Jade Group, Inc. · TSE:3558
Jade — Q2 FY2024 Earnings Presentation
37 slides from Jade's earnings presentation, Oct 13, 2023
Slide 1: JADE GROUP FY2024 2Q IR Presentation
JADE GROUP FY2024 2Q IR PRESENTATION 2023.10.13
Slide 2: 目 次
目 次 1. Summary 4. Result 2. Our Business ① P&L ① Vision, Mission and Policy (1) GMV ② Seven initiatives for SDGs (2) Sales ③ Initiatives for D&I ④ Business model (3) SG&A (1) “ecosystem” that consists of the 3 businesses (4) Operating profit (2) Sales accumulation model ② B/S (3) Break-even point Mo
Slide 3: 1. Summary
1. SUMMARY • In the second quarter, the Jade Group recorded significant growth compared to last year in both GMV (before offsetting internal transactions) of 14.07 billion yen (+30.9% YoY) and operating income of 0.80 billion yen (+95.8% YoY). • As for the percentage of progress against the fiscal y
Slide 4: 2Q results and plan
2Q results and plan Both GMV and operating income grew substantially. Steady growth against the fiscal year plan 1st Half（Actual） FY24（Plan） GMV （before offsetting internal transactions） + 31% + 23 ～ 33% Operating Income + 96% + 76% 4
Slide 5: Our Business
Our Business 5
Slide 6: Our Business: Vision, Mission and Policy
2. Our Business ①Vision, Mission and Policy VISION MAKE BRANDS BRIGHT POLICY Fast Faith Fair Fun ! 6
Slide 7: Our Business: Seven initiatives for SDGs (1/2)
2. Our Business ②Seven initiatives for SDGs (1/2) ① Think of energy ⚫ Using LED at warehouse ⚫ Implemented “BIGASSFANS” at all floors ⚫ Control air conditioner at 28℃, and heater at 20℃ ② Think of recycle ⚫ Using recycled plastics for palette at the warehouse ⚫ Providing eco-leather (made by scrap l
Slide 8: Our Business: Seven initiatives for SDGs (2/2)
2. Our Business ② Seven initiatives for SDGs (2/2) ⑤ Gives back ⚫ Providing open space for Yachiyo citizens ⚫ Build new bus lane together with Yachiyo city and bus company. Providing a rest area for the drivers ⑥ Equality and diversification ⚫ Fair evaluation system with 50 competencies ⚫ Diversific
Slide 9: Business Overview: D&I Initiatives
2. Business Overview ③ "D&I” Initiatives Although our D&I (Diversity & Inclusion) indexes are currently above average, we will continue to improve our environment to achieve further improvements. Item Current Industry average Target (3 years) Main actions Wage differentials between men and 63.6% - -
Slide 10: Business model: ecosystem of the 3 businesses
2. Our Business ④Business model (1) “ecosystem” that consists of the 3 businesses JADE GROUP has 3 businesses connected complementary and the ecosystem creates our own competitiveness. Sharing inventories: Sell offline inventories at EC Growth driven by the structure Sharing infrastructure: Share lo
Slide 11: Business model: EC MALL Business
EC PF 2. Our Business ④Business model (1) EC MALL Business Brand LOCONDO has own EC mall （LOCONDO, FASHION WALKER, SWS and waja）and stores in other companies’ EC mall such as Rakuten and Yahoo! Promote business expansion by “increase in number of members” through effective web advertising operations
Slide 12: Business model: PLATFORM business
EC PF 2. Our Business ④Business model (2) PLATFORM business Brand Providing various systems and services that enable centralization of inventories and integration of digital information through DX（Digital Transformation） Promoting "ALL-IN-ONE Package" implementing all the services below and bring pe
Slide 13: Business model: BRAND business
EC PF 2. Our Business ④Business model (3) BRAND business Brand There are two major brand businesses, the “brand management business", which is mainly developed as an exclusive agency or as the licencee for overseas brands, and the "D2C (Direct To Consumer) brand development business," which is devel
Slide 14: Business model: sales accumulation model
