SHISEIDO COMPANY, LIMITED
(Translation)
Dear Sirs and Madams,
June 30, 2015
Name of Company: Shiseido Company, Limited
Name of Representative: Masahiko Uotani President & CEO (Representative Director)
(Code No. 4911; The First Section of the Tokyo Stock
Exchange)
Contact: Tetsuaki Shiraiwa
General Manager of Investor
Relations Department
(Tel: +81 -3 - 3572 - 5111)
It is hereby notified that today, at the meeting of the Board of Directors, Shiseido Co., Ltd. (the "Company") determined that it would let its wholly owned subsidiary, Shiseido Sales Co., Ltd., ("Shiseido Sales") take over part of the Company's cosmetics business in Japan (the "Object Business") through a company split (absorption-type split) effective October 1, 2015. The Board of Directors also resolved that the trade name of Shiseido Sales would be changed to "Shiseido Japan Co., Ltd." in order to clarify its position as the regional headquarters in Japan.
Since this is a simple absorption-type split carried out between the Company and its wholly owned subsidiary, we omit part of the matters to be disclosed.
1. Purposes of this absorption-type split, etc.:
We are pushing forward with a wide range of reforms as we strive to realize "VISION 2020," the medium-to-long term strategy we announced in December of last year. As part of the strategy, in order to develop strong brands and ensure implementation of marketing programs that suit each region of the world, we have started to shift to a new matrix organizational structure based on the brand axis and regional axis. Under this system, we divide our business into several categories by point of contact with customers such as "prestige," "cosmetics," "personal care," "digital," and others. Under the regional axis, we divide the regions and markets of the world into Japan, China, Asia, the Americas, Europe, and Travel Retail. By combining these categories and regions/markets, we are establishing the optimal organizational structure for global business operations.
In shifting to the new organizational structure, we emphasize "regional, front-line focus," "flat organization," "speed," and "accountability." For each region, we will set up a regional headquarters that has authority and responsibility for all business activities in the region, and each headquarters will make the maximum use of local needs and know-how to establish a system that exceeds in
executive ability.
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As part of these initiatives, the Company aims to build an integrated framework. Functions of R&D, product development and sales are to be integrated under new framework for adequate and prompt response to changes of consumers and marketing environment in Japanese cosmetics market, one of the most significant markets for the Shiseido Group. Toward this end, the Company will execute this absorption-type split to let Shiseido Sales take over part of the Company's business, set up Japanese regional headquarters based on Shiseido Sales, and change its trade name.
2. Main points of the absorption-type split: (1) Schedule
Date of resolution of the Board of Directors | June 30, 2015 |
Date of conclusion of an agreement | August 31, 2015 |
Date of effectuation | October 1, 2015 |
(Note) For the Company, this is a simple absorption-type split as stipulated in Article 784
Paragraph 2 of the Companies Act. Therefore, the Company will not convene a general meeting of shareholders to seek approval for the agreement of the absorption-type split.
(2) Method
This absorption-type split involves the Company spinning off part of its business and
Shiseido Sales taking it over.
(3) Allotment of shares
Since this absorption-type split is carried out between the Company and its wholly owned subsidiary, none of the Company's shares will be allotted in conjunction with the split, nor will any equivalent value be paid.
(4) Handling of subscription warrant and bonds with subscription warrant
Not applicable
(5) Capital increase or decrease
There will be no capital increase or decrease.
(6) Rights and duties taken over by the successor company
Shiseido Sales will take over all assets and liabilities and contractual statuses it needs to execute the business it takes over, as well as all rights and obligations that accompany them.
(7) Prospect of performing obligations
The Company determines that there is no problem as to whether Shiseido Sales can perform its obligations after the absorption-type split.
