Village Vanguard Co., Ltd. · TSE:2769
Village Vanguard — FY05/12 Earnings Presentation
43 slides from Village Vanguard's earnings presentation, 2012
Slide 1: FY05/12 Results Presentation
FY05/12 Results Presentation
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
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 Est. Q2 Est. Q3 Est. Q4 Est. Sales 9,359 9,125 11,397 9,926 10,158 10,005 12,279 10,500 10,068 9,947 12,174 10,593 SG&A 3,120 3,265 3,401 3,429 3,460 3,593 3,806 3,826 3,773 3,934 4,097
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 Est. Q2 Est. Q3 Est. Q4 Est. Cash & Deposit 3,045 3,378 3,582 3,972 2,586 2,865 2,773 3,570 3,414 3,120 3,294 3,076 Inventories 16,182 17,044 16,726 16,950 17,827 19,175 19,007 18,669 19,119 19,922 19,29
Slide 5: CF (Consolidated)
CF (Consolidated) Cash Flow Statement FY05/11 FY05/12 FY05/13 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Est. Q2 Est. Q3 Est. Q4 Est. Operating Cash Flow -730 -347 -111 1,143 -1,053 -773 -876 558 -516 -84 -634 902 Change in Inventories -644 -1,506 -1,191 -1,415 -881 -2,228 -2,056 -1,720 -449 -1,252 -6
Slide 6: Parent Company Village Vanguard Corporation
Parent Company Village Vanguard Corporation © Village Vanguard corporation, All rights reserved. P.5
Slide 7: What We Do
What We Do Standalone store Mall-located Store ■Village Vanguard ■Diner Our concept is “A bookstore where you can play.” By bringing together various An old-school hamburger shop products such as books, variety goods, and CDs, our stores have a unique feel. modeled after an American diner. ■new styl
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 bag Very popular among For example, merc
Slide 9: Examples of Our Merchandising Approach (2)
Examples of Our Merchandising Approach (2) © Village Vanguard corporation, All rights reserved. P.8
Slide 10: Examples of Our Merchandising Approach (3)
Examples of Our Merchandising Approach (3) © Village Vanguard corporation, All rights reserved. P.9
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 Purchasing absolute discretion ■Reflect customer needs directly ■Unique challenge to discover new needs Head Office Proposition Authority ■POP, zone cre
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
Slide 13: Sourcing Teams
Sourcing Teams Role Functions The teams assumes the role of in-house wholesaling teams, proposing products to (1) Reducing costs by taking advantage of economies of scale stores through marketing activities. (2) Creating competition to promote a "product refining" effect Manufacturer and External Eq
Slide 14: Store Network (Parent)
Store Network (Parent) Store data as of end-May 2012 390 stores nationwide * Figures in parentheses indicate the number of FC stores * Figures in red show there were changes in the number from Q3. Tohoku 372 directly managed (DM) DM 22 Hokkaido 322 VV format DM 16 Aomori 37 new style format FC 2 5 B
Slide 15: VV – Results (Parent)
VV – Results (Parent) © Village Vanguard corporation, All rights reserved. P.14
Slide 16: Parent Income Statement
Parent Income Statement Q3 and Q4 FY05/11 Versus Plan figures reflect performance vs. revised budgets. Parent Income Statement FY05/11 FY05/12 FY05/13 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Est. Q2 Est. Q3 Est. Q4 Est. Sales 8,783 8,402 10,776 9,315 9,306 8,863 11,254 9,509 8,822 8,223 10,659 9,08
Slide 17: Sales by Category
