Vega Corporation Co., Ltd. · TSE:3542
Vega — Q1 FY2020 Earnings Presentation
42 slides from Vega's earnings presentation, August 2019
Slide 1: Quarterly Financial Results for the Three Months Ended June 30, 2019
Quarterly Financial Results for the Three Months Ended June 30, 2019 Vega corporation Co., Ltd. Copyright 2019 VEGA corporation. All Rights Reserved.
Slide 2: Financial Highlight
Financial Highlight Operating profit significantly improved from the previous 4Q ・Gross margin improved as a result of sales price and product lineup revisions ・Storage expenses declined due to adjustment of the amount of inventory Sales and sales ratio of the flagship store are growing smoothly ・Ef
Slide 3: Overview of Quarterly Financial Results
Overview of Quarterly Financial Results for the Three Months Ended June 30, 2019 2 Copyright 2019 VEGA corporation. All Rights Reserved.
Slide 4: Quarterly Sales
Quarterly Sales Net sales decreased by 1.5% YoY due to reduction of seasonal products Gross margin improved as a result of sales price and product lineup revisions Net sales 3,320 (Million yen) Net sales 4,000 Gross profit margin 60.0% 3,541 3,440 3,500 3,341 3,407 3,371 58.0% 3,198 3,029 2,969 56.2
Slide 5: Quarterly Operating Profit
Quarterly Operating Profit Improving profit through gross margin improvement and Operating profit (Million yen) reduction in fixed costs including storage expenses 250 207 200 187 144 150 100 71 50 22 7 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q (50) Improved (100) (95) (150) (129) (142) (200) FY2018 FY2019 FY202
Slide 6: Quarterly SG&A Expenses <Ratio>
Quarterly SG&A Expenses <Ratio> (R&D on a net basis) 2.9 1.9 2.6 1.8 （％） 2.1 2.1 1.7 2.8 2.5 1.9 1.7 2.8 1.1 2.4 2.6 11.8 12.5 14.7 12.6 2.7 2.7 2.7 10.4 10.5 9.7 9.5 9.8 12.5 11.5 11.1 11.6 10.2 8.9 9.7 9.9 10.0 24.4 24.7 23.9 22.8 26.5 27.0 27.8 27.5 27.6 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY2018 FY2019 F
Slide 7: Overview of Financial Results_Statement of income
Overview of Financial Results_Statement of income Gross margin improved as a result of sales price and product lineup revisions (Million yen) Three months Three months ended Sales ratio ended Sales ratio Change YoY June 30, 2018 June 30, 2019 Net sales 3,371 100.0％ 3,320 100.0％ (50) 98.5％ Gross prof
Slide 8: Overview of Financial Results_Balance Sheet
Overview of Financial Results_Balance Sheet Adjustment of inventory amount increased cash and deposits Inventory amount adjustments to continue in 2Q onward (Million yen) Three months Previous fiscal Three months Previous fiscal year ended ended (as of March 31, 2019) year June 30, 2019 (as of March
Slide 9: Report on LOWYA Business
Report on LOWYA Business 8 Copyright 2019 VEGA corporation. All Rights Reserved.
Slide 10: Net Sales by Sales Channel (LOWYA Businesses Overall)
Net Sales by Sales Channel ＜LOWYA Businesses Overall ＞ Sales are smoothly shifting to the flagship store Rakuten Amazon Yahoo Net sales by sales channel * Ratios shown below are YoY comparisons Flagship store Rakuten marketplace store: down 9.3% Flagship store: up 11.2% Amazon store: up 9.8% Yahoo s
Slide 11: Sales Ratio by Sales Channel (LOWYA Flagship store)
Flagship Sales Ratio by Sales Channel ＜LOWYA Businesses store ＞ Flagship store ratio increased Net sales from 22.7％ in the previous 1Q to 25.6％ Flagship store 25.6% (Million yen) Marketplace store Flagship store ratio 26.0% 24.0% 22.7% 21.5% 24.5% 3,000 19.4% 21.0% 16.0% 13.2% 12.2% 2,000 11.0% 6.3%
Slide 12: Net Sales (LOWYA Flagship store)
Flagship Net Sales ＜LOWYA Businesses store ＞ Curbed online advertising expenses, but net sales increased by 11.2% YoY Resumed active advertising investment from the last week of June as profit improvement was confirmed Net sales Aim for further growth in visitors from 2Q onward (Million yen) (Millio
Slide 13: Delivery Expense Ratio (LOWYA Businesses Overall)
Delivery Expense Ratio ＜LOWYA Businesses Overall ＞ Optimizing product inventory and reviewing packaging size to reduce the delivery expense ratio （％） 20 Packing and shipping costs ratio 17.9 17.6 17.1 16.3 16.1 14.8 15 14.0 13.9 13.5 13.3 12.8 12.5 12.2 10 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY20
Slide 14: Management Indicators (LOWYA Businesses Overall)
Management Indicators ＜LOWYA Businesses Overall ＞ The number of organic access to the flagship store remained as forecasted The overall number of visitors declined due to marketplace store conditions Fiscal year Fiscal year ended March 31, 2019 ending March 31, 2020 Item 1Q 2Q 3Q 4Q 1Q (Apr. –Jun.)
