Village Vanguard Co., Ltd. · TSE:2769
Village Vanguard — Q1 FY05/11 Earnings Presentation
34 slides from Village Vanguard's earnings presentation, September 2010
Slide 1: Q1 FY05/11 Results Presentation
Q1 FY05/11 Results l Presentation i
Slide 2: Note
Note: Any current plans, forecasts, strategy projections, expressions of confidence and other statements made byy us in these materials are premised on the information that was available at the moment of the initial publication and on models that depend on uncertain factors that could impact future
Slide 3: P&L (Consolidated)
P&L (Consolidated) Income Statement FY05/09 FY05/10 FY05/11 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Est Q3 Est Q4 Est Sales 7,343 7,462 9,739 8,682 8,630 8,273 10,290 9,456 9,359 8,870 11,006 10,175 SG&A 2,270 2,723 2,798 2,831 2,799 2,879 3,069 3,117 3,120 3,394 3,487 3,570 Labor 995 1,094 1,15
Slide 4: BS (Consolidated)
BS (Consolidated) Balance Sheet FY05/09 FY05/10 FY05/11 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Est Q3 Est Q4 Est Cash & Deposit 2,750 2,387 3,011 3,078 2,685 2,957 3,503 4,037 3,045 3,570 3,163 3,589 I Inventories t i 11 340 11,340 13 711 13,711 13 881 13,881 14 131 14,131 15 003 15,003 15 928
Slide 5: CF (Consolidated)
CF (Consolidated) Cash Flow Statement FY05/09 FY05/10 FY05/11 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Est Q3 Est Q4 Est Operating Cash Flow -419 -533 -1,758 -735 -292 -146 298 1,647 -730 -608 -1,268 220 Change in Inventories -412 -2,783 -2,953 -3,203 -872 -1,796 -1,183 -1,335 -644 -1,663 -1,581
Slide 6: Parent Company Village Vanguard Corporation
Parent Company Village Vanguard Corporation © Village Vanguard corporation, All rights reserved. P.6
Slide 7: What We Do
What We Do ■Village Vanguard ■Diner Burger shop modeled after an American diner. ■QK ■new style 「Exciting book store for kids」 ■Online For 30 year-olds year olds with unique tastes. Book accessories Book, accessories, CDs – 4,800 4 800 items. items Not only toys. ‘Kids Entertainment’ for kids. © Vil
Slide 8: Examples of Our Merchandising Approach (1)
Examples of Our Merchandising Approach (1) We offer merchandise by creating unique retail space aimed at entertaining the customer Toy digital camera “mini digital camera” Camera-shaped and a USB memory shoulder bag stick Camera-shaped h d mirror hand Photo albums Scrap books Toy camera Masking tape
Slide 9: Examples of Our Merchandising Approach (2)
Examples of Our Merchandising Approach (2) © Village Vanguard corporation, All rights reserved. P.9
Slide 10: Examples of Our Merchandising Approach (3)
Examples of Our Merchandising Approach (3) © Village Vanguard corporation, All rights reserved. P.10
Slide 11: How We Sell?
