Shiseido Company (4911) Q4 2024 earnings summary

Executive summary

• Core operating profit for 2024 reached ¥36.4 billion, meeting targets globally, with strong gains in Japan and EMEA offsetting declines in Americas, China, and Travel Retail; net sales were ¥990.6 billion, down 1% like-for-like year-over-year.

• Profit attributable to owners was a deficit of ¥10.8 billion, mainly due to structural reform expenses and a ¥12.8 billion provision related to a seller note from a prior brand transfer.

• Structural reforms, cost reductions, and asset-light initiatives contributed to profit improvement, especially in Japan, but were offset by declines in Travel Retail and Americas.

• Dividend for 2024 was reduced to ¥40 per share (from ¥60), prioritizing long-term value, financial flexibility, and funding transformation.

• The "SHIFT 2025 and Beyond" strategy and "Action Plan 2025-2026" were launched to reinforce brand and operational foundations for sustainable profit growth.

Financial highlights

• Net sales: ¥990.6 billion (+1.8% year-over-year); like-for-like sales down 1.3%; core operating profit: ¥36.4 billion (-8.7% YoY); operating profit: ¥7.6 billion.

• Profit attributable to owners: ¥(10.8) billion; basic EPS: ¥(27.06); EBITDA: ¥89.6 billion.

• Non-recurring expenses included ¥28.8 billion for structural reforms and a ¥12.8 billion provision on a seller note.

• Free cash flow was -¥35.3 billion in 2024, mainly due to acquisition costs; expected to turn positive in 2025 as non-recurring items decrease.

• Dividend per share reduced to ¥40 for 2024; FY2025 dividend forecast maintained at ¥40 per share.

Outlook and guidance

• FY2025 net sales forecast: ¥995.0 billion (+0.4% reported, +4% like-for-like); core operating profit: ¥36.5 billion; profit attributable to owners: ¥6.0 billion.

• Operating profit expected to rise 78.2% to ¥13.5 billion; basic EPS forecast: ¥15.02.

• First half of 2025 expected to see a low single-digit sales decline, with high single-digit growth in the second half.

• Significant profit growth forecasted in Japan and Americas, with continued losses expected in China and Travel Retail.

• Targeting a 7% core operating profit margin by 2026; structural reforms to be completed by end of 2025.