Village Vanguard Co., Ltd. · TSE:2769
Village Vanguard — FY05/11 Earnings Presentation
39 slides from Village Vanguard's earnings presentation, 2011
Slide 1: FY05/11 Results Presentation
Cover VV FY05/11 Results l Presentation i
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: Impact from the Great East Japan Earthquake
Impact from the Great East Japan Earthquake Our thoughts go out to all of the victims of the Great East Japan Earthquake 1. Future Impact ① Currently closed stores ② Stores in blackout areas ③ Fukushima I Nuclear Power Plant Stores currently closed Location VV Titicaca VV Titicaca As of March 12 89
Slide 4: 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 Est. Q2 Est. Q3 Est. Q4 Est. Sales 8,630 8,273 10,290 9,456 9,359 9,125 11,397 9,926 10,204 10,054 12,335 11,078 SG&A 2 799 2,799 2 879 2,879 3 069 3,069 3 117 3,117 3 120 3,120 3 265 3,
Slide 5: BS (Consolidated)
BS (Consolidated) Balance Sheet FY05/10 FY05/11 FY05/12 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Est. Q2 Est. Q3 Est. Q4 Est. Cash h & Deposit 2,685 2,957 3,503 4,037 3,045 3,378 3,582 3,972 2,990 3,708 4,412 5,142 Inventories 15,003 15,928 15,315 15,466 16,182 17,044 16,726 16,950 18,146 19,057 18,
Slide 6: CF (Consolidated)
CF (Consolidated) Cash Flow Statement FY05/10 FY05/11 FY05/12 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Est. Q2 Est. Q3 Est. Q4 Est. Operating Cash Flow -292 -146 298 1,647 -730 -347 -111 1,143 -686 -322 13 1,632 Change in Inventories -872 -1,796 -1,183 -1,335 -644 -1,506 -1,191 -1,415 -1,195 -2,106
Slide 7: Parent Company Village Vanguard Corporation
Parent Company Village Vanguard Corporation © Village Vanguard corporation, All rights reserved. P.6
Slide 8: What We Do
What We Do Standalone Mall-located Mall located store store ■Village Vanguard ■ Diner Our concept is “A A bookstore where you can play. play ” By bringing together various An old-school A ld h l hamburger h b shop h modeled d l d products such as books, variety goods, and CDs, our stores have a uniq
Slide 9: Examples of Our Merchandising Approach (1)
Examples of Our Merchandising Approach (1) Merchandise themed on “365 days of Camera We offer merchandise by creating a unique retail Living“… space aimed at entertaining the customer Toy camera “HOLGA” Camera-shaped shoulder bag Very popular with amateur For example, merchandise themed around “Turn
Slide 10: Examples of Our Merchandising Approach (2)
Examples of Our Merchandising Approach (2) © Village Vanguard corporation, All rights reserved. P.9
Slide 11: Examples of Our Merchandising Approach (3)
Examples of Our Merchandising Approach (3) © Village Vanguard corporation, All rights reserved. P.10
Slide 12: How Do We Sell?
How Do We Sell? We delegate both purchasing and sales decisions to the store level Marketing M k ti - 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
Slide 13: Hiring Strategy
Hiring Strategy Hiring Strategy Fullll 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.12
Slide 14: Store Openings (Parent)
Store Openings (Parent) Store data as of end-May 2011 * Figures in parentheses indicate the number of FC stores. 365 stores nationwide Tohoku * Figures that show an increase or decrease over Q3 343 Directly Managed (DM) are in red. DM 21 Hokkaido 296 VV format DM 16 32 new style format Aomori FC 2 5
Slide 15: VV – Results (Parent)
VV – Results (Parent) © Village Vanguard corporation, All rights reserved. P.14
Slide 16: Parent Income Statement
Parent Income Statement Q3 and Q4 FY05/11 Versus Plan figures reflect performance vs. revised budgets. Income Statement FY05/10 FY05/11 FY05/12 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Est. Q2 Est. Q3 Est. Q4 Est. Sales 8,271 7,827 9,888 9,008 8,783 8,402 10,776 9,315 9,348 8,935 11,329 10,102 Gross
Slide 17: Sales by Category
Sales by Category Sales by Category FY05/09 FY05/10 FY05/11 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 SPICE (Parent) 5,109 5,243 7,102 6,310 6,193 5,926 7,785 6,904 6,780 6,461 8,609 7,177 (Internal Sourcing Team) 1,180 1,332 2,004 1,738 1,578 1,565 2,297 1,904 1,752 1,770 2,713 2,088 (O h )
Slide 18: Year on Year Sales (by age of store)
Year on Year Sales (by age of store) 110.0% Year on Year Sales 105 0% 105.0% 100.0% 95.0% +3.0% +0.9% % +1.5% +1.0% 90 0% 90.0% ‐1.4% 85.0% 80.0% 6 years or more 5 years 4 years 3 years 2 years 6 years or 1 year or Age of Store 5 4 3 2 more less Number of Stores* 150 36 27 57 32 39 Year on Year Sale
Slide 19: OP Analysis
OP Analysis (Million Yen) 3,700 Decline in OP due to increased overheads (non- store costs) 3,600 -53 53 -256 million yen Main reasons: ・ Higher labor costs (new area manager system, increased personnel at sourcing team etc.) Increase in OP from new stores -216 million yen 3 500 3,500 (less than 13
Slide 20: Store Openings (Incl. Titicaca Subsidiary)
Store Openings (Incl. Titicaca Subsidiary) New Openings & Closures FY05/09 FY05/10 FY05/11 FY05/11 FY05/12 Plan Plan Act. 1H 2H Full-Year Openings Village Vanguard 42 30 33 39 12 9 21 new style 8 1 7 7 4 0 4 QK 5 0 0 0 0 0 0 Diner 4 1 0 0 0 0 0 FC 0 2 0 0 0 0 0 Titicaca 12 16 8 15 9 10 19 Total New
