Village Vanguard Co., Ltd. · TSE:2769
Village Vanguard — Q1 FY05/12 Earnings Presentation
41 slides from Village Vanguard's earnings presentation, October 2011
Slide 1: Q1 FY05/12 Results Presentation
Cover VV Q1 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 FY05/10 FY05/11 FY05/12 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Est. Q3 Est. Q4 Est. Sales 8,630 8,273 10,290 9,456 9,359 9,125 11,397 9,926 10,158 10,100 12,335 11,078 SG&A 2,799 2,879 3,069 3,117 3,120 3,265 3,401 3,429 3,460 3,588 3,739 3,803 L
Slide 4: BS (Consolidated)
BS (Consolidated) Balance Sheet FY05/10 FY05/11 FY05/12(Result and Estimate) (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Est. Q3 Est. Q4 Est. Cash & Deposit 2,685 2,957 3,503 4,037 3,045 3,378 3,582 3,972 2,586 3,708 4,412 5,142 Inventories 15,003 15,928 15,315 15,466 16,182 17,044 16,726 16,950 17,
Slide 5: CF (Consolidated)
CF (Consolidated) Cash Flow Statement FY05/10 FY05/11 FY05/12 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Est. Q3 Est. Q4 Est. Operating Cash Flow -292 -146 298 1,647 -730 -347 -111 1,143 -1,053 -322 13 1,632 Change in Inventories -872 -1,796 -1,183 -1,335 -644 -1,506 -1,191 -1,415 -881 -2,106 -1,48
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 Shopping Center ■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. ■QK ■new style “Ex
Slide 8: Examples of Our Merchandising Approach (1)
Examples of Our Merchandising Approach (1) Merchandise themed around “365-days of Camera We offer merchandise by creating a unique retail living” space aimed at entertaining the customer Camera Lover other than Camera 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 Purchasing - Reflect customer needs directly Store manager has - Unique challenge to discover new needs absolute discretion Proposition - POP, zone creations, and displa
Slide 12: Hiring Strategy
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 Team
Sourcing Team Role Functions The team assumes the role of in-house (1) Reducing costs by taking advantage of economies of scale (2) "Product ect refining" eff wholesaler, proposing products to stores through marketing activities. (2) Creating competition to promote a "product refining" effect Manufa
Slide 14: Store Openings (Parent)
Store Openings (Parent) Store data as of end-Aug 2011 * Figures in parentheses indicate the number of FC stores. 373 stores nationwide Tohoku * Figures that show an increase or decrease over Q4 are in red. 351 Directly Managed DM 22 (DM) Hokkaido DM 16 Aomori Breakdown 305 VV format FC 2 5 33 new st
Slide 15: VV – Results (Parent)
VV – Results (Parent) © Village Vanguard corporation, All rights reserved. P.14
Slide 16: Parent Income Statement
Parent Income Statement FY05/11 Forecast was upwardly revised at end-1H FY05/11. Q3 and Q4 FY05/11 Versus Plan figures reflect performance vs. revised budgets. Parent Income Statement FY05/10 FY05/11 FY05/12 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Est. Q3 Est. Q4 Est. Sales 8,271 7,827 9,888 9,0
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 (Internal Sourcing Team) 1,578 1,565 2,297 1,904 1,752 1,770 2,713 2,088 2,217 (Other) 4,614 4,361 5,489 5,000 5,027 4,69
Slide 18: OP Analysis
OP Analysis (Million yen) ▲53 ▲256 380 ▲257 ▲53 ▲ 3,351 OP in previous Comparable store Sales in special Sales in new OP in current term HQ expenses Other sales and closed stores stores term © Village Vanguard corporation, All rights reserved. P.17
Slide 19: Store Openings
Store Openings FY05/ FY05/ FY05/ FY05/12(Plan and Actual) 09 10 11 Actual Actual Actual Q1 Q2 Q3 Q4 Full Year Full Full Initial Revised Initial Revised Initial Revised Initial Revised Full Year Actual Initial Plan Plan Year Year Plan Plan Plan Plan Plan Plan Plan Opening 59 34 46 11 10 5 8 1 5 8 7 2
Slide 20: Comparable Store Sales Year on Year
Comparable Store Sales Year on Year Introduction of Dedicated Area Manager system (from FY05/10) led to the loss of core store managers from flagship stores. However, pre-Tohoku quake “Strong sellers at appealing spots cumulative FY05/11 sales were +0.8% YoY in the sales ranking order” Over-focusing
Slide 21: Theme 1: Creating stores customers can't resist
Theme 1 Creating stores that customers can’t resist visiting and buying from KPI – Increasing sales at Village Vanguard Product line-up triggers impulse buying, thus increasing the Increase numbers of fans of stores number of purchased items to increase the number of purchasing customers Increase in
Slide 22: Theme 2: Expanding the variety of merchandise
Theme 2 Expanding the variety of merchandise YoY trends in sourcing teams’ sales share Current measures Strengthening business with existing suppliers Trends in trade value per supplier… Thousand Yen Trends in sourcing teams’ supplier numbers Expand the variety of products by The share of sourcing t
