Village Vanguard Co., Ltd. · TSE:2769

Village Vanguard — Q3 FY05/10 Earnings Presentation

31 slides from Village Vanguard's earnings presentation, 2010

  1. Slide 1: 3rd Quarter of FY05/10 Results Presentation

    表紙ＶＶ 3rd Quarter of FY05/10 Results Presentation

  2. 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

  3. Slide 3: P&L (Consolidated)

    P&L (Consolidated) （Million Yen） Income Statement FY05/09 FY05/10 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Est Sales 7,343 7,462 9,739 8,682 8,630 8,273 10,290 10,447 SG&A 2,270 2,723 2,798 2,831 2,799 2,879 3,069 3,380 Labor 995 1,094 1,150 1,198 1,248 1,246 1,327 1,491 Rent 632 650 833 752 753 732 88

  4. Slide 4: BS (Consolidated)

    BS (Consolidated) （Million Yen） Balance Sheet FY05/09 FY05/10 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Est Cash & Deposit 2,750 2,387 3,011 3,078 2,685 2,957 3,503 3,436 Inventories 11,340 13,711 13,881 14,131 15,003 15,928 15,315 16,384 Other 2,421 2,372 2,225 2,486 2,601 2,345 2,448 2,607 Current Ass

  5. Slide 5: CF (Consolidated)

    CF (Consolidated) （Million Yen） Cash Flow Statement FY05/09 FY05/10 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Est Operating Cash Flow -419 -533 -1,758 -735 -292 -146 298 1,133 Change in Inventories -412 -2,783 -2,953 -3,203 -872 -1,796 -1,183 -2,253 Other -6 2,250 1,194 2,467 579 1,650 1,481 3,386 Inves

  6. Slide 6: Village Vanguard Corporation K.K.

    Parent Company Village Vanguard Corporation K.K. © Village Vanguard Corporation, All rights reserved. 6

  7. Slide 7: What We Do

    What We Do ■Village Vanguard ■Diner Burger shop modeled after an American diner. ■new style ■QK ■Online For 30 year-olds with unique tastes. 「Exciting book store for kids」 Book, accessories, CDs – 2,500 items. Not only toys. ‘Kids Entertainment’ for kids. © Village Vanguard Corporation, All rights r

  8. Slide 8: Examples of Our Merchandising Approach (1)

    Examples of Our Merchandising Approach (1) Set for making BAR JAZZ CD cocktails “You are not going Compilation to invoke a bar home tonight, my atmosphere Darling!” ”Cocktail Book” “Rolling Coaster” ”To the Bar” Selection of 64 bars Pour someone a drink and roller-skate it to a person across Japan i

  9. Slide 9: Examples of Our Merchandising Approach (2)

    Examples of Our Merchandising Approach (2) © Village Vanguard Corporation, All rights reserved. 9

  10. Slide 10: How We Sell?

    How We Sell? We delegate both purchasing and sales decisions to the store level Marketing Store manager has the absolute discretion Purchasing Store Merchandising and Display We create sales spaces that answer unique customer needs store by store, in real time Store level ideas driving buying impuls

  11. Slide 11: Hiring Strategy

    Hiring Strategy Full Time Customer Temp Staff Employee  We hire people who really understand what we do  Even temporary staff are allowed to make purchasing decisions  Real On-the-Job training that spans years © Village Vanguard Corporation, All rights reserved. 11

  12. Slide 12: Store Openings (Parent)

    Store Openings (Parent) Nationwide 325 Figures: Directly Managed, Tohoku (Franchise Stores) The breakdown of DM stores Hokkaido DM 21 DM 300 does not include format conversions DM 16 FC 1 FC 2 Aomori VV 254 5 new style 26 Hokkaido Akita QK 10 Iwate 18（2） 4 5 Diner 10 ＦＣ 25 Yamagata Miyagi Hokuriku 6

  13. Slide 13: Parent Income Statement

    Parent Income Statement （Million Yen） Income Statement FY05/08 FY05/09 FY05/10 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Est Sales 6,118 5,929 7,714 7,098 7,096 7,144 9,438 8,397 8,271 7,827 9,888 9,893 Gross Profit 2,383 2,438 3,057 2,761 2,821 2,880 3,739 3,506 3,351 3,130 3,994 3,982 SG&A

  14. Slide 14: Comparable Store Sales

    Comparable Store Sales 10.0% 7.4% Comparable-Store (FY05/09) 8.0% Comparable-Store (FY05/10) 6.0% 4.6% 4.0% 3.1% 2.0% 1.0% 1.0% 0.3% 0.0% 0.0% -2.0% -1.3% -1.4% -4.0% -3.2% -3.4% -3.4% -4.0% -6.0% -4.5% -4.7% -4.2% -5.4% -6.1% -6.3% -8.0% -7.0% -7.6% -10.0% -9.8% -12.0% Feb-09 Feb-10 Dec-08 Dec-09 O

  15. Slide 15: Comparable Store Sales Analysis (New Comp Stores Impact)

    Comparable Store Sales Analysis (New Comp Stores Impact) 30.0% FY05/10 Keeping existing comp store 20.0% sales momentum flat in FY05/10 despite downward 10.0% pressure from new comp store sales. 0.0% -10.0% Poor new comp sales in 1H -20.0% FY05/10 : impacted by initial store opening promotions and -

  16. Slide 16: Comparable Store Sales (by Format)

    Comparable Store Sales (by Format) Sales by Format FY05/08 FY05/09 FY05/10 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Total 5,412 10,761 17,878 24,363 6,442 12,483 20,268 27,134 6,734 13,353 22,497 Comp Stores YoY 8.2% 8.1% 7.2% 6.4% 3.9% 2.5% 1.5% 0.2% -5.7% -6.5% -5.6% Village Vanguard 5,06

