Slide 1: Presentation Material 2021 Q2
PRESENTATION MATERIAL 2021 Q2 2021.10.14
Slide 2: Summary
SUMMARY • Results of the 1st harf of 2021 was GMV: 9.86bn JPY (YoY: +6%), Sales: 4.69 bn JPY (YoY: -3%) and EBIT: 0.4 bn JPY (YoY: -35%). The biggest reasons of the negative growth during 2Q (June – August) are (a) state of emergency (COIVD19) and (b) the big hit of D2C brand (ReZARD) during 2Q of t
Slide 3: New Vision, New LOCONDO Policy for Long-Term Plan for 2030
New Vision, New LOCONDO Policy for Long-Term Plan for 2030 BE THE ONLY Fast Move quickly and flexibly “Consumers don’t buy shoes online.” “It is difficult to realize DX and OMO“ “LOCONDO can’t develop a good Faith brand.” Gain trust from inside and outside the company LOCONDO has grown by solving th
Slide 4: LOCONDO's ecosystem that consists of the 3 businesses
LOCONDO’s “ecosystem” that consists of the 3 businesses LOCONDO has the 3 businesses that supplement mutually and build those own competitiveness. Contents Sharing inventories: Sell at Contents • High recognition EC offline inventories • Omni store IT & logistic as free return platform shipping EC •
Slide 5: 1. EC Mall
1. EC MALL LOCONDO has own EC mall （LOCONDO.jp & Fashion Walker）and stores in other companies’ EC mall such as Rakuten and Yahoo! LOCONDO.jp Fashion Walker LOCOMALL Rakuten LOCOMALL Yahoo! 5
Slide 6: 2. Platform
2. PLATFORM Provide various systems and services that enable centralization of inventories and integration of digital information through DX（Digital Transformation） BOEM (Official EC) e-3PL LOCOCHOC for offline stores LOCOPOS LoCORE (core system) LOCOPAY (QR code) 6
Slide 7: 3. Brand
3. BRAND LOCONDO has D2C (Direct To Consumer) brands with many famous YouTubers in Japan. LOCONDO also has its own channels (Silver plate). 7
Slide 8: LOCONDO's sales accumulation model
LOCONDO’s sales accumulation model Increased natural influx from search Over 40% * of new customers re-purchase within engine(SEO) as item lineup and brands continuous 18 months through various CRM measures increase new in-flow and new purchasers Expanding lineup Increase in of items and repeaters b
Slide 9: LOCONDO's revenue structure - Break Even Model
LOCONDO’s revenue structure - Break Even Model- A business model in which the operating profit "rate" rises in proportion to sales after exceeding the break-even point. (1) GMV, (2) Marginal profit rate (= gross profit rate – variable cost rate) and (3) Fixed costs are Key Performance Indicators for
Slide 10: EC ratio in the fashion EC market
EC ratio in the fashion EC market The current EC ratio of the domestic fashion market is about 15%. It is expected to rise to around 30%, which is the current US level in 2030, as it rises by 1-2% every year, with an average of 1.5%. EC ratio (2020; estimation) EC ratio (2030; forecast) 50-60 70 Off
Slide 11: Fashion EC market size: 3.5 trillion JPY
Fashion EC market size When the EC ratio rises to 30%, the EC market size will be about 3.5 trillion JPY. 2019 fashion market size *Clothing, 2030 fashion EC market size shoes, bags (estimation） * Clothing, shoes, bags (expected) Market size (2019) 100% = 11.8trillion yen 1.2 1.4 3.5 trillion JPY ($
Slide 12: Locondo Long-term Vision (GMV)
Locondo Long-term Vision (GMV, bn JPY) Get 3% of the market share in the 3.5 trillion JPY market; GMV of 100 billion JPY ($ 1bn) 10 years 100 CAGR + 17% 5 years CAGR + 27% 18.2 21 14.1 6.5 8 9.5 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 (Note) 2022 to 2029 year
Slide 13: Locondo long-term vision (fixed cost)
Locondo long-term vision (fixed cost) – bn JPY Several areas of the new warehouse started operation in May 2021. It will be fully operational from May 2022, and no further expansion is expected for at least five years thereafter. Other costs are planned to increase gradually Rent increase here thoug
Slide 14: Long-term Vision (Marginal Profit and Operating Profit)
