Vega Corporation Co., Ltd. · TSE:3542

Vega — FY2019 Earnings Presentation

48 slides from Vega's earnings presentation, 2019

  1. Slide 1: Full-year Financial Results for the Fiscal Year Ended March 31, 2019

    Full-year Financial Results for the Fiscal Year Ended March 31, 2019 Vega corporation Co., Ltd.

  2. Slide 2: Agenda

    Agenda 1. Overview of Financial Results for the Fiscal Year Ended March 31, 2019 2. Report on LOWYA Business 3. Future Development 4. New Businesses (R&D) 5. Financial Results Forecast 6. Appendix 1 Copyright 2019 VEGA corporation. All Rights Reserved.

  3. Slide 3: Summary of the Fiscal Year Ended March 31, 2019

    Summary of the Fiscal Year Ended March 31, 2019 Overview of Net sales: 13,322 million yen (up 2.7% YoY) Financial Results Operating loss: (296) million yen (561 million yen in operating profit in the previous fiscal year) LOWYA flagship store performance grew by 83.4% YoY ・Released LOWYA AR, a servi

  4. Slide 4: 1. Overview of Financial Results for the Fiscal Year Ended March 31, 2019

    1. Overview of Financial Results for the Fiscal Year Ended March 31, 2019 3 Copyright 2019 VEGA corporation. All Rights Reserved.

  5. Slide 5: Overview of Financial Results

    Overview of Financial Results (Million yen) Fiscal year ended Fiscal year ended YoY March 31, 2018 March 31, 2019 Net sales 12,977 13,322 102.7% Operating profit 561 (296) ー Ordinary profit 589 (256) ー Profit 338 (240) ー (*) Audit procedures pursuant to the Financial Instruments and Exchange Act are

  6. Slide 6: 1. Sales

    1. Sales Focused on brand development and website enhancement throughout the year, aiming to strengthen the LOWYA flagship store business Net sales increased by 2.7 ％ YoY, despite passing on costs to cope with rising logistics expenses and opportunity loss due to product shortages 13,322 (Million ye

  7. Slide 7: 1. Operating Profit

    1. Operating Profit Delivery expenses and storage expenses increased, putting pressure on operating profit (Million yen) (Yen) 120.1 R&D expenses 120 1,300 111.5 110.3 109.2 109.7 Operating profit 100.2 1,100 Exchange rate 100 85.7 263 900 82.9 79.1 80 700 消費税増税 346 4 124 500 60 828 300 648 575 150

  8. Slide 8: 1. SG&A Expenses <YoY comparison>

    1. SG&A Expenses <YoY comparison> (R&D on a net basis) Of SG&A expenses, logistics expenses increased by 4.5pts YoY 2.4 (%) 2.4 1.9 Advertising expenses ＋0.5pt 2.7 12.4 R&D expenses -0.3pt 9.9 Fixed costs (*1) ＋2.5pt 11.3 9.6 Personnel expenses +1.7pt Selling expenses (*1) ＋3.3pt (*1) Of these costs

  9. Slide 9: 1. SG&A Expenses <Quarterly Ratio>

    1. SG&A Expenses <Quarterly Ratio> (R&D on a net basis) 2.6 2.9 1.9 (%) 2.1 2.1 1.7 2.8 2.5 1.1 1.7 2.8 2.4 2.6 11.8 12.5 14.7 2.7 2.7 2.7 10.4 10.5 9.7 9.5 9.8 12.5 11.5 11.1 10.2 8.9 9.7 9.9 10.0 26.5 27.0 27.8 27.5 24.4 24.7 23.9 22.8 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2018 FY2019 Advertising expenses R&D

  10. Slide 10: 1. Balance Sheet

    1. Balance Sheet (Million yen) Fiscal year ended Fiscal year ended Previous fiscal year Previous fiscal year (as of March 31, 2018) March 31, 2019 (as of March 31, 2018) March 31, 2019 (as of March 31, 2019) (as of March 31, 2019) Current Current assets 5,309 4,935 liabilities 2,107 2,410 Cash and d

  11. Slide 11: Status of Cash Flows

    Status of Cash Flows (Million yen) Fiscal year Fiscal year ended ended Main factors for the Change March 31, March 31, fiscal year ended March 31, 2019 2018 2019 Cash flows from operating activities 537 (574) (1,112) Profit before income taxes (317) Purchase of property, plant and equipment and inta

  12. Slide 12: 2. Report on LOWYA Business

    2. Report on LOWYA Business 11 Copyright 2019 VEGA corporation. All Rights Reserved.

  13. Slide 13: 2-1. Report on LOWYA Business <Overall>

    2-1. Report on LOWYA Business <Overall> 12 Copyright 2019 VEGA corporation. All Rights Reserved.

