II. Performance and Outlook


(4) Performance by Region
Overall domestic sales declined due to the effects of a drop in domestic sales of cosmetics.
In North America, Shiseido Relaxing Fragrance and new makeup products performed well, but sales in that region were down due to the yen's appreciation. Sales in Europe rose due to steadily expanding revenues of our sales subsidiaries in Germany and Italy. Despite concern about the effects of economic crises in various Asian nations, sales in China, where cosmetics continue to gain in popularity, rose significantly, and overall sales in Asia/Oceania were up in yen terms.

Sales by Geographic Segment

(Millions of yen)

Fiscal
1999

Percent
of
Net Sales

Fiscal
1998

Percent
of
Net Sales

Increase/Decrease over
Fiscal 1998

Amount

% change

Domestic Sales

511,790

84.7%

530,443

85.4%

-18,653

-3.5%

North America
Europe
Asia/Oceania

25,443
47,739
19,321

4.2%
7.9%
3.2%

28,373
43,670
18,422

4.6%
7.0%
3.0%

-2,929
4,068
899

-10.3%
+9.3%
+4.9%

Total Overseas
Sales

92,504

15.3%

90,466

14.6%

2,038

+2.3%

Net Sales

604,294

100.0%

620,909

100.0%

-16,614

-2.7%


Income by Geographic Segment

(Millions of yen)

Fiscal
1999

Percent
of
Regional
Sales*

Fiscal
1998

Percent
of
Regional
Sales*

Increase/Decrease over
Fiscal 1998

Amount

% change

Domestic Income
from Operations

40,833

7.8%

43,318

8.0%

-2,484

-5.7%

North America
Europe
Asia/Oceania

1,432
3,156
2,299

4.6%
6.4%
11.7%

2,012
2,751
2,099

5.7%
6.0%
11.0%

-579
404
199

-28.8%
+14.7%
+9.5%

Total Overseas
Income from
Operations

6,887

6.9%

6,863

6.8%

24

+0.4%

Operating Expenses
for Noncategorized
Spending

(12,359)

-

(12,069)

-

(290)

+2.4%

Income from
Operations

35,361

5.9%

38,112

6.1%

-2,751

-7.2%

* Based on regional sales, including sales between regions.

Overseas Sales

(Millions of yen)

 

Fiscal
1999

Percent
of
Net Sales

Fiscal
1998

Percent
of
Net Sales

Increase/Decrease
over Fiscal 1998

Amount

%
change

%
in local
currency
terms

Americas
Europe
Asia/Oceania

28,405
42,558
22,591

4.7%
7.1%
3.7%

29,077
40,290
22,850

4.7%
6.5%
3.7%

-672
2,267
-259

-2.3%
+5.6%
-1.1%

+9.3%
+11.6%
+8.5%

Overseas Sales

93,554

15.5%

92,218

14.9%

1,336

+1.4%

+10.1%


Sales by Category Segment (reference)

(Millions of yen)

Fiscal
1999

Percent
of
Net Sales

Fiscal
1998

Percent
of
Net Sales

Increase/Decrease over
Fiscal 1998

Amount

% change

Cosmetics
Domestic
Overseas

444,495
364,819
79,675

73.6%
60.4%
13.2%

457,332
379,603
77,729

73.7%
61.2%
12.5%

-12,837
-14,783
1,946

-2.8%
-3.9%
+2.5%

Toiletries

98,938

16.4%

99,310

16.0%

-371

-0.4%

Others
Domestic
Overseas

60,860
46,980
13,879

10.0%
7.7%
2.3%

64,267
49,777
14,489

10.3%
8.0%
2.3%

-3,406
-2,796
-609

-5.3%
-5.6%
-4.2%

Net Sales

604,294

100.0%

620,909

100.0%

-16,614

-2.7%


Appropriation of Fiscal 1999 Profit

Dividend Policy
For fiscal 1999, we plan to raise annual cash dividends by 0.75 yen to 14.00 yen per share (including the interim dividend of 7.00 yen per share). For the year, therefore, this will mean a dividend payout ratio of 45.1% (nonconsolidated) and dividends on equity of 1.6% (nonconsolidated).

Retirement of Treasury Stock
In the June 1998 Annual Meeting of Shareholders, Shiseido changed its Articles of Association to allow the buyback and retirement of a maximum of 42 million shares of treasury stock by resolution of the Board of Directors. In fiscal 1999, the Company bought back and retired 6.4 million shares, accounting for 1.5% of total shares issued and outstanding and amounting to 9.15 billion yen.


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