LOCONDO Long-term Vision (Marginal Profit and Operating Profit) When the marginal profit (= gross profit-variable cost) is 16% and fixed cost is 6 billion JPY, operating profit (EBIT) is expected to reach at 10 billion JPY when the GMV is 100 billion JPY. Marginal profit rate is 16.0％ （FY2020: 17.2%
Slide 15: Results
RESULTS 15
Slide 16: GMV - Quarterly transition
GMV～Quarterly transition～（Unit: million JPY） In reaction to the large contribution of D2C in the same period of the previous year, Our own E-malls second quarter -13%, Stores in other E-malls+ 8% , BOEM + 8% in total also extended -8% growth rate 5,236 151 177 115 88 Total GMV - 8% 91 128 759 4,811
Slide 17: Sales - Quarterly transition
Sales - Quarterly transition -（Unit: million JPY） Sales are also linked to GMV. -16% compared to last year in the second quarter 2,856 2,700 2,762 2,310 2,376 2,190 2,201 2,218 1,980 1,883 1,966 1,955 -16% 1,476 1,371 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 1Q 2Q 3Q 4Q
Slide 18: Breakdown of sales
Breakdown of sales (Unit: M JPY) However, consignment business that doesn’t have inventory risks and B2B fee business (platform) that are not influenced by EC mall are growing Sales by business segment (1st half of 2021) Growth EC mall (consignment) 2,638 18% EC mall (purchase ) 792 -19% Platform (B
Slide 19: Platform: e-3PL shipment quantity - quarterly transition
Platform: e-3PL shipment quantity-quarterly transition- (10,000 units) As our warehouse expanded, the number of e-3PL shipments increased at + 14%. Our goal is to become “Hub of warehouse” in the shoe industry. 71 + 14% 63 63 61 59 56 52 46 45 44 39 36 37 13 2018 1Q 2Q 3Q 4Q 2019 1Q 2Q 3Q 4Q 2020 1Q
Slide 20: EC mall: Number of active users
EC mall: Number of active users （Unit: thousand JPY） The number of active users in the EC mall business (purchased at least once a year) decreased a bit compared to the first quarter due to the impact of the declaration of a state of emergency. 322 348 Stores in other E-malls 296 287 283 300 306 297
Slide 21: EC mall: Average shipping price
EC mall: Average shipping price (Shipping -based) Decrease of D2C sales volume decreased average shipping price of our own E- mall while decrease of sold item price did that of Stores in other E-malls 12,638 11,731 11,914 11,720 11,406 10,870 10,93510,776 10,736 10,853 10,355 10,564 10,496 Our own E
Slide 22: EC mall: Return rate (excluding D2C brand)
EC mall: Return rate (excluding D2C brand) Return rate of our own EC malls has been steady at around 20%. 30% 29% 29% 27% 27% 27% 26% 26% 26% 25% 25% 25% 22% 22% Our own E-malls 21% 21% 20% 20% 8% 8% 8% 7% 7% 7% 7% 7% 7% 7% 7% 6% 6% 6% 6% 6% 6% 5% Stores in other E-malls 2017 2Q 3Q 4Q 2018 2Q 3Q 4Q
Slide 23: EC mall: Number of brands
EC mall: Number of brands The number of brands continues to increase 3,838 3,676 3,426 2,972 2,648 2,458 2,473 2,546 2,327 2,365 2,126 2,167 2,193 2,097 2018 1Q 2Q 3Q 4Q 2019 1Q 2Q 3Q 4Q 2020 1Q 2Q 3Q 4Q 2021 1Q 2Q 23
Slide 24: Operating profit - Quarterly transition
Operating profit-Quarterly transition (Unit: million JPY) Operating profit (EBIT) was -82% compared to last year in the second quarter 485 504 303 319 141 145 106 87 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q (192) (170) (160) (231
Slide 25: Year to year comparative analysis of operating income
Year to year comparative analysis of operating income （Unit: million JPY） Operating profit decreased year-to-year due to a decrease in D2C'GMV and an increase in costs related to warehouse expansion and bonuses. ＋122 △130 △132 △43 △19 △25 ＋４ 631 406 FY2020 Relocation Fixed Information FY2021 Decreas
Slide 26: Income statement
Income statement （Unit: million JPY） Of the operating profit KPIs, (1) GMV was not good, but (2) marginal profit ratio and (3) fixed costs were controlled as planned. Item FY2020.2Q FY2021.2Q growth rate GMV 9,248 9,860 + 6% Net Sales 4,811 4,687 - 2% Gross profit 3,616 3,726 + 3% (Ratio to GMV) 39.