Sales by Category Sales by Category FY05/10 FY05/11 FY05/12 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 SPICE (Parent) 6,193 5,926 7,785 6,904 6,780 6,461 8,609 7,177 7,361 6,999 9,216 7,684 (Internal Sourcing Team) 1,578 1,565 2,297 1,904 1,752 1,770 2,713 2,088 2,217 2,214 3,116 2,310 (Other
Slide 18: OP Analysis
OP Analysis (Million Yen) 3,650 Increase in OP from new stores (less than 13 months since opening) 527 million yen -206 3,150 -300 527 -115 -374 Decrease in OP due to 2,650 non-operational store costs Decrease in OP from -206 million yen closures of special stores Main reasons: -115 million yen High
Slide 19: Store Openings
Store Openings FY05/10 FY05/11 FY05/12 FY05/13 Plan Actual Actual Plan and Actual Q1 Q2 Q3 Q4 FY FY FY Plan Actual Plan Openings 34 46 25 38 7 8 4 6 25 Village Vanguard 30 39 21 30 6 5 3 6 20 new style 1 7 4 7 1 3 1 0 5 QK 0 0 0 1 0 0 0 0 0 Diner 1 0 0 0 0 0 0 0 0 FC 2 0 0 0 0 0 0 0 0 Closures 12 15
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, “Strong sellers occupying appealing leading to 100.8% YoY sales at spots in the sales rankings” existing stores for cumulative FY05/11 Over-focusing on strong sel
Slide 21: Theme 1 Factors behind Sluggish Sales
Theme 1 Factors behind Sluggish Sales Factor 1: Sales floors dominated by existing products ◆Past ◆Now ●Always discovering and ●Floor space dominated by offering new products. the same products that were popular in the past. Generated hit products. ●Releasing fewer new products with appealing origin
Slide 22: Theme 2 Business Turnaround Scenario
Theme 2 Business Turnaround Scenario Reform without clinging to past experiences Existing Business Reforms New Investment-based Reforms 1. Sharing tacit 1. Develop new knowledge business models 2. Introduction of POS 2. M&A system 3. Overseas business Continue practical OJT and conventional marketin
Slide 23: Inventory Control
Theme 3 Inventory Control FY05/10 FY05/11 FY05/11 FY05/11 FY05/11 FY05/12 FY05/12 FY05/12 FY05/12 (Million Yen) Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Cash Flow from Operations 1,756 -718 -523 -214 1,042 -950 -1,061 -1,132 102 ■Net Income before Tax 3,256 502 1,015 2,371 3,065 672 1,098 2,390 2,696 ■Net Change
Slide 24: Company Profile: Titicaca
Company Profile: Titicaca © Village Vanguard corporation, All rights reserved. P.23
Slide 25: 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
Slide 26: Outside Titicaca Stores
Outside Titicaca Stores Shibuya Lake Town Yume Town store store Beppu store (Shibuya, Tokyo) (Koshigara , 別府店 (Beppu, Oita) Saitama) Early days Now Started as a folk art shop, Image of a Mexican resort with signs and store fixtures Warm, natural store interior, hotel. An exciting store that hand-mad
Slide 27: Outside of New Stores
Outside of New Stores AEON MALL Yachiyo Ito Yokado Kasai AEON MALL Fukutsu Midorigaoka Opened Mar 23, 2012 Opened Apr 21, 2012 Opened Mar 10, 2012 New Store Design Concept “Cheer customers up with colorful stores full of fun!” These new stores were designed in the motif of Mexican resort hotels. Woo
Slide 28: Inside Titicaca Store
Inside Titicaca Store © Village Vanguard corporation, All rights reserved. P.27
Slide 29: Titicaca Store Network
Titicaca Store Network Store data as of end-May 2012 79 (82) stores nationwide Figures in red show there were changes in the number from Q3. Tohoku 77 (80) Directly Managed (DM) DM 5 Hokkaido 2 (2) FC Stores DM 1 Figures in parentheses as of end-May 2012 Hokkaido Akita 1 Iwate 1 1 Yamagata Miyagi Ho