How We Sell? We delegate both purchasing and sales decisions to the store level Marketing M k ti -Pursue customer needs in each store Store manager has Purchasing the absolute discretion -Reflect customer needs directly -Unique challenge to discover new needs Proposition -POP, zone creations, and di
Slide 12: Hiring Strategy
Hiring Strategy Fullll Time Customer Temp Staff Employee We hire people who really understand what we do Even temporary staff are allowed to make purchasing decisions g that spans years Real On-the-Job training © Village Vanguard corporation, All rights reserved. P.12
Slide 13: Store Openings (Parent) Nationwide
Store Openings (Parent) Nationwide 335 Figures: Directly Managed, (Franchise Stores) Tohoku The breakdown of DM stores Hokkaido DM 21 DM 311 does not include format conversions DM 15 FC 2 Aomori VV 268 5 new style 25 Hokkaido Akita Iwate QK 8 17（2） 4 5 Diner 10 Yamagata Miyagi ＦＣ 24 Hokuriku 5 Niiga
Slide 14: Parent Income Statement
Parent Income Statement Income Statement FY05/09 FY05/10 FY05/11 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Est. Sales 7,096 7,144 9,438 8,397 8,271 7,827 9,888 9,008 8,783 8,243 10,464 9,637 Gross Profit 2,821 2,880 3,739 3,506 3,351 3,130 3,994 3,582 3,500 3,317 4,088 3,866 SG&A 2,092 2,521
Slide 15: Comparable Store Sales
Comparable Store Sales 2.0% 0.5% 0.6% 0.0% -0.5% -1.0% -2.0% -2.7% -4.0% -3.2% -3.4% -4.0% -3.9% -4.2% -4.7% -6.0% -6.1% -6.3% -7.0% 7 0% -8.0% -7.6% Comparable-Store (FY05/10) -10.0% Comparable-Store (FY05/11) -9.8% -12.0% 12.0% Oct-09 Dec-09 Jun-09 Jun-10 Aug-09 Aug-10 Feb-10 Apr-10 © Village Vang
Slide 16: Comparable Store Sales (by Format)
Comparable Store Sales (by Format) Sales by Format FY05/09 FY05/10 FY05/11 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Total 6,442 12,483 20,268 27,134 6,734 13,353 22,497 30,695 8,333 Comp Stores YoY 3.9% 2.5% 1.5% 0.2% -5.7% -6.5% -5.6% -4.9% -0.4% Village Vanguard 5,964 11,493 18,538 24,787
Slide 17: Category Sales
Category Sales Sales by Category FY05/09 FY05/10 FY05/11 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 SPICE (Parent) 5,109 5,243 7,102 6,310 6,193 5,926 7,785 6,904 6,713 Books (Parent) 1 038 1,038 1 041 1,041 1 171 1,171 1 087 1,087 1 045 1,045 997 1 147 1,147 1 117 1,117 1 074 1,074 NM (Paren
Slide 18: Store Age Sales YoY
Store Age Sales YoY Year In Operation 6th and Older 5th 4th 3rd 2nd 1st (Directly Managed Stores) Number of Stores 124 35 31 31 62 28 YoY Sales (%) -2.6% -1.4% 1.3% -0.1% 7.6% - *excluding online and closed stores © Village Vanguard corporation, All rights reserved. P.18
Slide 19: OP Analysis
OP Analysis （Million Yen） Decline in OP from Comps 12 million yen Operating profit from new stores 900 Main reasons: (<13 months in operation) 86 million yen Decline in non-store GP Lower profitability of Comps 5.5 million yen 39 million yen Decline due to store closures GP Impact from Other Sales (
Slide 20: Store Openings (Incl. Titicaca Subsidiary)
Store Openings (Incl. Titicaca Subsidiary) New Openings & Closures FY05/09Act FY05/10Act FY05/11Est FY05/11Est FY05/11Est Full-Year Full-Year 1H 2H Full-Year Openings Village Vanguard 42 30 17 16 33 new style 8 1 2 0 2 QK 5 0 0 0 0 Diner 4 1 0 0 0 FC 0 2 0 0 0 Titicaca 12 16 5 4 8 Total New Openings
Slide 21: Theme 1: Dedicated Area Managers
Theme 1 Sales Improvement from the Introduction of Dedicated Area Managers Dedicated area managers were introduced in March Comp. store C t sales l exceeded d d 2010. 100% in July 2010 after 17 Dedicated area managers introduced in March 2010 months. ※ Playing managers were in charge before March 20
Slide 22: Theme 2: Splitting the Internal Sourcing Team
