Village Vanguard Co., Ltd. · TSE:2769

Village Vanguard — Q2 FY05/13 Earnings Presentation

44 slides from Village Vanguard's earnings presentation, December 2012

  1. Slide 1: Q2 FY05/13 Results Presentation

    Q2 FY05/13 Results Presentation

  2. Slide 2: Note

    Note: Any current plans, forecasts, strategy projections, expressions of confidence and other statements made by 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 e

  3. Slide 3: Income Statement (Consolidated)

    Income Statement (Consolidated) Income Statement FY05/11 FY05/12 FY05/13 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Act. Q2 Act. Q3 Est. Q4 Est. Sales 9,359 9,125 11,397 9,926 10,158 10,005 12,279 10,500 10,167 10,232 12,202 10,583 SG&A 3,120 3,265 3,401 3,429 3,460 3,593 3,806 3,826 3,665 3,991 4,062

  4. Slide 4: BS (Consolidated)

    BS (Consolidated) Balance Sheet FY05/11 FY05/12 FY05/13 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Act. Q2 Act. Q3 Est. Q4 Est. Cash & Deposit 3,045 3,378 3,582 3,972 2,586 2,865 2,773 3,570 2,721 4,009 3,598 3,519 Inventories 16,182 17,044 16,726 16,950 17,827 19,175 19,007 18,669 19,439 21,271 20,54

  5. Slide 5: CF (Consolidated)

    CF (Consolidated) （単位：百万円） Cash Flow Statement FY05/11 FY05/12 FY05/13 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Act. Q2 Act. Q3 Est. Q4 Est. Operating Cash Flow -730 -347 -111 1,143 -1,053 -773 -876 558 -520 -616 -651 109 Change in Inventories -644 -1,506 -1,191 -1,415 -881 -2,228 -2,056 -1,720 -770

  6. Slide 6: Parent Company Village Vanguard Corporation

    Parent Company Village Vanguard Corporation © Village Vanguard corporation, All rights reserved. P. 5

  7. Slide 7: What We Do

    What We Do Standalone Store Mall-located Store ■Village Vanguard ■Diner Our concept is “Exciting Book Store”. By bringing together various products An old-school hamburger shop such as books, variety goods, and CDs, our stores have a unique feel. modeled after an American diner. ■Other Formats ■new

  8. Slide 8: Examples of Our Merchandising Approach (1)

    Examples of Our Merchandising Approach (1) Merchandise themed around “365-days of Camera living” We offer merchandise by creating a unique retail space aimed at entertaining the customer Merchandise for Camera Lovers Toy Camera “HOLGA” ・Camera-shaped Shoulder Very popular among For example, merchand

  9. Slide 9: Examples of Our Merchandising Approach (2)

    Examples of Our Merchandising Approach (2) © Village Vanguard corporation, All rights reserved. P. 8

  10. Slide 10: Examples of Our Merchandising Approach (3)

    Examples of Our Merchandising Approach (3) © Village Vanguard corporation, All rights reserved. P. 9

  11. Slide 11: How Do We Sell?

    How Do We Sell? We delegate both purchasing and sales decisions to the store level Marketing ■Pursue customer needs in each store Store Manager has absolute discretion Purchasing ■Reflect customer needs directly ■Unique challenge to discover new needs Head Office Proposition Authority ■POP, zone cre

  12. Slide 12: Hiring Strategy

    Hiring Strategy Full Time Customer Temp Staff Employee ■ Hiring people who really understand the company ■ Even temporary staff are allowed to make purchasing decisions ■ Long-term practical on-the-job training © Village Vanguard corporation, All rights reserved. P. 11

  13. Slide 13: Sourcing Team

    Sourcing Team Role Two Functions The team assumes the role of in-house wholesaling teams, proposing products (1) Reducing costs by taking (2) Creating competition to promote to stores through marketing activities. advantage of economies of scale a “product refining” effect Manufacturers and External

  14. Slide 14: Store Network (Parent)

    Store Network (Parent) Store data as of end-November 2012 * Figures in parentheses indicate the number of FC stores 395 stores nationwide * Figures in red show there were changes in the number from Q1. Tohoku 380 directly managed (DM) DM 22 Hokkaido 328 VV format DM 16 Aomori 39 new style format FC

  15. Slide 15: VV – Results (Parent)

    VV – Results (Parent) © Village Vanguard corporation, All rights reserved. P. 14

  16. Slide 16: Parent Income Statement

    Parent Income Statement Parent Income Statement FY05/11 FY05/12 FY05/13 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Est. Q4 Est. Sales 8,783 8,402 10,776 9,315 9,306 8,863 11,254 9,509 8,949 8,541 10,700 9,096 Gross Profit 3,500 3,403 4,354 3,739 3,738 3,432 4,501 3,690 3,464 3,313 4,126 3,502 SG

  17. Slide 17: Sales by Category

    Sales by Category Sales by Category FY05/11 FY05/12 FY05/13 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 SPICE (Parent) 6,780 6,461 8,609 7,177 7,361 6,999 9,216 7,684 7,309 6,866 (Internal Sourcing Team) 1,752 1,770 2,713 2,088 2,217 2,214 3,116 2,310 2,092 2,029 (Other) 5,027 4,691 5,896 5,09