Slide 15: Management Indicators (LOWYA Flagship store)
Flagship Management Indicators ＜LOWYA Businesses store ＞ The number of visitors remained almost flat due to efficient online advertising Average customer spend and CVR increased as a result of sales price revisions, etc., and recovery from stock-out issue in the previous fiscal year, respectively Fi
Slide 16: Online Advertising Expenses (LOWYA Flagship store)
Flagship Online Advertising Expenses ＜LOWYA Businesses store ＞ Maintained the number of visitors while curbing online advertising expenses (Million people) 3.89 million UU 4.50 Online advertising expenses 3.93 million UU 4.00 Number of visitors 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 1Q 2Q 3Q 4Q 1Q
Slide 17: Initiatives in the First Quarter
Initiatives in the First Quarter (1) Initiatives toward improving profit (2) Initiatives toward increasing access to the flagship store and sales 16 Copyright 2019 VEGA corporation. All Rights Reserved.
Slide 18: Continue with 4 initiatives toward improving profit
Initiatives in the First Quarter ＜(1) Improving Profit＞ Continue with 4 initiatives toward “improving profit” (1) Reduce storage expenses Issues Progress ・Adjust amount of inventory ・Saved space at some warehouses by adjusting amount of inventory ・Consider introduction of facilities to ・Introduced f
Slide 19: Continue with 4 initiatives toward improving profit
Initiatives in the First Quarter ＜(1) Improving Profit＞ Continue with 4 initiatives toward “improving profit” (3) Improve cost of sales ratio Issues Progress ・Select and concentrate suppliers ・Conducting audit of supplier selection ・Reduce cost of sales via product process replacement (4) Review pro
Slide 20: Other initiatives that contributed to improving profit
Initiatives in the First Quarter ＜(1) Improving Profit＞ Other initiatives that contributed to “improving profit” Initiatives Effects on the previous 4Q Closing of some warehouses decreased Adjust amount of inventory storage expenses by 23,328 thousand yen Transportation expenses between Allocate pro
Slide 21: Bring users into frequent contact with LOWYA to expand new access
Initiatives in the First Quarter ＜ (2) New Access＞ Bring users into frequent contact with LOWYA in an effort to expand new access and enrich the user experience of comparing and examining products via AR services Attracting Customer Compare and examine Purchase User experience customers visit １ ３ Of
Slide 22: Opened a limited-time pop-up store at Isetan Shinjuku Store
Initiatives in the First Quarter ＜ (2) New Access＞ 1 Offline measures Opened a limited-time pop-up store at Isetan Shinjuku Store as an offline measure offering opportunities for “seeing, touching, and trying products” Offered an opportunity for hands-on experience with actual products as an effort
Slide 23: Utilize contents created by Instagram users
Initiatives in the First Quarter ＜ (2) New Access＞ 2 SNS Utilize contents created by Instagram users as part of social media enhancement intended to increase new access Users who viewed contents can easily imagine post-purchase life, and CVR rose after introduction Product page corresponding to the
Slide 24: Plan to release 360-degree full vision service
Initiatives in the First Quarter ＜ (2) New Access＞ 3 360-degree full vision Plan to release a service that enables users to check the entire room with a 360-degree view using highly accurate 3D models of furniture Under development * Objects in the images are all 3D models. Change the furniture purc
Slide 25: LOWYA AR helps users compare and examine products
Initiatives in the First Quarter ＜ (2) New Access＞ 4 LOWYA AR “LOWYA AR” helps users compare and examine products in online purchase Continue converting products to 3D to enhance the service The service has been well received by users on social media. Continue to create 3D models of products, aiming
Slide 26: New Businesses (R&D)
New Businesses (R&D) 25 Copyright 2019 VEGA corporation. All Rights Reserved.
