Vega Corporation Co., Ltd. · TSE:3542
Vega — FY2020 Earnings Presentation
39 slides from Vega's earnings presentation, Mar 31, 2020
Slide 1: Full-year Financial Results for the Fiscal Year Ended March 31, 2020
Full-year Financial Results for the Fiscal Year Ended March 31, 2020 Vega corporation Co., Ltd. Securties code: 3542
Slide 2: Agenda
■ Agenda 1.Overview of Financial Results for the Fiscal Year Ended March 31, 2020 2.Report on LOWYA Business 3.Report on DOKODEMO Business 4.Future Development 5.Financial Results Forecast 6.Appendix 1 Copyright 2020 VEGA corporation. All Rights Reserved.
Slide 3: Financial Highlight
■ Financial Highlight Net sales: 13,570 million yen (101.9％ YoY) Results Overview Operating profit: 116 million yen ((296) million yen in the previous fiscal year) Net sales and ordinary profit increased due to early profit ・ improvement and steady progress made in enhancing the flagship store Net s
Slide 4: 1. Overview of Financial Results for the Fiscal Year Ended March 31, 2020
1. Overview of Financial Results for the Fiscal Year Ended March 31, 2020 3 Copyright 2020 VEGA corporation. All Rights Reserved.
Slide 5: Statement of Income
■ Statement of Income Substantial profit recovery due to company-wide cost reductions amid cost of sales ratio improvement and delivery expense ratio controls (Million yen) Fiscal year ended Fiscal year ended Sales ratio Sales ratio Change YoY March 31, 2019 March 31, 2020 Net sales 13,322 100.0% 13
Slide 6: Net Sales
■ Net Sales The Company has achieved net sales increases for the 16th consecutive year since its establishment (Million yen) 13,570 16,000 Brand building period 14,000 Reviewed services 12,000 Strengthened the LOWYA Started test flagship store Started business brand promotion 10,000 building 8,000 1
Slide 7: Operating Profit
■ Operating Profit Shift to profitability early on as a result of profit improvement of the LOWYA business and heightened efficiency of R&D (Million yen) (%) 20 R&D expenses 1,300 13.4 10.9 Operating profit 11.0 8.5 Operating profit ratio 1,100 6.9 7.6 10 8.5 263 4.3 900 0.9 0 700 346 -2.2 4 124 -10
Slide 8: Increases and Decreases in Operating Profit
■ Increases and Decreases in Operating Profit (Million yen) Positive factor Delivery Negative factor Cost of sales expenses Fixed costs 116 Selling Logistics expenses expenses(*1) (296) ↓183 ↑54 New Personnel business Sales expenses ↑168 ↑263 ↓130 Advertising expenses ↓74 ↓52 ↑143 ↑224 Fiscal year e
Slide 9: Balance Sheet
■ Balance Sheet Product inventory decreased by 627 million yen as optimization of product inventory has progressed steadily The Company repaid 500 million yen in loans (Million yen) Previous fiscal year Current fiscal year Previous fiscal year Current fiscal year (as of March 31, 2019) (as of March
Slide 10: 2. Report on LOWYA Business
2. Report on LOWYA Business 9 Copyright 2020 VEGA corporation. All Rights Reserved.
Slide 11: 2-1. Report on LOWYA Business <Overall>
2-1. Report on LOWYA Business <Overall> 10 Copyright 2020 VEGA corporation. All Rights Reserved.