  18. Slide 18: OP Analysis

    OP Analysis (Million Yen) ▲255 27 ▲59 754 67 476 © Village Vanguard corporation, All rights reserved. P. 17

  19. Slide 19: Store Openings

    Store Openings FY05/10 FY05/11 FY05/12 FY05/13 Plan and Actual Actual Actual Actual Q1 Q2 Q3 Q4 FY Init. Init. Init. Init. Init. FY FY FY Act. Act. Est. Est. Est. Plan Plan Plan Plan Plan Openings 34 46 38 7 8 8 4 4 1 6 11 25 24 Village Vanguard 30 39 30 6 6 5 4 3 0 6 9 20 19 new style 1 7 7 1 2 3 0

  20. Slide 20: Year on Year Retail Sales at Existing Stores

    Year on Year Retail Sales at Existing Stores YoY sales at existing stores The dedicated Area Manager system introduced in March 2010, leading to “Strong seller occupying appealing 100.8% YoY sales at existing stores spots in the sales rankings” for cumulative FY05/11 (until March Over-focusing on st

  21. Slide 21: Recovering Sales

    Theme 1 Recovering Sales Village Vanguard’s Vision Village Vanguard Now Lack of change in layout and lineup Unearth Customer Needs ●Layout looks the same as few years back Disseminate Information ●Fewer new, unique merchandise In 2005 In 2012 Improve Initiative 2: Actively introduce new Initiative 1

  22. Slide 22: Inventory Control

    Theme 2 Inventory Control (Million Yen) FY05/11 FY05/11 FY05/11 FY05/12 FY05/12 FY05/12 FY05/12 FY05/13 FY05/13 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Cash Flow from Operations -523 -214 1,042 -950 -1,061 -1,132 102 -158 -685 ■Net Income before Tax 1,015 2,371 3,065 672 1,098 2,390 2,696 522 707 ■Net Change in

  23. Slide 23: © Village Vanguard corporation, All rights reserved. P. 22

    © Village Vanguard corporation, All rights reserved. P. 22

  24. Slide 24: Company Overview (Titicaca)

    Company Overview (Titicaca)  Company name: Titicaca Co.  Shareholder composition: Village Vanguard Co., Ltd. (100%)  Business: Import and sales of ethnic fashions and daily goods  Headquarters: 2-2-3 Shin-Yokohama, Kohoku-ku, Yokohama, Kanagawa Prefecture  Representative: Hitoshi Kinami, Managi

  25. Slide 25: Titicaca Store Network

    Titicaca Store Network Store data as of end-November 2012 Figures in red show there were changes in the number from end-August 2012 94 stores nationwide 92 Directly Managed (DM) Hokkaido 2 FC Stores DM 3 Tohoku Hokkaido 3 DM 5 Akita 1 Iwate 1 Hokuriku Yamagata Miyagi DM 6 1 2 ETHIC Kyoto Niigata Chu

  26. Slide 26: Outside of Titicaca Stores

    Outside of Titicaca Stores Our new stores opened during this Q2 AEON Mall Nagoya Dome Mae Opened Sept 21 AEON Mall Miyakonojo Ekimae AEON Mall Kushiro Showa Opened Oct 12 Opened Nov 1 © Village Vanguard corporation, All rights reserved. P. 25

  27. Slide 27: Inside Titicaca Stores

    Inside Titicaca Stores © Village Vanguard corporation, All rights reserved. P. 26

  28. Slide 28: Titicaca ETHIC opened in Omotesando and Kyoto Teramachi

    Branding Strategy Titicaca ETHIC opened in Omotesando and Kyoto Teramachi to spread Titicaca store concept Shop Concept Bridge producers and consumers, and contribute to society by promoting ethical consumption Spread Info •Good location as info hub •Equipped with press room (Omotesando) •Free space

  29. Slide 29: © Village Vanguard corporation, All rights reserved. P. 28

    © Village Vanguard corporation, All rights reserved. P. 28

  30. Slide 30: Titicaca - Results

    Titicaca - Results Titicaca Income Statement FY03/11 FY03/12 FY03/13 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Est. Q4 Est. Sales 579 720 630 626 826 1,148 977 1,017 1,207 1,677 1,420 1,439 Gross Profit 390 473 412 397 554 797 654 672 807 1,135 942 896 Operating Profit 66 114 53 3 108 275 128 9

  31. Slide 31: Titicaca - Results SG&A vs. Budget OP YoY

    Titicaca - Results SG&A vs. Budget OP YoY -1.3% vs. budget (-18 million yen) •OPM at 18.5% vs. 19.4% in Q2 FY03/12 •Ratio of corporate overhead to sales at 11.1% vs. 11.4% in Q2 FY03/12 Slower hiring Increase in OP at new stores: -22 million yen +174 million yen; decrease in OP from closures: -64 mi