Slide 27: Business
Business 26 Copyright 2019 VEGA corporation. All Rights Reserved.
Slide 28: DOKODEMO Business_Indicators
DOKODEMO Business_Indicators Membership and the number of APP DLs are growing smoothly Strengthen Customer Relationship Management (CRM) to further increase repeat customers 1Q ended 1Q ended Item June 30, 2018 June 30, 2019 YoY Membership (thousand people) 264 408 154.1％ Number of APP DLs (thousand
Slide 29: DOKODEMO Business_Distribution
DOKODEMO Business_Distribution Gross Merchandise Sales (GMS) increased by 2.5% YoY, while curbing advertising expenses (Million yen) Repeat customers GMS 250 New customers GMS Develop new categories to handle 200 Initiatives to increase repeat customers Discover dormant customer base 150 Enhance con
Slide 30: DOKODEMO Business_Enhancement of Measures
DOKODEMO Business_Enhancement of Measures Continued to strengthen the fashion category and started handling used products as the first for DOKODEMO Fashion category Reuse (second-hand brand items) ● Started handling from June 2019 Used products in Japan are good in condition and are much in demand f
Slide 31: Business
Business 30 Copyright 2019 VEGA corporation. All Rights Reserved.
Slide 32: Laig Business
Laig Business Continue expanding the number of products and contents to enhance service Laig style COORDINATE Laig style MAGAZINE Post a total of 95 ideas of interior coordination Introduce particular tastes, favorite spaces, etc. created by mixing multiple brands. of prominent persons active in var
Slide 33: Appendix
Appendix 32 Copyright 2019 VEGA corporation. All Rights Reserved.
Slide 34: LOWYA Business: Positioning
Appendix LOWYA Business: Positioning Establishing the fast interior category in the “trendy & low price” space of the furniture and interior products market High price High-class High-class overseas antique High-quality furniture furniture standard Traditional Select fashionable furniture furniture
Slide 35: LOWYA Business: Service Vision
Appendix LOWYA Business: Service Vision As a provider of “fast interior,” Offer “memorable experiences” that go beyond value expected by customers Fulfill satisfaction and inspiration by creating design that reflects a variety of tastes and trends. 34 Copyright 2019 VEGA corporation. All Rights Rese
Slide 36: Business Model Characteristics
Appendix Business Model Characteristics D2C business model conducting the entire procedure inhouse （Direct to Consumer） Product Online Marketing Development Import Warehouse sales (Attracting customers) Delivery CS Customers Views Designing, buying Manufacturing by Style coordination Page content pl
Slide 37: LOWYA Business, Customer Data
Appendix LOWYA Business, Customer Data (Male Vs. Female, Area Distribution, and Generation Distribution) Showing higher ratio of female in their 30’s, mainly in the Tokyo metropolitan area （April 2019 to June 2019) Ratio of male Area distribution Age distribution vs. female ■ Kanto 37.9 ％ ■ 29 and 1
Slide 38: DOKODEMO Business_Proportion of Deliveries by Country
Appendix DOKODEMO Business_Proportion of Deliveries by Country based on GMS Proportion of deliveries by country based on the GMS ratio is widely distributed centering on Asia Canada Proportion of deliveries by China 5.0％ country 3.2％ South Korea Latin Middle East Hong Kong 4.3％ US America 0.9％ Europ
Slide 39: DOKODEMO Business (Sales Ratio by User Data and Category)
Appendix: DOKODEMO Business (Sales Ratio by User Data and Category) Female users in their 30’s are increasing. DOKODEMO will strengthen the “hobby” and “fashion” categories going forward Calculation period: April to June 2019 <User data> <User data> Sales ratio by Gender Age category Food & Alcohol
Slide 40: Laig Business: Service Vision
Appendix Laig Business: Ser vice Vision SERVICE VISION A world that offers various ways in which “Lifestyle is Good” (Lifestyle space) The concept of Laig is “Lifestyle is good” Create more “Lifestyle is good” by offering inspiration on lifestyle spaces to each user through the various products and
Slide 41: Synergy of Company-wide Businesses
Appendix Synergy of Company-wide Businesses Develop each system in LOWYA fulfillment service to new business and aim for its maximization ＜Past performance＞ *Experience in global marketing B to B to C (57 million DLs for game apps) Warehouse Marketing sharing EC (Attracting customers) Delivery CS Ma
Slide 42: Views and forecasts in this document were prepared based on the judgment of the
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 could cause actual outcomes to differ materiall