Slide 12: Overall LOWYA Business: Current Fiscal Year Report
■ < Overall LOWYA Business> Current Fiscal Year Report Net sales increased due to flagship store growth, and despite decrease in marketplace stores Substantial profit recovery due to company-wide cost reductions (Million yen) Previous fiscal year Sales ratio Current fiscal year Sales ratio YoY Net s
Slide 13: Cost of Sales Ratio and Delivery Expense Ratio
■< Overall LOWYA Business> Cost of Sales Ratio and Delivery Expense Ratio Delivery expense ratio remained high and cost of sales ratio improved substantially due to the review of sales prices and product lineup (%) (%) 20 Delivery expense ratio Cost of sales ratio 52 50.1 18.0 17.9 50 17.6 17.9 48.7
Slide 14: Management Indicators
■ < Overall LOWYA Business> Management Indicators The number of visitors increased due to efficient advertising Average customer spend increased as a result of the review of sales prices and product lineup Fiscal year ended March 31, 2019 Fiscal year ended March 31, 2020 Item 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Slide 15: Net Sales by Sales Channel
■ < Overall LOWYA Business> Net Sales by Sales Channel Net sales at the flagship store increased by 75.2% YoY Sales are smoothly shifting to the flagship store Rakuten Amazon Net sales by sales channel Yahoo Flagship store * Ratios shown below are YoY comparisons Rakuten marketplace store: down 14.6
Slide 16: 2-2. Report on LOWYA Businesses <Flagship Store>
2-2. Report on LOWYA Businesses <Flagship Store> 15 Copyright 2020 VEGA corporation. All Rights Reserved.
Slide 17: Sales Ratio by Sales Channel
Flagship ■< store LOWYA Businesses> Sales Ratio by Sales Channel 4Q net sales at the flagship store increased by 1,464 million yen Flagship store ratio increased to 39.8％ Net sales (Million yen) Flagship store 39.8% 4,000 Marketplace store 40.0% Flagship store ratio 34.4% 35.0% 30.3% 3,000 30.0% 25.
Slide 18: Flagship Store Management Indicators
Flagship ■< store LOWYA Businesses> Management Indicators As efficient advertising, initiatives to enhance SEO and SNS contributed to a 78.6% YoY increase in the number of visitors and higher net sales Fiscal year ended March 31, 2019 Fiscal year ended March 31, 2020 Item 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q (Ap
Slide 19: Flagship Store Net Sales
Flagship ■< store LOWYA Businesses> Net Sales Efficient online advertising resumed in 2Q The number of visitors increased by 78.6% YoY Net sales (Million yen) (UU) 1600 Net sales 731 million 800 1400 Number of visitors UU 700 1200 600 1000 409 million UU 500 800 400 600 300 400 200 200 100 0 0 1Q 2Q
Slide 20: Measures: SNS
Flagship ■< store LOWYA Businesses > Measures: SNS Enhancing reciprocal links between SNS and e-commerce websites Implementing measures for promoting initial and repeat access, and for gaining fans Knowledge Discovery Offline advertising Instagram Live Photography Online advertising enhancement Info
Slide 21: Measures: Technology-related
■< Flagship store LOWYA Businesses > Measures: Technology-related VR-enabled “LOWYA 360,” which recreates realistic environment “LOWYA Search by Appearance,” image search function featuring artificial intelligence (AI) Successive releases of solutions developed in-house LOWYA 360 LOWYA Search by App
Slide 22: 3. Report on DOKODEMO Business
3. Report on DOKODEMO Business 21 Copyright 2020 VEGA corporation. All Rights Reserved.
Slide 23: DOKODEMO Business: Management Indicators
■ DOKODEMO Business: Management Indicators Membership and the number of APP DLs are growing smoothly Strengthen Customer Relationship Management (CRM) to further increase repeat customers Fiscal year ended Fiscal year ended Item March 31, 2019 March 31, 2020 YoY Results Results Membership (thousand
Slide 24: DOKODEMO Business: Gross Merchandise Sales (GMS)
■ DOKODEMO Business: Gross Merchandise Sales (GMS) Achieved monthly GMS of 100 million yen (Million yen) New customers GMS Repeat customer GMS Ratio of repeat customers 400 70.0% 64.8% 56.2% 350 60.0% 51.0% 300 50.0% 250 40.0% 200 36.6% 30.0% 150 20.0% 100 10.0% 50 0 0.0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
Slide 25: Proportion of Deliveries by Country Based on GMS
■ DOKODEMO Business: Proportion of Deliveries by Country Based on GMS Proportion of deliveries by country based on the GMS ratio is widely distributed centering on Asia Canada China 4.0% Proportion of deliveries by country 2.6％ South Korea 2.7% US Latin America Hong Kong Middle East 11.1% Europe 1 .
