Jade Group, Inc. · TSE:3558
Jade — LOCONDO — FY2022 1Q Earnings Presentation
36 slides from Jade's earnings presentation, Jul 15, 2022
Slide 1: Presentation Material FY 2022 1Q
PRESENTATION MATERIAL FY 2022 1Q 2022.7.15
Slide 2: 目 次
目 次 1. Summary 4. Result 2. Our Business ① P&L ① Vision, Mission and Policy (1) GMV ② LOCONDO’s seven initiatives for SDGs (2) Sales ③ Business model (1) LOCONDO’s “ecosystem” that consists of the 3 (3) SG&A businesses (4) Operating profit (2) Sales accumulation model ② B/S (3) Break-even point Mode
Slide 3: 1. Summary
1. SUMMARY • GMV grew to 5.57 bn JPY (growth: +10.4%, vs annual plan: 21.8%), and Operating profit grew to 0.35 bn JPY (growth: +9.7%, vs annual plan: 35.0% - 38.9%). • GMV grew mainly supported by the recovery of the market, and direct/indirect contribution of SWS/waja M&A. The annual plan includes
Slide 4: Our Business
Our Business 4
Slide 5: Vision, Mission and Policy
2. Our Business ①Vision, Mission and Policy VISION BE THE ONLY Breaking stereotypes and bring “ONLY LOCONDO CAN DO” MISSION Bring “Revolution” to the industry, and “flexibility” to clients Resolve the voices in shoes/fashion industry, and bring flexible/happy experience to clients. POLICY Fast, Fait
Slide 6: LOCONDO's seven initiatives for SDGs (1/2)
2. Our Business ②LOCONDO’s seven initiatives for SDGs (1/2) ① Think of energy ⚫ Using LED at warehouse ⚫ Implemented Big Ass Fans 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
Slide 7: LOCONDO's seven initiatives for SDGs (2/2)
2. Our Business ② LOCONDO’s 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 ⚫
Slide 8: Business model: ecosystem of the 3 businesses
2. Our Business ③Business model (1) “ecosystem” that consists of the 3 businesses LOCONDO has 3 businesses connected complementary and the ecosystem creates our own competitiveness. Contents Sharing inventories: Sell Contents • High recognition offline inventories at EC • Omni store IT & logistic as
Slide 9: EC MALL
EC PF 【EC MALL 】 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 and “increase in the product lineup" incl
Slide 10: EC mall age distribution
【EC mall】Age distribution Realized the balanced portfolio by adding Fashion Walker. Membership basis 1,600 thousand 1,400 1,200 1,000 800 600 400 200 0 -20 20s 30s 40s 50s 60s LOCONDO FASHION WALKER SWS waja TTL 10 (Note) Member with an effective birthday data from our own mall
Slide 11: PLATFORM
EC PF 【PLATFORM】 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 perfect omni strategy. BOEM (Official EC) e-3
Slide 12: BRAND
EC PF 【BRAND】 Brand There are two major brand businesses, the “brand agency business", which is mainly developed as an exclusive agency for overseas brands, and the "D2C (Direct To Consumer) brand business," which is developed in-house in collaboration with influencers. Through M&A and alliances, we
Slide 13: Business model: sales accumulation model
2. Our Business ③Business 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. 40% * of new custo
Slide 14: Profit structure: break-even point model
2. Our Business ③Business 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 15: MTB and LTV
MTB and LTV 15
Slide 16: Overview of the Mid-term business plan
3. MTB and LTV ①Overview of the Mid-term business plan (MTB) • We will take over Reebok Japan business as one of the core brand to LOCONDO business. We will start to manage the Reebok operation from Oct 1st 2022 under the newly established joint-venture company between LOCONDO (66%) and ITOCHU Corpo
Slide 17: 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 19%. It is expected to increase to approx. 40% in 2030, where the EC market size will be approx. 3.5 trillion JPY. EC ratio 2030 fashion EC market size * Clothing, shoes, bags (expected) 2020
Slide 18: GMV mid-term and long-term vision
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 Oku,
Slide 19: GMV by business FY2021 to FY2030
3. MTB and LTV ③GMV (unit; JPY 100MM) FY 2021* FY 2030 (rough number) Reebok • Brand’s GMV at EC handled only by New M&A – no.8 LOCONDO Inc (Non- (50) consolidated) is Brand New M&A – no.7 counted under Brand (50) New M&A – no.6 (50) • Reebok business will New M&A – no.5 be handled by RBKJ LOCONDO L
Slide 20: GMV growth drivers by business
3. MTB and LTV ③GMV (unit: JPY 100MM) 2021 2030 CAGR key growth drivers (Actual*) (rough) Utilize the ecosystem to strengthen the lineup of items. Organic LOCONDO 12 36 + 13％ growth through aggressive promotion. Reebok will be the additional driver Standardizing the lineup of items and inventory wit
