Vega Corporation Co., Ltd. · TSE:3542

Vega — Q3 FY2023 Earnings Presentation

45 slides from Vega's earnings presentation, February 2023

Slide 1: Quarterly Financial Results for the Nine Months Ended December 31, 2022
デザイン依頼中 For the Nine Months Ended December 31, 2022 Quarterly Financial Results Vega corporation Co., Ltd. / Securities code: 3542 Copyright 2022 VEGA corporation. All Rights Reserved. 1
Slide 2: Agenda
1 Business Description Overview of Quarterly Financial Results 2 for the Nine Months Ended December 31, 2022 3 Report on LOWYA Business 4 Report on DOKODEMO Business 5 Financial Results Outlook 6 Shareholder Benefits 7 Appendix Copyright 2022 VEGA corporation. All Rights Reserved. 2
Slide 4: LOWYA Business Model
LOWYA Business Business Model In addition to offering private brand (PB) products at the flagship store (the Company’s e-commerce website) and major e-commerce marketplace stores, products of other companies’ brands are offered at the flagship store. The Company started a new wholesale business in S
Slide 5: DOKODEMO Business Model
DOKODEMO Business Business Model Operate a cross-border e-commerce platform with all functions including settlement, logistics and CS, which enables seller companies to offer Japanese products to overseas users Japan Overseas Seller T he Company Users companies Displayed in 5 languages, Orders with
Slide 6: Difference in Sales Recognition Methods
Difference in Sales Recognition Methods LOWYA business is a D2C*1 business centered on furniture and interior sundries DOKODEMO business is a cross-border e-commerce platform business that has a model that earns commissions according to the value of merchandise sold GMV Promotion Gross Net Sales Mer
Slide 8: Financial Highlight
Financial Highlight LOWYA business recovered, and sales reached a record high in 3Q. Profits are progressing faster than initially anticipated. Overview of 3Q YoY Company-wide GMV (LOWYA) 4,232 million yen 105.9% Results GMV (DOKODEMO) 1,198 million yen 117.4% Net sales 4,180 million yen 108.1% Oper
Slide 9: Whole Company Financial Results for 3Q
Whole Company Financial Results for the Nine Months Ended December 31, 2022 (Million yen) Fiscal year ended Fiscal year ending Mar. 31, 2022 Mar. 31, 2023 YoY 3Q results Sales ratio 3Q results Sales ratio Net sales 3,868 100.0% 4,180 100.0% 108.1% (+312) Gross profit 2,160 55.9% 2,058 49.2% 95.3% (-
Slide 10: Whole Company Financial Results, Nine Months Cumulative
Whole Company Financial Results for the Nine Months Ended December 31, 2022 (1Q-3Q Cumulative) The third quarter ended December 31, 2022 was strong, and net sales for the nine months exceeded those of the same period last year. (Million yen) Fiscal year ended Fiscal year ending Mar. 31, 2022 Mar. 31
Slide 11: Quarterly Net Sales and Operating Profit
Whole Company Quarterly Net Sales and Operating Profit Record-high net sales in 3Q due to recovery of LOWYA business. Profit progressed faster than the pace initially anticipated due to cost reductions. However, the cost of sales ratio is rising due to ongoing depreciation of the yen, and controllin
Slide 12: Causes of Increase/Decrease in Quarterly Operating Profit
Whole Company Causes of Increase/Decrease in Quarterly Operating Profit The Company reduced SG&A expenses by 6.8 pt (129 million yen) YoY by consolidating distribution bases, improving the efficiency of delivery and advertising, and relocating the Tokyo Office, thereby enhancing the ability to withs
Slide 13: Whole Company Balance Sheet
Whole Company Balance Sheet Cash and deposits increased significantly due to inventory reduction. (Million yen) Current fiscal year Current fiscal year Previous fiscal year Previous fiscal year 3Q 3Q (as of Mar. 31, 2022) (as of Mar. 31, 2022) (as of Dec. 31, 2022) (as of Dec. 31, 2022) Current asse
Slide 15: Management Indicators
LOWYA Business Management Indicators GMV in the LOWYA business increased 105.9% YoY. Membership of the flagship store has continued to grow steadily, reaching 1.3 million members. The ratio of sales (GMV) to repeat customers has increased solidly. (Million yen) Timeframe used Nine months ended Nine
Slide 16: Quarterly Net Sales
LOWYA Business Quarterly Net Sales Marketplace stores maintained strong sales, and net sales reached a new record high in 3Q. (Million yen) Net sales Net sales YoY 107.5% 6000 5,138 5000 4,655 4,326 4,428 4,013 3,978 4,017 4000 3,737 3,532 4,246 3,204 3,233 4,001 3,919 3,045 3000 2000 1000 0 1Q 2Q 3
Slide 17: Business Total Monthly GMV
LOWYA Business Business Total Monthly GMV GMV in the overall LOWYA business exceeded 100% YoY from October 2022, with strong performance accelerating. (Million yen) FY2022 FY2023 YoY 2,000 110.8% 104.4% 1,917 103.5% 101.8% 1,756 97.9% 97.7% 92.8% 88.2% 1,576 80.6% 1,562 1,542 1,519 1,500 1,480 1,450
Slide 18: Cost of Sales Ratio (vs. GMV)
LOWYA Business Cost of Sales Ratio (vs. GMV) Although marine container transportation costs peaked in 2Q and then showed signs of a downward trend, the significant depreciation of the yen resulted in an increased cost of sales ratio. (%) Cost of sales ratio Up 7.4 pt 50.1 48.2 46.8 44.2 43.9 43.9 43
Slide 19: Quarterly SG&A Expenses Ratio
LOWYA Business Quarterly SG&A Expenses Ratio (against Net Sales) In the LOWYA business, the Company reduced SG&A expenses by 6.3 pt (113 million yen) YoY by consolidating distribution bases, improving the efficiency of delivery and advertising, and relocating the Tokyo Office, thereby enhancing its
Slide 20: KPI of the Flagship Store (Repeat Members)
LOWYA Business KPI of the Flagship Store (Repeat Members) The 12-month GMV* by repeat members has been on the rise as guest purchasers become members and new members turn into repeat members. GMV by member type (LTM*) (Million yen) Repeat members New members Guest purchasers Repeat member order rati
Slide 21: Initiatives with Aeon Retail Co. (Wholesale)
LOWYA Business Initiatives with Aeon Retail Co. (Wholesale) Opened the second store, at AEON STYLE Kita Toda, at the end of October. Expansion into multiple stores continues to be under discussion. Customer reactions at stores I came across cute furniture that I’d never seen at Aeon before. It was a
Slide 22: Decision to Expand into Physical Stores