Slide 23: Inventory Control
Theme 3 Inventory Control Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY05/10 FY05/10 FY05/10 FY05/10 FY05/11 FY05/11 FY05/11 FY05/11 FY05/12 (Million Yen) Cash Flow From Operations -197 -173 380 1,756 -718 -523 -214 1,042 -950 ■Net Income Before Tax 821 1,320 2,498 3,256 502 1,015 2,371 3,065 672 ■Net Increase (Dec
Slide 24: Company Profile Titicaca
Company Profile Titicaca © Village Vanguard corporation, All rights reserved. P.23
Slide 25: Outside Titicaca Stores
Outside Titicaca Stores Lake Town Lalaport Shin Shibuya store (Shibuya, Tokyo) store Misato store (Koshigara , Saitama) (Misato, Saitama) Early days Now Started as a folk art shop, with signs and store fixtures Warm, natural store interior, Image of a Mexican resort hand‐made by staff, in order emph
Slide 26: New Titicaca Stores
New Titicaca Stores 本日閉店後の撮影 Niihama Aeon Mall Fairmall Fukui Aeon Yahata Higashi Shopping Center Opened May 2011 258 sq/m Opened June 2011 142 sq/m Opened July 2011 165 sq/m Aeon Sakudaira Shopping Center Kurashiki Aeon Mall Interpark Utsonomiya Opened July 2011 192 sq/m Opened September 2011 99 sq
Slide 27: Inside Titicaca Stores
Inside Titicaca Stores © Village Vanguard corporation, All rights reserved. P.26
Slide 28: Store Openings
Store Openings Store data as of end-August 2011 67 Stores Nationwide (64) * Figures in parentheses indicate the number of FC stores. * Figures that increased or decreased from end-May 2011 are in red. Tohoku 65 DM stores (62) DM 4 2 FC stores (2) Figures in parentheses indicate the number of stores
Slide 29: Titicaca - Results
Titicaca - Results Income Statement: Met budget. Q1 FY05/12 sales on plan, Q1 FY05/12 recurring profit 10.8% above plan. Q3 and Q4 FY05/11 vs. Plan figures reflect performance vs. revised budgets. Titicaca Income Statement FY05/10 FY05/11 FY05/12 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Est. Q3 E
Slide 30: Results
Results Sales YoY Q1 sales +42.6% YoY (+247 million yen) Existing stores +8.3% (+31 million yen) Wholesale and FC -3.0% (-0.9 million yen) New stores (+225 million yen) Net increase in number of stores: 15 Improvement in OPM YoY Q1 OPM improved to 13.2% from 11.5% YoY - Entire company Labor cost to
Slide 31: Results: Comparable store sales
Results Comparable store sales Cumulative Q1 +8.3% YoY Achieving positive YoY sales for 42 consecutive +28.5% months since Feb. +23.8% 2008 +15.4% +13.6% +12.1% Comparable store sales +6.2% +4.5% for those stores 震災の影響のない +5.1% unaffected by March existing storesの昨 2011’s earthquake 対 -16.1% +4.1% Y
Slide 32: Growth Strategies: Large-format stores
Growth Strategies Roll out of large-format stores Stores with a floor area of 165 sq/m or more generated an OPM 2.1% higher than those below 165 sq/m. Expanded product line-up has enabled openings of stores with floor areas of 265 sq/m (100: average of all stores) Increased offers to open larger sto
Slide 33: Growth Strategies: Dedicated Area Managers
Growth Strategies Introduction of Dedicated Area Managers who are not tied to any one store Acting Area Managers (past) Dedicated area managers Charged with managing a single store but also responsible (introduction from Q1 FY05/12 onwards) for area management Dedicated management for the areas unde
Slide 34: Village Vanguard (Hong Kong) Limited
Village Vanguard (Hong Kong) Limited © Village Vanguard corporation, All rights reserved. P.33
Slide 35: Inside Stores (VVHK)
Inside Stores (VVHK) © Village Vanguard corporation, All rights reserved. P.34
Slide 36: Village Vanguard Hong Kong - Results
Village Vanguard Hong Kong ‐ Results FY05/11(Actual) FY05/11(Actual and Plan) Store Locations (Million Yen) Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Est. Est. Est. Sales 36 59 90 118 29 62 103 132 1 Dragon Center Store (Closed Oct 2011) 2 Versus Plan(%) -29.6 -42.1 -0.3 +1.7 92.6 - - - Megabox Store YoY (%) - - - -
Slide 37: Village Vanguard Webbed Limited
Village Vanguard Webbed Limited (Consolidated from FY05/11 Q4) © Village Vanguard corporation, All rights reserved. P.36
Slide 38: Results and Sales YoY
Results and Sales YoY (Thousand Yen) ■Sales YoY (*Based on value of customers’ orders) FY05/12（Result and Plan PL Q1 Q2 Q3 Q4 （Result） （Plan） （Plan） （Plan） Market on new website Sales 20,720 68,846 141,050 195,165 Vs. Plan (%) 75.9 - - - （Changes） （-6,578） Gross Profit 4,714 11,359 22,919 31,848 Vs.
Slide 39: Concept and future strategy for the new site
Concept and future strategy for the new site To promote competition within the website and enhance product variety by creating a website where users can freely sell goods. Selling VV goods + goods offered by users Selling VV goods Customer Customer Five billion yen’s worth of goods passing through U
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