II. Interim Performance


(4) Performance by Region and Overseas Sales
Overall domestic sales posted a modest increase thanks to improved revenues from our mainstay cosmetics business.
Sales in North America declined significantly due to lower revenues of Zotos International, Inc., coupled with the effects of the yen's appreciation. Sales in Europe grew in local currency terms, boosted by improved performances by sales subsidiaries in Germany and Italy, as well as BPI, but again the effects of the strong yen were felt. Sales in Asia and Oceania increased thanks to solid performances in most countries in the region. Amid economic recovery in Asia, Taiwan, a major market for the Company, performed well, while sales in China and Hong Kong also rose significantly.

Sales by Geographic Segment

(Millions of yen)

First Half
of Fiscal
2000

Percent
of
Net Sales

First Half
of Fiscal
1999

Percent
of
Net Sales

Increase/Decrease over
First Half of Fiscal 1999

Amount

% change

Domestic Sales

258,065

84.1%

256,962

83.6%

1,103

+0.4%

North America
Europe
Asia/Oceania

12,418
23,146
13,380

4.0%
7.5%
4.4%

14,577
25,840
9,916

4.8%
8.4%
3.2%

-2,158
-2,694
3,463

-14.8%
-10.4%
+34.9%

Total Overseas
  Sales

48,945

15.9%

50,334

16.4%

-1,389

-2.8%

Net Sales

307,011

100.0%

307,296

100.0%

-285

-0.1%


Income from Operations by Geographic Segment

(Millions of yen)

First Half
of Fiscal
2000

Percent
of
Net Sales*

First Half
of Fiscal
1999

Percent
of
Net Sales*

Increase/Decrease over
First Half of Fiscal 1999

Amount

% change

Domestic Income
from Operations

26,333

9.9%

18,555

7.1%

7,778

+41.9%

North America
Europe
Asia/Oceania

549
1,536
1,585

3.4%
6.4%
11.7%

1,011
2,301
1,283

5.7%
8.6%
12.7%

-461
-764
302

-45.7%
-33.2%
+23.5%

Total Overseas
  Income from
Operations

3,671

6.9%

4,595

8.4%

-923

-20.1%

Unallocatable
  Operating
  Expenses

(6,484)

-

(5,657)

-

(827)

+14.6%

Income from
Operations

23,521

7.7%

17,494

5.7%

6,026

+34.5%

* Based on regional sales, including sales between regions.

Overseas Sales

(Millions of yen)

 

First
Half of
Fiscal
2000

Percent
of
Net Sales

First
Half of
Fiscal
1999

Percent
of
Net Sales

Increase/Decrease over
First Half of Fiscal 1999

Amount

% change

% change
in local
currency
terms

Americas
Europe
Asia/Oceania

13,529
21,497
14,133

4.4%
7.0%
4.6%

16,251
22,965
11,919

5.3%
7.4%
3.9%

-2,721
-1,468
2,213

-16.7%
-6.4%
+18.6%

-2.6%
+14.1%
+28.0%

Overseas
  Sales

49,160

16.0%

51,136

16.6%

-1,976

-3.9%

+12.1%


Sales by Category Segment (reference)

(Millions of yen)

First Half
of Fiscal
2000

Percent
of
Net Sales

First Half
of Fiscal
1999

Percent
of
Net Sales

Increase/Decrease over
First Half of Fiscal 1999

Amount

% change

Cosmetics
  Domestic
  Overseas

229,561
187,026
42,535

74.8%
60.9%
13.9%

227,423
183,988
43,435

74.0%
59.9%
14.1%

2,138
3,038
-900

+0.9%
+1.7%
-2.1%

Toiletries
  Domestic
  Overseas

46,911
46,793
118

15.3%
15.3%
0.0%

48,778
48,778
-

15.9%
15.9%
-

-1,866
-1,985
118

-3.8%
-4.1%
-

Others
  Domestic
  Overseas

30,537
24,030
6,506

9.9%
7.8%
2.1%

31,094
23,393
7,700

10.1%
7.6%
2.5%

-557
636
-1,193

-1.8%
+2.7%
-15.5%

Net Sales

307,011

100.0%

307,296

100.0%

-285

-0.1%


(5) Appropriation of Interim Profit

(a) Dividend Policy
For the interim period under review, Shiseido plans to pay a dividend of 7.00 yen per share, consistent with initial forecasts. This will mean a dividend payout ratio of 28.9% (nonconsolidated) and dividends on equity of 0.7% (nonconsolidated).

(b) 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. Due to concern about funding, market trends, and other circumstances, the Company did not buy back shares in the six months under review. However, we plan to buy back and retire shares amounting to a maximum of 5.0 billion yen by the next Annual Meeting of Shareholders.


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