  17. Slide 17: Category Sales

    Category Sales （Million Yen） Sales by Category FY05/08 FY05/09 FY05/10 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 SPICE (Parent) 4,304 4,077 5,546 5,011 5,109 5,243 7,102 6,310 6,193 5,926 7,785 Books (Parent) 1,025 988 1,118 1,044 1,038 1,041 1,171 1,087 1,045 997 1,147 NM (Parent) 673 743 9

  18. Slide 18: Store Age Sales YoY

    Store Age Sales YoY Store Age Analysis 6+ 5 4 3 2 <1 (Directly Managed Stores) Number of Stores * 101 37 46 20 60 36 YoY Sales (%) -8.4% -0.4% -3.5% -2.5% -8.0% - （※1） excludes online and closed stores © Village Vanguard Corporation, All rights reserved. 18

  19. Slide 19: OP Analysis

    OP Analysis （Millions of yen） OP Impact from Other Sales (sales to FCs, subs) 2,800 Operating profit from new stores 54 million yen (<13 months in operation) 695 million yen 2,700 Decline in OP from Comps 2,600 -268 million yen 54 -200 （Main reasons for decline）: 2,500 Lower profitability of Comps :

  20. Slide 20: Store Openings (Incl. Titicaca Subsidiary)

    Store Openings (Incl. Titicaca Subsidiary) New Openings & Closures FY05/08Act FY05/09Act FY05/10CoE Full-Year Full-Year 1H 2H Full-Year Openings Village Vanguard 22 42 17 13 30 new style 3 8 1 0 1 QK 1 5 0 0 0 Diner 1 4 1 0 1 Titicaca - 12 7 9 16 Total New Openings 27 71 26 22 48 Closures Village Va

  21. Slide 21: Item Variation and Sales Growth

    Theme 1 Item Variation and Sales Growth Problem The variation in the number of items and store merchandising themes started increasing. However, this has not produced higher sales The near-sighted drive to improve efficiency and ■ HQ Sourcing Team’s Goods Shipped from the Logistics Center “sell more

  22. Slide 22: More Products from the Internal Sourcing Team

    Theme 2 More Products from the Internal Sourcing Team Move to a 2-team Internal Sourcing Team system (=“Internal Wholesalers”) ■ Move to a 2-team system for the internal sourcing department New from April 2010. Substantially increase department staffing. Org Chart Operational Policy: Internal Sourci

  23. Slide 23: Accelerating HR Development

    Theme 3 Accelerating HR Development Move to a system of specialized Area Managers 300 Stores 300 Stores Under Old System Under New System Area Managers are “Playing Coaches” Old System (About 5 stores per area including GM Block manager’s own) （1） Mgr. （3） Block Manager March 2010 Area Managers are

  24. Slide 24: Inventory Control

    Theme 4 Inventory Control FY05/08 FY05/08 FY05/09 FY05/09 FY05/09 FY05/09 FY05/10 FY05/10 FY05/10 (Millions of yen) Q1 Q2 Q4 Q2 Q3 Q4 Q1 Q2 Q3 Cash Flows From Operations 459 1,076 -393 -565 -1,694 -669 -197 -173 380 ■Net Income Before Tax 1,276 2,917 744 1,116 2,276 3,149 821 1,320 2,498 ■Net Increa

  25. Slide 25: © Village Vanguard Corporation, All rights reserved.

    © Village Vanguard Corporation, All rights reserved. 25

  26. Slide 26: Titicaca – Results

    Titicaca – Results Income Statement FY05/09 FY05/10 Income Statement (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Est Sales 251 322 306 299 361 474 416 526 Operating Profit 10 26 7 -7 23 55 -10 16 Recurring Profit 8 21 5 -9 20 50 -13 10 Net Profit 8 20 3 -40 18 48 -14 13 Sales YoY 43.8% 47.2% 35.9% 75.9% O

  27. Slide 27: Titicaca – Performance Report

    Titicaca – Performance Report 1) Sales 5% below the budget (66m yen miss) Comps -2.9%（-26m yen） New Stores -18.8% (-53m yen) Wholesale Sales +20.6％ （13m yen） Comps ⇒ New comp stores this period (9 stores) 7.4% below the plan (21m yen) New Stores ⇒ Notable negative impact of 33.8m yen from delays in

  28. Slide 28: Outside Titicaca Stores

    Outside Titicaca Stores Standalone Shop ‘In-Shop’ Shopping centers, railway stations Apparel Focused Store © Village Vanguard Corporation, All rights reserved. 28

  29. Slide 29: Inside Titicaca Stores

    Inside Titicaca Stores Dozens of alpacas, Titicaca stores’ signature item © Village Vanguard Corporation, All rights reserved. 29

  30. Slide 30: Company Profile

    Company Profile Village Vanguard (Hong Kong) Limited （Non Consolidated） © Village Vanguard Corporation, All rights reserved. 30

  31. Slide 31: TOPICS

    TOPICS ■ Stores: Dragon Center #1 opened on Nov. 28, 2009 at JUSCO Kornhill(148.5sq m) #2 opened on Dec. 15, 2009 at Dragon Center（237.6sq m） ■Business Directly managed Village Vanguard stores(same concept as in Japan) ■Situation Changing the store according to the needs of H.K. customers ■Future Pl

Village Vanguard — Q3 FY05/10 Earnings Presentation on 6ix