  32. Slide 32: Titicaca - Results Comparable Store Sales Store Openings

    Titicaca - Results Comparable Store Sales +12.7％ vs. Q2 FY03/12 Higher monthly sales Higher monthly sales YoY YoY for 49 consecutive for 21 consecutive months months after the earthquake (Feb 2008-Feb 2011) Existing stores on which the earthquake had no impact (YoY) +4.1% * Different color for each

  33. Slide 33: Growth Strategy

    Growth Strategy Hiring Strategy Allocate personnel costs in FY03/13 in line with Titicaca growth Strengthen hiring and staff training toward further growth © Village Vanguard corporation, All rights reserved. P. 32

  34. Slide 34: Company Overview (Village Vanguard Webbed)

    Company Overview (Village Vanguard Webbed)  Company name: Village Vanguard Webbed Corporation  Shareholder composition: Village Vanguard Co., Ltd. (100%) Online shopping site  Business: e-commerce of books, goods, CDs, DVDs, etc.  Headquarters: 1-901 Kamiyashiro, Meito-ku, Nagoya, Aichi Prefectu

  35. Slide 35: Village Vanguard Webbed - Results

    Village Vanguard Webbed - Results (Thousand Yen) ■Sales YoY (Order Value Basis) FY05/13 (Results and Plan) PL Q1 Q2 Q3 Q4 (Results) (Results) (Plan) (Plan) Sales 24,042 52,954 100,520 133,976 Vs. Plan (%) 94.8% 93.5% - - (Difference) (-1,332) (-3,657) - - GP 5,556 13,609 24,043 32,400 Vs. Plan (%) 1

  36. Slide 36: Overseas Subsidiaries

    Overseas Subsidiaries © Village Vanguard corporation, All rights reserved. P. 35

  37. Slide 37: Overseas Businesses

    Overseas Subsidiaries Overseas Businesses Village Vanguard Titicaca Japan Japan 395 stores (including franchises) 94 stores (including franchises) * As of end-November 2012 Increase Store Counts in Japan * As of end-November 2012 Enter overseas markets and increase store counts overseas ●September 2

  38. Slide 38: Village Vanguard (Hong Kong) Limited Company Overview

    Village Vanguard (Hong Kong) Limited Company overview  Company Name: Village Vanguard (Hong Kong) Limited  Shareholders: Village Vanguard Co., Ltd. (80%) Era-Bee Limited (20%) (Development of Japanese language education and culture-related businesses)  Business: Retail sales exhibiting a fusion o

  39. Slide 39: Village Vanguard (Hong Kong) Limited - Results

    Village Vanguard (Hong Kong) Limited - Results PL Inside Store FY05/13 (Results and Plan) (Million Yen) Q1 Q2 Q3 Q4 Sales 27 69 106 141 Vs. Plan -4 +9 - - YoY Change -2 +17 +22 +32 GP 11 4 19 33 Vs. Plan -1 -18 - - YoY Change -2 -14 -13 -3 OP -4 -35 -38 -41 Vs. Plan +0 -24 - - YoY Change +0 -12 -10

  40. Slide 40: TITICACA HONG KONG LIMITED Company Overview

    TITICACA HONG KONG LIMITED Company Overview  Company name: Titicaca Hong Kong Limited  Shareholders: Village Vanguard Co., Ltd. (100%)  Business: Import and sales of ethnic fashions and daily goods  Headquarters: Flat 1606, 16/F., Nathan Center, 580 Nathan Road, Mongkok, Kowloon  Representative

  41. Slide 41: TITICACA HONG KONG LIMITED Inside Store Results

    TITICACA HONG KONG LIMITED Results Inside Store Silvercord store in Tsim sha FY05/13 (Results and Plan) tsui, Hong Kong (Thousand Yen) Q1 Q2 Q3 Q4 (Results) (Results) (Plan) (Plan) Net Sales 3,726 17,216 30,249 42,249 Vs. Plan (%) 186.3% 215.2% - - YoY (%) - - - - GP 1,940 10,263 18,548 26,217 Vs. P

  42. Slide 42: Village Vanguard (Taiwan) Limited Company Overview

    Village Vanguard (Taiwan) Limited Company Overview  Company name: Village Vanguard (Taiwan) Limited  Shareholders: Village Vanguard Co., Ltd. (100%)  Business: Retail sales exhibiting a fusion of books, SPICE (variety goods) and new media (CDs, DVDs, others) based on the idea of a “bookstore wher

  43. Slide 43: Village Vanguard (Taiwan) Limited Results Inside Store

    Village Vanguard (Taiwan) Limited Results Inside Store FY05/13 (Results and Plan) (Thousand Yen) Q1 Q2 Q3 Q4 (Results) (Results) (Plan) (Plan) Sales 2,474 8,044 19,544 30,644 Vs. Plan -1,025 -235 - - GP 878 -241 2,419 7,081 Vs. Plan -591 -677 - - OP -10,535 -20,076 -22,715 -25,736 Vs. Plan -682 -5,9

  44. Slide 44: 2D VWAGe VyNGUARD

    2D VWAGe VyNGUARD

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