2. Our Business ④Business model (2) sales accumulation model A model that builds up sales through the cycle below. New buyers → repeat customers → expansion of active user base → enhancement of product lineup → increase in new visitors More visitors from search engine(SEO) Approx. 34% *1 of new cust
Slide 15: Business model: profit structure, break-even point model
2. Our Business ④Business model (3)profit structure – Break-even point Model- A business model in which the operating profit on sales improves once sales exceeds the break- even point. (1) GMV, (2) Marginal profit ratio (= gross margin ratio – variable cost ratio) and (3) Fixed costs are Key Perform
Slide 16: MTB and LTV
MTB and LTV 16
Slide 17: MTB and LTV: Overview of the Mid-term business plan
3. MTB and LTV ①Overview of the Mid-term business plan (MTB) • We took over Reebok Japan business as one of the core brand to JADE GROUP business. We started to manage the Reebok operation from Oct 1st 2022 under the newly established joint-venture company between JADE GROUP (66%) and ITOCHU Corpora
Slide 18: MTB and LTV: EC ratio in the fashion market
3. MTB and LTV ②EC ratio in the fashion market The current EC ratio in the domestic fashion market is about 21%. It is expected to increase to approx. 35% in 2030, where the EC market size will be approx. 3.5 trillion JPY. Fashion Market Fashion EC Market and EC ratio （100MM） （100MM） 160,000 40,000
Slide 19: MTB and LTV: GMV
3. MTB and LTV ③GMV ✓ Get 3% of the market share in the 3.5 trillion JPY market; 100 billion JPY (USD approx. 1bn) ✓ We will increase our GMV to JPY 40 Bn in three years through (a) organic growth by aggressive investment, (b) Reebok business, and (c) additional M&A (EC or D2C brands) GMV : JPY 100
Slide 20: MTB and LTV: GMV by business (unit; JPY 100MM)
3. MTB and LTV ③GMV (unit; JPY 100MM) 【EC】EC (except D2C) 【PF】PF (except MANGO) 350 ① FY 2022 reflected the actual result (before intercompany elimination) 【Brand】RBKJ、MANGO、D2C ② We set gross GMV (before intercompany elimination) as KPI since we could verify that we can maintain 150 16% of marginal
Slide 21: MTB and LTV: GMV growth drivers by business
3. MTB and LTV ③GMV (unit: JPY 100MM) FY22 (actual) FY 30 (estimate) CAGR Key growth drivers • Realizing the organic growth through leveraging our platform service - inventory sharing -, and EC 170 500 + 14％ strengthening the product line, promotion, and UI/UX. • In addition, M&A of brands can drive
Slide 22: MTB and LTV: fixed cost
3. MTB and LTV ④fixed cost The new warehouse will be fully operational from June 2022, and no further expansion is expected for at least five years thereafter. Other costs are planned to increase gradually along with GMV Plan 6Bn 60 Includes; ※breakdown: image [Rent] LOCOPORT III Start renting all f
Slide 23: MTB and LTV: operating profit and aggressive investment
3. MTB and LTV ⑤operating profit and Aggressive investment We will invest into aggressive promotion controlling minimum ROE level at 10% (ROE in FY22 : 23.7%) when demand & supply situation is good. When we think the situation is not good or we need more cash for additional M&A, we will maximize our
Slide 24: RESULTS
RESULTS 24
Slide 25: Result: P&L (unit; JPY 100MM)
4. Result ①P&L (unit; JPY 100MM) GMV increased 30.9% yoy due to the launch of the Reebok business. Operating profit increased 95.8% yoy to 798 million yen due to the start of the Reebok business and cost controls. Item FY22 2Q FY23 2Q YoY Plan Vs Plan ① GMV 10,748 14,069 + 30.9% 30,000 - 32,500 43.3
Slide 26: Result: P&L (1) GMV
4. Result ①P&L (1) GMV（unit; JPY 100） In-house malls struggled due to D2C demand cycle and the effects of a heat wave in the second half of the year. On the other hand, BOEM and others (wholesale and stores) grew significantly, +56% and +1765%, respectively, due to the Reebok effect, resulting in an