Slide 27: Balance sheet
Balance sheet （Unit: million JPY） Debt-free management, financial soundness with equity ratio of 64%. However, in case of future big M&A deals, we will consider financial leverage within a sound range. Current Assets 5,126 Current Liabilities 2,532 Deposits received Cash and cash equivalents 2,537 7
Slide 28: SG&A details
SG&A details （Unit: million JPY） Low growth of GMV and increase of some SG&A costs (personnel costs (bonuses) and warehouse rent) resulted in 1.3 points increase of SG&A costs. Item FY2020.2Q % FY2021. 2Q % YoY Main factors of variation Labor costs 599 6.5% 723 7.3% + 0.8% employees 313 3.4% 354 3.6
Slide 29: Plan
PLAN 29
Slide 30: 2021 Summer initiative ALL-IN-ONE package
2021 Summer initiative “ALL-IN-ONE” package (August) ALL-IN-ONE package went better than our expectation…”Rocket Start” • e-3PL: Advanced warehouse that can be used by Fitfit BOEM sales all the businesses in the faction industry and can (March = 100) centralize inventories among them. Free rent and
Slide 31: 2021 AW initiatives (1) GIFT
2021 AW initiatives (1) GIFT (October) Starts “Deluxe gift option” on LOCONDO 1. EC 2. Platform 3. Brand Customers can use the deluxe gift option incl. Start the option on LOCONDO in flowers at 990 JPY, the best price in the EC October and copy it on BOEM in sector. future. Customers can use exchang
Slide 32: 2021 AW initiative (2) SOCIAL EC
2021 AW initiative (2) SOCIAL EC (December) Developing the new function that connects Locondo customers & brands smoothly (applying patent). 1. EC 2. Platform 3. Brand Develop social function in LOCONDO by Launch the function on LOCONDO leveraging 4.4 M membership. in December. Leverage the function
Slide 33: 2021 AW initiative (3) PMI of SWS
2021 AW initiative (3) PMI of SWS – Sports Specialty Mall – (February) SWS (M&A on Sep. 1) restructure will be completed in February 2022. Its system will be shared with LOCONDO and it starts to sell other sports items 1. EC 2. Platform 3. Brand Is discussing with other sports specialty stores We ex
Slide 34: Ongoing projects (will be launched in spring, 2022)
Ongoing projects (will be launched in spring, 2022) 1. Concluded basic agreement to buy 4th 1. EC 2. Platform EC mall (1. LOCOMALL, 2. Fashion Walker, 3. SWS). Plan to complete PMI by the end of next February. 3. Brand 1. EC 2. Platform 2. Develop new D2C brand (relax X yoga) collaborating with one
Slide 35: How to achieve 100 bn JPY GMV
How to achieve 100 bn JPY GMV [bn JPY, rough number]8 EC mall with 5 bn JPY GMV by M&A 2020 (rough)* 2030 (rough) and PMI (excl. LOCOMALL) New M&A – no.8 100 BOEM websites (5) New M&A – no.7 (now, 34) with 0.15 Brand bn JPY average GMV (5) New M&A – no.6 by leveraging e-3PL (5) and ALL-IN-ONE New M&
Slide 36: How to achieve warehouse HUB
How to achieve warehouse HUB【# of shipped items, M pieces, Rough】 Plan to ship 10 M pieces of e-3PL (B2B). This supports sustainable profit and become a big weapon of EC mall and platform services. 10 CAGR +17% 2 2020 2030 * Sales of e-3PL isn’t included in GMV 36
Slide 37: Handling of this material
Handling of this material • This document mentions not only on LOCONDO’s business and market trend but on forecast coming from the current assumption. • The forecast contains various risks and uncertainties. • The result may be different from the forecast due to the known/unknown risks, uncertaintie