LOWYA Business Decision to Expand into Physical Stores (Directly-Managed Store) For the first time since its founding, the Company will open a directly-managed store in April 2023 (planned). The Company plans to consider opening directly-managed stores in other regions. Location: Kyudaishinmachi, Ni
Slide 24: DOKODEMO Business Management Indicators
DOKODEMO Business Management Indicators While memberships and the number of app DLs increased smoothly, average basket value grew and GMV continued to show a high growth rate. Nine months ended Nine months ended Item YoY December 31, 2021 December 31, 2022 GMV (million yen) 1,021 1,198 117.4% (+177)
Slide 25: DOKODEMO GMV and Net Business Income
DOKODEMO Business GMV and Net Business Income GMV rose 17.4% year on year. The strong demand for certain products caused by the spread of the COVID-19 pandemic in Taiwan in 1Q has receded, but the Company has continued to maintain a GMV growth trend while limiting upfront investments, as planned. GM
Slide 26: DOKODEMO Business GMV
DOKODEMO Business GMV Repeat customer GMV increased further, accounting for 83.6% (Million yen) Repeat customer GMV New customer GMV Ratio of repeat customers 81.2% 83.6% 1,600 1,573 75.1% 1,400 70.7% 77.3% 72.7% 357 1,246 1,198 1,200 68.5% 65.0% 64.7% 64.9% 64.4% 234 1,021 1,056 196 1,000 56.9% 56.
Slide 27: Ratio of GMV by Destination Area
DOKODEMO Business Ratio of GMV by Destination Area Deliveries to Asia, mainly Taiwan, account for more than 90% of GMV By region By 国別 country Middle East 0.2％ Oceania 0.8％ Europe 0.9% North America Korea 3.3％米国 US 0.3％香港 Hong Kong 2.9％ 3.0 台湾 Taiwan .6％ 66.8 ％ 84.0 85 .6％ Malaysia Asia 0.2％ Phili
Slide 29: Revision of Financial Results Forecast for FY2023
Revision of Financial Results Forecast for FY2023 We have revised our financial results forecast based on the progress of results for the nine months ended December 31, 2022. Net sales were almost in line with the original plan. Although the cost of sales ratio rose significantly, cost reductions we
Slide 31: Shareholder Benefits
Shareholder Benefits The following shareholder benefits will be offered to shareholders who hold one unit (100 shares) or more as of March 31, 2023. In addition to the existing optional benefits, the benefits to be distributed to all eligible shareholders will be expanded. FY2022 (Reference Date: Ma
Slide 33: Market Scale (Past Trend)
LOWYA Business Market Scale (Past Trend) The furniture and interior e-commerce market is a growth market, expanding with a CAGR of 5.51% (2016-2020). The rate of e-commerce shift remains relatively low compared to other products, and the further progress of e-commerce shift is forecast. Comparison o
Slide 34: Positioning
LOWYA Business Positioning Establishing a position in the “trendy & low price” space of the furniture and interior products market. High price High-class High-class antique overseas furniture High-quality furniture Trendy area standard Traditional furniture furniture Select fashionable furniture Sim
Slide 35: Purchaser Data
LOWYA Business Purchaser Data Showing higher ratio of females in their 20s to 30s, and in the Kanto region by area Age distribution Ratio of male vs. female Area distribution 60 and older 2% 50 to 59 Other 7% Male Kyushu 14% 40 to 49 16% 29 and 36% 8% younger Kanto Female Tokai 30 to 39 45% 64% 9% K
Slide 36: Target Market
LOWYA Business Target Market While continuing to position the expansion of the e-commerce market as a driver of growth, expand the target market to the physical store market in light of the current low rate of e-commerce shift. Future target market Domestic market for furniture, interior, and periph
Slide 37: Outline of the Business Strategy
LOWYA Business Outline of the Business Strategy In light of changes to the external environment, accelerate GMV growth by newly expanding into physical stores. Internal Environment External Environment As a result of our focus on Before the COVID-19 pandemic After the COVID-19 pandemic capturing gro
Slide 38: Strategy for Physical Stores
LOWYA Business Strategy for Physical Stores Leverage the assets cultivated by specializing in the e-commerce market and being involved consistently in the full value chain of planning, manufacturing, and sales, to the maximum extent. Attracting Customers Based on our online customer base, we possess
Slide 39: Building an OMO Structure
LOWYA Business Building an OMO Structure By adding the options of directly-managed stores and wholesalers to the channels for awareness, purchase, and reception, we can set the channels on multiple tracks all at once. Awareness Purchase Reception Delivery Flagship store Computers SEO Mobile devices
Slide 40: Logo Recognition Rate Raising Effects of Physical Stores
LOWYA Business Recognition Rate Raising Effects of Expansion into Physical Stores Recognition of retailers specializing in e-commerce is low compared to the scale of sales, and the recognition rate of LOWYA remains at just 15.4%. The expansion into physical stores can also be positioned as a means t
Slide 41: Strategy for the Flagship Store
LOWYA Business Strategy for the Flagship Store (the Company's E-commerce Website) Partial review of the mid-term strategy for the flagship store (the company's e-commerce website) in light of the serious consideration of expansion into physical stores Attract more customers Enhance product lineup St
Slide 42: Net Sales
Net Sales The Company has maintained a growth trend since its founding Net sales Commenced expansion into (Million yen) Increased delivery fees Spread of physical stores due to delivery crisis COVID-19 June 2016, listed on the stock exchange 16,800 – 19,313 17,300 16,832 12,977 13,322 13,570 10,960
Slide 43: Impact of a New Revenue Recognition Standard
LOWYA Business Impact of a New Revenue Recognition Standard As a new accounting standard for revenue recognition (new Revenue Recognition Standard) has been applied from the fiscal year ended March 31, 2022 (FY2021), which has created a difference between GMV and sales, the Company announces GMV as
Slide 44: DOKODEMO Business Market Scale
DOKODEMO事業 Market Scale With a platform specialized for seller companies in Japan, the Company aims to capture the abundant opportunities presented by massive markets. BtoC cross-border e-commerce market scale (billion dollars) *1 Cross-border e-commerce usage by region (2018 ) *2 Have never used Ha
Slide 45: IR Inquiries
IR Inquiries https://www.vega-c.com/contact/ir/ 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

