AMOREPACIFIC 2010. Proprietary and Confidential. All Rights Reserved.
USA
2008
2009 Growth Rate (%) [6]
Business Overview
Domestic Profitability Trend
69.4%
69.0%
70.3%
69.6%
71.3%
Overseas Net Profits Trend (KRW bn) 2005
2006
2007
2008
-2
-2
5
-5
-6
18.1%
18.3%
16.7%
17.0%
-7 -9
-3 -4
-4 -2
-4 -4
-9 18.7%
2009
Enhancing Profitability
Gradual margin enhancement is expected for the domestic business through better product mix and distribution efficiencies, added with TCR efforts throughout all divisions. As for the overseas, profitability is still in the red due to the Company’s expansion efforts, but is gradually enhancing as the Company expects to break even after 2010.
-20
-14
-16
-18 -4 -26 2005
2006 OP Margin
2007
2008 GP Margin
2009 Asia
ⓒ AMOREPACIFIC 2010. Proprietary and Confidential. All Rights Reserved.
France
US
[7]
Business Overview ▶ Cosmetics
▶ Personal Care & Green Tea
Outstanding R&D, creative marketing and customer service
Focus on hair, body, oral and green tea products
Strong brand cultivation and regional expansion
83%
2009 Sales
Simple and concentrated branding efforts
17%
Solidifying competitiveness in the Asian market
Developing Korean tea culture
Sales Breakdown
Domestic Sales Breakdown
Sales Breakdown by channel 22%
20%
18%
17%
17%
7%
6%
6%
6%
5%
3%
3%
5%
5%
6%
9%
9%
11%
12%
14%
14%
15%
16%
16%
17%
17%
17%
37%
38%
37%
35%
32%
2005
2006
2007
2008
2009
3%
4%
5%
Personal Care & Green Tea Others* Internet & Home shopping Discount store Specialty store Department store Door-to-door
* Other sales include direct sales, export sales and other minor sales
ⓒ AMOREPACIFIC 2010. Proprietary and Confidential. All Rights Reserved.
[8]
Business Overview
Domestic Market Size and AP’s Market Share
Premium* Total
Mass**
43.4%
32.7% 17.2%
45.6%
35.2% 19.6%
44.2%
34.3% 20.2%
43.0%
34.3% 21.7%
42.2% 35.1% 24.8% (KRW TN, Retail Value)
* Premium Channels include Department stores and Door to Door ** Mass Channels include Specialty stores and Discount stores
Leading the Domestic Market
AMOREPACIFIC has been outperforming the cosmetics market, strengthening its competency in the field of Beauty and Health. The Company is adding efforts to build stronger brands by appropriately responding to market changes and needs, and is also taking the initiatives to adopt a more balanced channel portfolio.
7.4 5.2
5.4
2005
2006
5.9
2007
ⓒ AMOREPACIFIC 2010. Proprietary and Confidential. All Rights Reserved.
6.6
2008
2009 [9]
Business Overview
Sales by Region
“MARKETING” ▶ France
'09
12
'08
9
'09
97
'08
96
First introduction in 1997, nurtured ‘lolita Lempicka’ to become one of the top 5 fragrances in France Lolita Lempicka expanding globally introducing its second line in 2006 and third line in 2009
▶ The United States Enhance brand awareness AMOREPACIFIC, with 30 locations across the United States
'09
174
'08
129
(In KRW bn)
Overseas Business
As the world is consolidating into a ‘one-big-market,’ AMOREPACIFIC is accelerating its globalization efforts to construct a strong foothold in the world market. AMOREPACIFIC’s overseas operations are employing local professionals with vast experience and knowledge on each region’s market and customers for successful launches and expansion.
“GROWTH” ▶ Asia The main focus of AMOREPACIFIC’s overseas expansion
Introduction of domestic brands into the department stores Laneige, with more than 400 counters across Asia
ⓒ AMOREPACIFIC 2010. Proprietary and Confidential. All Rights Reserved.
[10]
APPENDIX
2008
(KRW bn)
2009 %
1,531.3
Sales
%
100.0 1,769.0
100.0
Balance Sheet (KRW bn)
2008.12
2009. 12
1,455.2
1,664.0
445.1
550.3
1,010.0
1,113.8
339.9
364.3
Current Liability
199.4
217.2
Non-current Liability
140.4
147.1
1,115.3
1,299.7
34.5
34.5
712.7
712.7
-1.4
-1.8
30.9
24.4
338.6
529.9
Asset Current Asset
1,066.3
Gross Profit
69.6 1,261.1
71.3
Non-current Asset
Liability 811.1
SG&A Expense
255.2
Operating Profit Non-operating Profit
53.0 16.7
35.2
960.5
300.6
54.3 17.0
Shareholder’s Equity
33.3
Capital Non-operating Expense
Income Before Taxes
46.1
244.3
34.6
16.0
299.3
Capital Reserve 16.9
Capital Adjustment Accumulated Other
Net Profit
170.2
11.1
225.9
12.8
Inclusive Gain and Loss Retained Earnings
ⓒ AMOREPACIFIC 2010. Proprietary and Confidential. All Rights Reserved.
Financial Summary
Income Statement
[11]
www.amorepacific.co.kr Headquarters: Amorepacific Bldg., 181, Hangangro 2 Ga, Yongsan Gu, Seoul, Korea 140-777 TEL: 82-2-709-5103 / FAX: 82-2-709-5339 / Email:
[email protected]