  14. Slide 14: 2-1. Quarterly Report <LOWYA Business Overall>

    2-1. Quarterly Report <LOWYA Business Overall ＞ Adjusted product prices to cope with rising logistics costs and managed to reduce cost of sales ratio, but both sales and profits fell short of forecast (Million yen) Fiscal year Fiscal year ended ended Sales ratio Sales ratio Change YoY March 31, Marc

  15. Slide 15: 2-1. Delivery Expense Ratio <LOWYA Businesses Overall>

    2-1. Delivery Expense Ratio ＜LOWYA Businesses Overall ＞ It became necessary to rebuild Logistics networks due to the withdrawal of some delivery companies from handling larger products Ongoing efforts include packing improvements to reduce the delivery expense ratio under continued growth in e-comme

  16. Slide 16: 2-1. Management Indicators <LOWYA Businesses Overall>

    2-1. Management Indicators ＜LOWYA Businesses Overall ＞ Fiscal year ended March 31, 2018 Fiscal year ended March 31, 2019 Item 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q (Apr. –Jun.) (Jul. –Sep.) (Oct. –Dec.) (Jan. –Mar.) (Apr. –Jun.) (Jul. –Sep.) (Oct. –Dec.) (Jan. –Mar.) YoY increase in the number of visitors(%) 127.

  17. Slide 17: 2-1. Net Sales by Sales Channel at Marketplace

    2-1. Net Sales by Sales Channel at Marketplace ＜LOWYA Businesses Overall ＞ With ongoing sales price revisions, sales at marketplace stores are recovering to a normal level Rakuten Amazon Net sales by sales channel * Ratios shown below are YoY comparisons Yahoo Flagship store Rakuten marketplace stor

  18. Slide 18: 2-2. Report on LOWYA Businesses <Flagship Store>

    2-2. Report on LOWYA Businesses <Flagship Store> 17 Copyright 2019 VEGA corporation. All Rights Reserved.

  19. Slide 19: 2-2. Management Indicators <Flagship Store>

    Flagship 2-2. Management Indicators ＜LOWYA Businesses store ＞ The flagship store significantly reduced its online advertising expenses, and effectively increased the number of visitors with a growth rate of 11.0% YoY Fiscal year ended March 31, 2018 Fiscal year ended March 31, 2019 Item 1Q 2Q 3Q 4Q

  20. Slide 20: 2-2. Net Sales <Flagship Store>

    Flagship 2-2. Net Sales ＜LOWYA Businesses store ＞ Cut online advertising expenses in view of rising logistics costs Visitor growth rate was lower than FY2018, but sales at the flagship store increased by 27.4％ YoY due to various measures, etc. Net sales (Million people) (Million yen) 1000 4.09 milli

  21. Slide 21: 2-2. Sales Ratio by Sales Channel <Flagship Store>

    Flagship 2-2. Sales Ratio by Sales Channel ＜LOWYA Businesses store ＞ Flagship store ratio increased from 19.4％ in the previous 4Q to 24.5％ Net sales (Million yen) Approx. 1.2 24.5％ times 25.0% Flagship store Marketplace stores 21.5% 24.0% 3,000 Flagship store ratio 22.7% 20.0% 19.4% 13.2% 15.0% 2,00

  22. Slide 22: 2-2. Measures_Released LOWYA AR

    2-2. Measures_Released LOWYA AR Offer a new shopping experience that eliminates customer pre-purchase anxiety Released an AR-based 3D simulation service CVR of products subject to AR service increased after introduction LOWYA AR can be activated by pressing the “3D virtual placement” button shown on

  23. Slide 23: 3. Future Development

    3. Future Development (1) Initiatives toward improving profit (2) Initiatives toward increasing access to the flagship store and sales 22 Copyright 2019 VEGA corporation. All Rights Reserved.