Theme 2 Expanding merchandise variation by splitting the internal sourcing team into two competing units Although new products were added from two …There hasn’t been an improvement in store sales yet. teams competing to obtain new suppliers… ■Internally sourced merchandise share ■Proportion of new p
Slide 23: Theme 3: Impact of Organizational Changes
Theme 3 Impact of organizational changes (Themes 1 & 2) in FY03/11 Costs are included in FY03/11 budget g but anyy positive p effects are not Theme 1 Theme 2 Dedicated area managers Two HQ sourcing teams Impact to FY03/11 Cost increase of 450 million yen Cost increase of 150 million yen (included in
Slide 24: Inventory Control
Theme 4 Inventory Control FY05/09 FY05/09 FY05/09 FY05/09 FY05/10 FY05/10 FY05/10 FY05/10 FY05/11 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Ｑ1 （Million Yen） Cash Flows From Operations -393 -565 -1,694 -669 -197 -173 380 1,756 -718 ■Net Income Before Tax 744 1,116 2,276 3,149 821 1,320 2,498 3,256 502 ■Net Increase (D
Slide 25: Titicaca
© Village Vanguard corporation, All rights reserved. P.25
Slide 26: Outside Titicaca Stores
Outside Titicaca Stores LaLaport Shin Misato Shibuya store Lake Town store store (Saitama) (Tokyo) (Saitama) Early days Now Started as a folk art shop shop, Warm and natural store Image of a Mexican resort with its signs and store interior, offsetting colorful hotel. Exciting store that fixtures han
Slide 27: Inside Titicaca Stores
Inside Titicaca Stores Apparel Accessories Silver Accessories © Village Vanguard corporation, All rights reserved. P.27
Slide 28: Titicaca – Results: Income Statement
Titicaca – Results 1. Income Statement Titi Titicaca FY05/09 FY05/10 FY05/11 Income Statement (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Est. Q3 Est. Q4 Est. Sales 251 322 306 299 361 474 416 467 579 594 519 529 Operating Profit 10 26 7 -7 23 55 -10 -2 66 39 8 -7 Recurring Profit 8 21 5 -9 20 50 -1
Slide 29: Titicaca – Results
Titicaca – Results 1) Sales 9.3% above budget(+49 million yen vs. budget) Store Actual vs. Amount vs. Breakdown Types Budget Budget Comp. +7.6％ +26 million Q1 comparable store sales were +11.5% YoY vs. budget of Stores yen +5.0% YoY. New Stores +14.5％ +22 million Strong sales in new stores. The two
Slide 30: Titicaca – Results: Comparable Store Sales
Titicaca – Results 2. Comparable store sales : +11.5% YoY in Q1 Comparable store sales by product category (directly managed stores) 130% Cl hi Clothing 衣料部門 125.0% Reasons for growth in accessories sales: 125% Goods 雑貨部門 1. Focused on fashion goods; due to strong seasonal Comp. Sales YoY 既存店昨対 dema
Slide 31: Company Profile: Village Vanguard (Hong Kong) Limited
Company Profile Village g Vanguard g (Hong ( g Kong) g) Limited （Consolidated from FY05/11） © Village Vanguard corporation, All rights reserved. P.31
Slide 32: Inside VVHK stores
Inside VVHK stores © Village Vanguard corporation, All rights reserved. P.32
Slide 33: Performance Report (VVHK)
Performance Report （VVHK） ■Existing Stores 3 Directly Managed Stores 2 Kowloon FY05/11 Plans and Results 3 (Million Yen) Q1 (Plan） Q1（ Results） Q2（ Plan） Q3（ Plan） Q4（ Plan） Sales 51 36 102 162 209 Gross Profit 23 15 46 73 94 Operating Profit -11 -10 -17 -19 -26 Recurring Profit -11 -10 -17 -19 -26
Slide 34: Issues and Measures (VVHK): Towards positive operating profit
Issues and Measures （VVHK） Towards positive operating profit Improving in-store merchandising Failing to create a retail experience that truly reflects VV’s unique model. =>On-the-job >On the job training in Japan to learn the VV way of selling. selling Discovering customer needs and reflecting them