Vega — Q3 FY2023 Earnings Presentation on 6ix

Vega — Q3 FY2023 Earnings Presentation

Slide 1: Quarterly Financial Results for the Nine Months Ended December 31, 2022

Slide 2: Agenda

Slide 3: Business Description

Slide 4: LOWYA Business Model

Slide 5: DOKODEMO Business Model

Slide 6: Difference in Sales Recognition Methods

Slide 7: Overview of Quarterly Financial Results

Slide 8: Financial Highlight

Slide 9: Whole Company Financial Results for 3Q

Slide 10: Whole Company Financial Results, Nine Months Cumulative

Slide 11: Quarterly Net Sales and Operating Profit

Slide 12: Causes of Increase/Decrease in Quarterly Operating Profit

Slide 13: Whole Company Balance Sheet

Slide 14: Report on LOWYA Business

Slide 15: Management Indicators

Slide 16: Quarterly Net Sales

Slide 17: Business Total Monthly GMV

Slide 18: Cost of Sales Ratio (vs. GMV)

Slide 19: Quarterly SG&A Expenses Ratio

Slide 20: KPI of the Flagship Store (Repeat Members)

Slide 21: Initiatives with Aeon Retail Co. (Wholesale)

Slide 22: Decision to Expand into Physical Stores

Slide 23: Report on DOKODEMO Business

Slide 24: DOKODEMO Business Management Indicators

Slide 25: DOKODEMO GMV and Net Business Income

Slide 26: DOKODEMO Business GMV

Slide 27: Ratio of GMV by Destination Area

Slide 28: Financial Results Outlook

Slide 29: Revision of Financial Results Forecast for FY2023

Slide 30: Shareholder Benefits

Slide 31: Shareholder Benefits

Slide 32: Appendix

Slide 33: Market Scale (Past Trend)

Slide 34: Positioning

Slide 35: Purchaser Data

Slide 36: Target Market

Slide 37: Outline of the Business Strategy

Slide 38: Strategy for Physical Stores

Slide 39: Building an OMO Structure

Slide 40: Logo Recognition Rate Raising Effects of Physical Stores

Slide 41: Strategy for the Flagship Store

Slide 42: Net Sales

Slide 43: Impact of a New Revenue Recognition Standard

Slide 44: DOKODEMO Business Market Scale

Slide 45: IR Inquiries