  24. Slide 24: 3. Future Development <(1) Improving Profit>

    3. Future Development ＜(1) Improving Profit＞ Review supply chain management (SCM) system via 4 initiatives toward “improving profit” Solidify our footing to expand scale for the next year (1) Reduce storage expenses (2) Reduce delivery expenses ・Introduce warehouse management system ・Optimize produc

  25. Slide 25: 3. Future Development <(2) New Access>

    3. Future Development ＜(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 Offline 360-de

  26. Slide 26: 3. Future Development <(2) New Access>

    3. Future Development ＜(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 purchase experie

  27. Slide 27: 3. Expand Recognition

    3. Expand Recognition Prove correlation between recognition and sales through test marketing Aim to enhance recognition in the Tokyo metropolitan area (％) 100 Brand building period Recognition in Tokyo metropolitan area National recognition 0 FY2018 FY2019 FY2020 FY2021 * According to an online surv

  28. Slide 28: 3. Future Development_LOWYA Business

    3. Future Development_LOWYA Business Recognition in Tokyo 100.0 Low High metropolitan area Solidify footing toward improving profit Brand recognition and scale expansion Billion yen (Billion yen) ● Solidify fan base ● Creative integration ● Social media branding Flagship store Marketplace stores Inv

  29. Slide 29: 4-1. Business

    4-1. Business 28 Copyright 2019 VEGA corporation. All Rights Reserved.

  30. Slide 30: 4-1. DOKODEMO Business_Indicators

    4-1. DOKODEMO Business_Indicators Membership and the number of APP DLs are growing smoothly Strengthen Customer Relationship Management (CRM) to further increase repeat customers Fiscal year ended Fiscal year ended Item March 31, 2018 March 31, 2019 YoY results results Membership (thousand people) 2

  31. Slide 31: 4-1. DOKODEMO Business_Distribution

    4-1. DOKODEMO Business_Distribution Annual Gross Merchandise Sales (GMS) increased by 43.0% YoY with steady increase in repeat customers Monthly GMS of 100 million yen coming into sight (Million yen) 250 Repeat customers GMS New customers GMS 200 150 100 50 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY20

  32. Slide 32: 4-1. DOKODEMO Business_Future Initiatives

    4-1. DOKODEMO Business_Future Initiatives Strengthen Online to Offline (O2O) measures and expand transactions, anticipating a peak in inbound tourist demand ahead of the Tokyo Olympics Enhance O2O measures 1 Purchase products at 2 Attract customers to 3 Access to DOKODEMO offline stores when visitin

  33. Slide 33: 4-1. DOKODEMO Business_Future Initiatives

    4-1. DOKODEMO Business_ Future Initiatives Enhance “fashion” and “make-up” categories to improve profit efficiency Strengthen the fashion category Strengthen the make-up category Expand the lineup of Japanese fashion Introduce Japanese make-up know-how using brands, from high-end to low-end videos t

  34. Slide 34: 4-2. Business

    4-2. Business 33 Copyright 2019 VEGA corporation. All Rights Reserved.

  35. Slide 35: 4-2. Laig Business

    4-2. Laig Business Make system renovation to support tenants’ services, aiming to further increase transactions Systems that Attracting customers can accept orders Product lineup Centralized inventory management Ease of shopping 34 Copyright 2019 VEGA corporation. All Rights Reserved.

  36. Slide 36: 4-2. Laig Business_Future Development

    4-2. Laig Business _Future Development Maximize Gross Merchandise Sales (GMS) by increasing the number of brands and products (GMS: Million yen) (Number of brands) Gross Merchandise Sales (GMS) Number of brands Number of products Service launched on October 31 500 Number of products: Approx. 2,500 1

  37. Slide 37: 5. Financial Results Forecast

    5. Financial Results Forecast 36 Copyright 2019 VEGA corporation. All Rights Reserved.

  38. Slide 38: 5. Financial Results Forecast for the Fiscal Year Ending March 31, 2020

    5. Financial Results Forecast for the Fiscal Year Ending March 31, 2020 Toward maximizing the “LOWYA” brand, redesign our infrastructure, including logistics reform and service improvement, to strengthen the fulfillment service structure (Million yen) Fiscal year ended Fiscal Year Ending March 31, 2

  39. Slide 39: Appendix

    Appendix 38 Copyright 2019 VEGA corporation. All Rights Reserved.

  40. Slide 40: 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

  41. Slide 41: 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. 40 Copyright 2019 VEGA corporation. All Rights Rese

  42. Slide 42: 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

  43. Slide 43: 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 2018 to March 2019) Ratio of male Area distribution Age distribution vs. female ■ Kanto 38.0 % ■ 29 and

  44. Slide 44: DOKODEMO Business_Proportion of Deliveries by Country based on GMS

    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 5.7% country 4.9% South Korea Hong Kong 3.6% US Middle East 1.0% Latin America 1.0%

  45. Slide 45: 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 2018 to March 2019 <User data> <User data> Sales ratio by Gender Age category Food & Al

  46. Slide 46: 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

  47. Slide 47: 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

  48. Slide 48: 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

Vega — FY2019 Earnings Presentation on 6ix