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3. Overview of the companies involved in the organizational restructuring:
Splitting company (Shiseido) | Successor company (Shiseido Sales) | |
(1) Name | Shiseido Co., Ltd. | Shiseido Sales Co., Ltd. |
(2) Location | 5-5, Ginza 7-chome, Chuo-ku, Tokyo | 27-16, Shiba 5-chome, Minato-ku, Tokyo |
(3) Representative's name and position | Masahiko Uotani, Representative Director, President & CEO | Toru Sakai, President and Representative Director |
(4) Main business lines | Research, development, manufacture, and sale of cosmetics and other products | Sale of cosmetics and other products in Japan |
(5) Capital | 64,506 million yen | 100 million yen |
(6) Date of establishment | June 24, 1927 | December 1, 1927 |
(7) Number of shares issued | 400,000,000 | 31,805,299 |
(8) Settlement term | December 31 (starting from the term to December 2015) | December 31 (starting from the term to December 2015) |
(9) Major shareholders and shareholding ratios | JP MORGAN CHASE BANK 380055: 7.44% The Master Trust Bank of Japan, Ltd. (trust account): 7.11% Mizuho Bank, Ltd.: 5.32% Japan Trustee Services Bank, Ltd.(trust account): 3.40% Shiseido Employees' Stockholding: 2.35% Sompo Japan Nipponkoa Insurance Inc.: 1.48% Nippon Life Insurance Company: 1.40% Mitsui Sumitomo Insurance Co., Ltd.: 1.40% THE BANK OF NEW YORK MELLON SA/NV 10: 1.32% STATE STREET BANK AND TRUST COMPANY: 1.31% | Shiseido Co., Ltd.: 100% |
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Splitting company (Shiseido) | Successor company (Shiseido Sales) | |
(10) Operating performance and financial condition of the most recent fiscal year | ||
Fiscal period | Fiscal year ended March, 2015 | Fiscal year ended March, 2015 |
Net assets | 346,843 million yen | 7,645 million yen |
Total assets | 601,186 million yen | 122,626 million yen |
Net asset per share (yen) | 867.04 yen | 240.38 yen |
Net sales | 241,099 million yen | 261,815 million yen |
Operating income (loss) | 19,074 million yen | -2,071 million yen |
Ordinary income (loss) | 39,933 million yen | -1,648 million yen |
Net income (loss) | 30,498 million yen | -2,043 million yen |
Net income (loss) per share (yen) | 76.49 yen | -64.26 yen |
4. Overview of Shiseido's business that is spun off: (1) Details of the business
Cosmetics business in Japan (planning and sale, etc. of cosmetics, cosmetics accessories, and toiletries)
(2) Operating performance of the Object Business
Net sales: 141,884 million yen (for the fiscal year ended March, 2015)
(Note) Over 99% of above mentioned net sales are sales to Shiseido Sales (internal sales).
(3) Assets and liabilities and their value (as of March 31, 2015)
Assets | Liabilities | ||
Item | Book value | Item | Book value |
Current assets | 474 million yen | Current liabilities | 772 million yen |
Fixed assets | 6,714 million yen | Fixed liabilities | 3,813 million yen |
Total | 7,189 million yen | Total | 4,585 million yen |
(Note) All these figures are calculated based on the balance sheet as of March 31, 2015. The amounts that are actually taken over will be adjusted taking into consideration increases and decreases in the amounts listed above which will arise by the date of effectuation.
5. State of affairs after the absorption-type split: (1) Splitting company
After this absorption-type split, the name, location, representative's name and position, main
business lines, capital, and fiscal period of the Company will remain unchanged.
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(2) Successor company
In conjunction with this absorption-type split, Shiseido Sales will change its trade name and the location of its registered head office on October 1, 2015. With the approval of the Company's 115th annual general meeting of shareholders held on June 23, 2015 through its resolution, the Company changed its fiscal period from March 31 to December 31 of each year, and with this change, Shiseido Sales has also changed its fiscal period to December 31.
Name | Shiseido Japan Co., Ltd. |
Location | 5-5, Ginza 7-chome, Chuo-ku, Tokyo |
Representative's name and position | Toru Sakai, President and Representative Director |
Main business lines | Cosmetics business in Japan (planning and sale, etc. of cosmetics, cosmetics accessories, and toiletries) |
Capital | 100 million yen |
Settlement term | December 31 |
Net assets | 10,249 million yen |
Total assets | 129,815 million yen |
6. Future outlook:
This is an absorption-type company split by the Company with its wholly owned subsidiary as the successor company. We believe that the split has only minor effects on the consolidated financial results of the Shiseido Group for the fiscal year ending December, 2015. We think it will contribute to expanding the Shiseido Group's business in Japan and making it more efficient in the future.
-End of News Release-
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