Slide 21: Fixed cost forecast
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 Includes; 60 [Rent] LOCOPORT III Start renting all floors (100,000 m2) [Others]
Slide 22: 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 FY21 : 13.3%) 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 23: Results
RESULTS 23
Slide 24: Result: P&L
4. Result ①P&L (unit; JPY 100MM) GMV increased mainly by healthy growth of LOCONDO.jp as well as direct/indirect impact by M&A. Strong growth at PF business also supports the 10% YoY GMV growth. Revenue decreased due to the accounting standard change but grew 1% before considering the change. Gross
Slide 25: P&L: GMV
4. Result ①P&L (1) GMV（unit; JPY 100） Growth at LOCONDO.jp and M&A of SWS and waja drove + 8% growth at our own E-malls. BOEM kept showing a strong growth at + 13%, and LOCOCHOC also shown the strong growth at + 122%, resulted + 10% growth as a whole Growth rate Total GMV + 10% 5,572 Others (stores,
Slide 26: P&L: Revenue
4. Result ①P&L (2)Revenue（unit; JPY MM) Revenue declined by - 0% due to the change of accounting standard, but increased 1% before the change. 2,856 2,700 2,762 2,589 2,598 - 0% 2,310 2,376 (2,354) (+1%) 2,190 2,201 2,218 1,980 1,883 1,966 1,955 2,300 1,476 1,371 2018 2018 2018 2018 2019 2019 2019 2
Slide 27: P&L: SG&A
4. Result ①P&L (3)SG&A (unit; JPY MM) Although the rent for the new warehouse increased (will see last increase in June 2022 as planned,) we could improve the SG&A ratio by 2.6% through controlling costs such as optimization of ads and logistics as well as reduction of fees. The change of accounting
Slide 28: P&L: Operating Profit
4. Result ①P&L (4)Operating Profit (unit; JPY MM) Operating profit increased by + 9% 504 485 350 319 303 303 173 145 100 105 87 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 2022 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q (125) (192) (231) (231) (238) (248)
Slide 29: YoY comparative analysis of operating income
4. Result ①P&L (4) YoY comparative analysis of operating income (Unit: JPY MM) Although the rent for the new warehouse increased, operating profit increased by + 9% mainly due to GMV growth, cost reduction such as at ads, and the tax reduction due to the capital reduction + 15 ＋16 △ 47 △ 19 △ 15 +9
Slide 30: Result: B/S
4. Result ②B/S (unit; JPY MM) Debt-free management, financial soundness with equity ratio at 66%. Established RBKJ corporation (subsidiary handling Reebok business) on June 2nd. Current Assets 5,884 Current Liabilities 2,613 Deposits received Cash and cash equivalents 3,583 1,066 for consignment sal
Slide 31: EC mall: number of active users
4. Result ③Each business (1) EC mall : number of active users (unit; K) Although the number of active users in Our own E-malls decreased YoY due to the decline of active users relating to ReZARD business in FY21 2Q, the total number increased steadily by + 2% YoY Other E-malls 322 356 359 348 349 29
Slide 32: EC mall: average shipping price
4. Result ③Each business (1) EC mall : Average shipping price (Shipping basis) Our own E-malls increased by + 1% and other E-malls increased by+ 3% The price basically stays in a reasonable range. 12,638 11,731 11,914 11,720 11,406 10,853 10,074 10,614 10,870 10,935 10,776 10,736 10,355 10,564 10,49
Slide 33: 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% Our own E-malls 21% 20% 20% 20% 19% 18% 18% Excluding D2C 8% 8% 8% 7% 7% 7% 7% 7% 7% 7% 7% 6% 6% 6% 6% 6% 6% 6% 6% 5% 5% Other E-m
Slide 34: EC mall: number of brands
4. Result ③Each business (1) EC mall : Number of brands The number of brands excluding waja decreased down to 3,506 because we strategically stopped handling part of LOCONDO Beauty business. The number of brands including waja is 4,644 4,182 4,644 3,969 3,838 3,676 3,426 2,972 3,506 2,648 2,473 2,54
Slide 35: Platform: e-3PL shipment quantity
4. Result ③Each business (2) Platform : e-3PL shipment quantity (10K units) ALL-IN-ONE package started in August 2021 drove the increase of e-3PL shipments by +43%. Our goal is to become “Hub of warehouse” in the shoe industry. 91 85 + 43% 71 66 61 63 63 59 56 52 46 44 45 39 37 36 13 2018 2Q 3Q 4Q 2
Slide 36: Disclaimer
Disclaimer • This document contains forward-looking statements that are based on current plans, estimates, forecasts or projections by LOCONDO Inc. as well as LOCONDO Inc.’s business and industry trends. • These forward-looking statements are subject to various risks and uncertainties. • Known or un