Slide 27: Result: P&L (2) Sales
4. Result ①P&L (2)Sales（unit; JPY MM) Revenue increased by 47.0% mainly supported by Reebok business. + 47% 3,423 3,160 2,856 2,762 2,589 3,202 2,218 2,700 2,376 2,598 1,980 2,190 2,201 2,310 2,813 1,883 1,966 1,955 1,476 2,150 1,371 2,300 (Note) In the case of purchased inventory, the selling price
Slide 28: Result: P&L (3) SG&A
4. Result ①P&L (3)SG&A (unit; JPY MM) Although the rent for the new warehouse increased, and fees at RBKJ increased, we could manage the SG&A through controlling costs such as optimization of ads and logistics as well as reduction of fees. Item FY22 2Q % FY23 2Q % YoY Main factors of variation Labor
Slide 29: Result: P&L (4) Operating Profit
4. Result ①P&L (4)Operating Profit (unit; JPY MM) Operating income (2Q) was 260 million yen, + 355.6% comparing to the 2Q last FY. 538 504 485 378 350 319 303 303 260 173 145 100 105 99 87 57 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022 2023 202
Slide 30: Result: YoY comparative analysis of operating profit
4. Result ①P&L (4) YoY comparative analysis of operating profit (Unit: JPY MM) Operating income increased 95.8% to 798 million yen due to increased transaction volume, higher gross profit margin, and variable cost control. △ 211 ＋437 △ 96 △ 46 △ 18 △11 ＋345 798 407 FY22 2Q GMV Gross Profit ratio Ren
Slide 31: Result: B/S (unit; JPY MM)
4. Result ②B/S (unit; JPY MM) Debt-free management, financial soundness with equity ratio at 57%. Current Assets 8,461 Current Liabilities 3,920 Deposits received Cash and cash equivalents 3,540 1,383 for consignment sales Inventories 2,905 short-term loans payable 102 Fixed Assets 2,074 Fixed Liabi
Slide 32: Each business: EC mall number of active users
4. Result ③Each business (1) EC mall : number of active users (unit; K) Although with the strategy change at D2C business, and the impact from the recent hot weather, the number of active users of own e-mall stays at the same level Other E-malls 322 348 359 346 349 356 339 313 287 261 296 287 283 30
Slide 33: Each business: EC mall average shipping price
4. Result ③Each business (1) EC mall : Average shipping price (Shipping basis) Our own E-malls stayed at same level 2% and other E-malls increased by+ 13% The price basically stays in a reasonable range. 12,638 11,731 11,914 11,720 11,406 10,935 10,736 10,85310,074 10,614 10,907 10,870 10,776 10,240
Slide 34: Each business: EC mall return rate
4. Result ③Each business (1) EC mall : Return rate Return rate of our own E-malls have been steady at around 20%. 30% 29% 29% 27% 27% 27% 26% 26% 26% 25% 25% 25% 22% 22% 21% 22% 22% 21% Our own E-malls 20% 20% 20% 20% 21% 19% 18% 18% Excluding D2C 7% 8% 7% 8% 8% 7% 7% 7% 7% 7% 7% 7% 6% 6% 6% 6% 6% 6
Slide 35: Each business: EC mall number of brands
4. Result ③Each business (1) EC mall : Number of brands The number of brands excluding waja is 3,389. The number of brands including waja is 4,411 4,644 4,849 4,661 4,605 4,590 4,411 4,182 3,969 3,838 3,676 3,632 3,426 3,344 3,361 3,428 3,389 2,972 3,506 2,648 2,458 2,473 2,546 2,327 2,365 2,193 2,0
Slide 36: Each business: Platform e-3PL shipment quantity
4. Result ③Each business (2) Platform : e-3PL shipment quantity (10K units) e-3PL shipments increased steadily by +13%. Our goal is to become “Hub of warehouse” in the shoe industry. 113 + 13% 91 92 92 85 81 81 71 63 63 66 61 56 59 52 46 44 45 39 37 36 13 2018 2Q 3Q 4Q 2019 2Q 3Q 4Q 2020 2Q 3Q 4Q 20
Slide 37: Disclaimer
Disclaimer • This document contains forward-looking statements that are based on current plans, estimates, forecasts or projections by JADE GROUP Inc. as well as JADE GROUP Inc.’s business and industry trends. • These forward-looking statements are subject to various risks and uncertainties. • Known