Slide 30: © Village Vanguard corporation, All rights reserved. P.29
© Village Vanguard corporation, All rights reserved. P.29
Slide 31: Titicaca - Results
Titicaca - Results Titicaca Income Statement FY03/11 FY03/12 FY03/13 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Est. Q2 Est. Q3 Est. Q4 Est. Sales 579 720 630 626 826 1,148 977 1,017 1,208 1,695 1,435 1,462 Gross Profit 390 473 412 397 554 797 654 672 799 1,039 945 911 Operating Profit 66 114 53 3 108
Slide 32: Titicaca - Results
Titicaca - Results Sales vs. Budget Achieved +4.2% vs. budget (+160 million yen) * All figures are vs. full-year forecast Existing stores: -0.2% (-0.8 million yen) Wholesale and FC sales: +8.6% (+15 million yen) New stores: +12.4% (+224 million yen) SG&A vs. Budget +0.7% vs. budget (+14 million yen)
Slide 33: Titicaca - Results
Titicaca - Results Comparable Store Sales Cumulative through Q4 +13.6% Higher monthly sales YoY 150% for 49 consecutive months 140% (Feb 2008 – Feb 2011) 130% 123.8% 120.6% 118.6% 121.1% 120% 115.4% 113.6% 112.8% 111.7% 110% 108.8% 111.0% 106.2% 105.1% 104.6% 100% Existing stores on which 104.5% 102
Slide 34: Growth Strategy
Growth Strategy Investment in human resources – increasing manager counts FY03/12 FY03/13 4. Head of Sales HQ Block Manager: 3 Block Manager: 3 Dedicated Area Manager: 2 1. Dedicated Area Manager: 4 Playing Area Manager: 8 2. Playing Area Manager: 9 Sub Manager: 6 3. Sub Manager: 12 Store Manager St
Slide 35: Village Vanguard Webbed Limited
Village Vanguard Webbed Limited © Village Vanguard corporation, All rights reserved. P.34
Slide 36: Results
Results (Thousand Yen) ■ Sales YoY (Order Value Basis) FY05/12 FY05/13 PL (Actual) (Plan) 160.0% Q4 Q1 Q2 Q3 Q4 (Actual) (Plan) (Plan) (Plan) (Plan) Sales 100,292 25,374 56,611 104,177 137,633 140.0% 136.5% Versus Plan 130.6% (%) 51.4 - - - - Operating a store on (Difference) (-94,873) the new site
Slide 37: Overseas Subsidiaries
Overseas Subsidiaries © Village Vanguard corporation, All rights reserved. P.36
Slide 38: Enter Overseas Markets
Overseas Subsidiaries Enter Overseas Markets Village Vanguard Titicaca Japan Japan 390 stores (including franchises) 82 stores (including franchises) * As of end-May 2012 * As of end of May 2012 Increase Store Counts in Japan Enter overseas markets and increase store counts overseas ●September 2009
Slide 39: 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
Slide 40: Inside Store
Village Vanguard (Hong Kong) Limited Inside Store Store Openings Mega Box store 1 DNA 2 4 Galleria Park Central store store (opened in June 2012) 3 Fortress Hill store © Village Vanguard corporation, All rights reserved. P.39
Slide 41: Village Vanguard (Hong Kong) Limited
Village Vanguard (Hong Kong) Limited FY05/12 Results FY05/13 Plan (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Sales 29 52 84 109 31 59 97 131 Comparable Store Sales YoY 120.0% vs. Plan -2 -10 -19 -23 - - - - 113.2%111.6% 110.8% YoY Change -6 -6 -6 -8 +1 +7 +12 +22 110.0% 106.3% 105.0% Gross Profit 13 19 3
Slide 42: 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
Slide 43: Company Overview
Village Vanguard (Taiwan) Ltd. Company Overview Company name: Village Vanguard (Taiwan) Limited Shareholders: Village Vanguard Co., Ltd. (100%) Store manager Mr. Tateyama Business: Retail sales exhibiting a fusion of books, SPICE (variety goods) and new media (CDs, DVDs, others) based on the i