Slide 26: 4. Future Development
4. Future Development 25 Copyright 2020 VEGA corporation. All Rights Reserved.
Slide 27: Future Development (1) Full-fledged D2C
■ Future Development < (1) Full-fledged D2C> Developing a full-fledged direct-to-consumer (D2C) business model leveraging distinctive attributes of “comprehensive e-commerce encompassing manufacturing and retail” Marketing strengths Merchandise strengths SNS & SEO High quality at low prices Product
Slide 28: Future Development (2) Products
■ Future Development < (2) Products> Rolling out new products and improving existing products New products Existing products Cutting costs while providing new value 27 Copyright 2020 VEGA corporation. All Rights Reserved.
Slide 29: Future Development (3) Services
■ Future Development < (3) Services> Meticulously offering services from a customer perspective Websites designed Extensive delivery Improved customer for convenient options support shopping • Sufficient details • Meeting gift-giving • Time zone specified posted online demand delivery • User-friendl
Slide 30: Future Development (4) LOWYA Business
■ Future Development < (4) LOWYA Business> Low recognition High recognition Solidifying footing toward improving profit Brand recognition and scale expansion Establishment of the Penetration of the brand brand Building up fans 100.0 billion yen Flagship store ・ Marketplace Investment stores Investme
Slide 31: 5. Financial Results Forecast
5. Financial Results Forecast 30 Copyright 2020 VEGA corporation. All Rights Reserved.
Slide 32: Financial Results Forecast for the Fiscal Year Ending March 31, 2021
■ Financial Results Forecast for the Fiscal Year Ending March 31, 2021 Focusing on further enhancing the LOWYA flagship store and increasing brand recognition, looking toward development of a full-fledged D2C business model Fiscal year ended Fiscal year ending March 31, 2020 March 31, 2021 Change (R
Slide 33: 6. Appendix
6. Appendix 32 Copyright 2020 VEGA corporation. All Rights Reserved.
Slide 34: LOWYA Business: Positioning
■ Appendix LOWYA Business: Positioning Establishing the fast interior category in the “trendy & low price” space of the furniture and interior products market High price High-class High-class overseas antique furniture furniture High-quality standard Traditional furniture Select fashionable furnitur
Slide 35: LOWYA Business: Service Vision
■ Appendix LOWYA Business: Service Vision As a provider of “fast interior,” Offer “memorable experiences” that go beyond value expected by customers Fulfill satisfaction and inspiration by creating design that reflects a variety of tastes and trends. 34 Copyright 2020 VEGA corporation. All Rights Re
Slide 36: Business Model Characteristics
■ Appendix Business Model Characteristics D2C business model conducting the entire procedure inhouse (Direct to Consumer) Product Online Marketing Import Warehouse (Attracting customers） Delivery CS Development sales Customers Views Designing, buying Manufacturing by Style coordination Order managem
Slide 37: LOWYA Business, Customer Data
■ Appendix LOWYA Business, Customer Data (Male vs. Female, Area Distribution, and Generation Distribution) Showing higher ratio of female in their 30’s, mainly in the Tokyo metropolitan area (April 2019 to March 2020) Ratio of male Area Age vs. female distribution distribution ■ Kanto 38.0 % ■ 29 an
Slide 38: Information on Number of Employees at Fiscal Year-end
■ Appendix Information on Number of Employees at Fiscal Year-end (As of March 31, 2020) Breakdown by Ratio of male Age distribution vs. female occupation ■ IT & engineering 16.9 % ■ 29 and younger 29.2 % Male 55.7 % Website designer 15.5 % ■ 30 to 69 52.5 % ■ General employee 67.6 % ■ Female 44.3 %
Slide 39: Views and forecasts in this document were prepared based on the judgment of the
Views and forecasts in this document were prepared based on the judgment of the Company at the time of preparation. These statements are based on current expectations, forecasts, and assumptions that are subject to risks, and contain uncertainties that could cause actual outcomes to differ materiall