Slide 21: Year on Year Retail Sales at Existing Stores
Year on Year Retail Sales at Existing Stores (%) 既存店売上昨対 存店売上昨対 YoY sales at existing stores “Strong sellers occupying appealing 114 spots in the sales rankings” Over-focusing on strong sellers based on data Lack of variety leads to temporary increase in sales. “Quick and easy” strategies gave store
Slide 22: Creating stores customers want to visit every day
Theme 1 Creating stores customers want to visit every day Per-store dailyy average g sales have been decreasing g slightly g y over the last two FYs. There has been a growing gap in sales between weekends/ holidays and ♪ Ratio of weekday average sales to weekdays during this period. weekend+ holiday
Slide 23: Enhancing variety through internal sourcing team
Theme 2 Enhancing variety through greater contribution to sales by internal sourcing team While the number of suppliers increased by about fourfold YoY, the number of suppliers actually shipping to stores only g the period. doubled during p Monthly average value shipped per supplier and number of st
Slide 24: Inventory Control
Theme 3 Inventory Control FY05/09 FY05/10 FY05/10 FY05/10 FY05/10 FY05/11 FY05/11 FY05/11 FY05/11 (Million Yen) Q４ Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Cash Flow From Operations -669 -197 -173 380 1,756 -718 -523 -214 1,042 ■Net Income Before Tax 3,149 821 1,320 2,498 3,256 502 1,015 2,371 3,065 ■Net Increase (D
Slide 25: Company Profile: Titicaca
Company p y Profile: Titicaca © Village Vanguard corporation, All rights reserved. P.24
Slide 26: Outside Titicaca Stores
Outside Titicaca Stores Lake Town Lalaport Shin Shibuya store Misato store (Shibuya, Tokyo) store (Misato, Saitama) (Koshigara , Saitama) Early days Now Started as a folk art shop, p, with signs and store fixtures Warm, natural store interior, Image of a Mexican resort hand‐made by staff, in order e
Slide 27: Outside of New Stores
Outside of New Stores 3.7% difference in operating profit margin between stores in shopping malls with floor space of 100 sq/m and above, and those below 100 sq/m Focused on openings of larger and more profitable stores. Abeno Store 169 sq/m, Yamato Store 188 sq/m, Niihama Store 261 sq/m (Average ex
Slide 28: Inside Titicaca Store
Inside Titicaca Store Apparel Accessories Silver Accessories © Village Vanguard corporation, All rights reserved. P.27
Slide 29: Titicaca - Results
Titi Titicaca - Results R lt © Village Vanguard corporation, All rights reserved. P.28
Slide 30: Titicaca - Results
Titicaca - Results Income Statement: Met budget. FY05/11 sales 8.9% above plans, FY05/11 recurring profit 44.6% above plans. 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 Est. Q2
Slide 31: Titicaca - Results
Titicaca - Results Sales vs. Budget Achieved +8.9% vs. budget (+208 million yen) * All figures are against accumulated budget from the beginning of the term to Q4. Existing stores: +5.3% (+86 million yen) New stores: +15.3% (+89 million yen) Wholesale and FC sales: +23.3% (+32 million yen) Store typ
Slide 32: Titicaca - Results Store Openings
Titicaca - Results Comparable store sales Cumulative through Q4 +16.3% YoY FY03/12 Dedicated supervisor system established 150% 140% Achieving positive +30.3% YoY sales for 37 130% +28.5% consecutive months +24.8% +18.3% +20.1% 120% since Feb. 2008. +21.5% +15.4% +20.8% 110% +18.2% +11.9% +7.4% +7.8
Slide 33: Village Vanguard (Hong Kong) Limited Company Profile
Village Vanguard (Hong Kong) Limited Company Profile (Consolidated from FY05/11) © Village Vanguard corporation, All rights reserved. P.32
Slide 34: Inside Stores (VVHK)
Inside Stores (VVHK) © Village Vanguard corporation, All rights reserved. P.33
Slide 35: Village Vanguard Hong Kong - Results
Village Vanguard Hong Kong ‐ Results Q3 and d Q4 FY05/11 Versus V Plan Pl figures fi reflect fl t performance f vs. revised i d budgets. b d t FY05/11（Actual） FY05/12 （Forecast） （Million Yen） （Million Yen） Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Sales 36 59 90 118 Sales 32 62 103 132 Versus Plan（％） -29.6 -42.1 -0.3
Slide 36: Village Vanguard Webbed Limited
Village Vanguard Webbed Limited ( (Consolidated ) from FY05/11 Q4) © Village Vanguard corporation, All rights reserved. P.35
Slide 37: Online sales YoY
Online sales YoY (*based on customer orders) 350.0% [Target media] FY05/12 (Plan) ・PC websites Full year：+15.2％ ・Mobile websites 300.0% ・Rakuten：March 2009-July 2010 250.0% FY05/11 / ((Results) l ) Full year： -7.6％ 200.0% *Results include figures from when this was the Business department 150.0% 100
Slide 38: Results and estimates
Results and estimates (Million yen) FY05/11 FY05/12 Income Statement Actual Plan Q4 Q1 Q2 Q3 Q4 Sales 11 6 11.6 27 3 27.3 68 8 68.8 141 1 141.1 195 2 195.2 vs Plan (%) - - - - - YoY(%) - - - - 1685.2 Gross Profit 2.6 4.5 11.4 22.9 31.8 vs Plan (%) - - - - - YoY (%) - - - - 1246.0 SG&A 5.0 5.1 10.6 1
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 User A User B VV VV User C Customer お客様 Customer お客様 Five billion yen