Slide 1: Presentation Material FY 2022 3Q
PRESENTATION MATERIAL FY 2022 3Q 2023.1.13
Slide 2: 目次
目 次 1. Summary 4. Result 2. Our Business ① P&L ① Vision, Mission and Policy (1) GMV ② LOCONDO’s seven initiatives for SDGs (2) Sales ③ Business model (1) LOCONDO’s “ecosystem” that consists of the 3 (3) SG&A businesses (4) Operating profit (2) Sales accumulation model ② B/S (3) Break-even point Mode
Slide 3: 1. Summary
1. SUMMARY • GMV grew to 17.1bn JPY (growth: +9.6%, vs annual plan: 67.0%), and Operating profit grew to 0.8bn JPY (growth: +10.6%, vs annual plan: 78.6% - 87.3%). • GMV grew +9.6% supported by the steady growth at EC business and the strong growth at Platform business. The growth is also supported
Slide 4: Our Business
Our Business 4
Slide 5: Vision, Mission and Policy
2. Our Business ①Vision, Mission and Policy VISION BE THE ONLY Breaking stereotypes and bring “ONLY LOCONDO CAN DO” MISSION Bring “Revolution” to the industry, and “flexibility” to clients Resolve the voices in shoes/fashion industry, and bring flexible/happy experience to clients. POLICY Fast, Fait
Slide 6: LOCONDO's seven initiatives for SDGs (1/2)
2. Our Business ②LOCONDO’s seven initiatives for SDGs (1/2) ① Think of energy ⚫ Using LED at warehouse ⚫ Implemented Big Ass Fans at all floors ⚫ Control air conditioner at 28℃, and heater at 20℃ ② Think of recycle ⚫ Using recycled plastics for palette at the warehouse ⚫ Providing eco-leather (made
Slide 7: LOCONDO's seven initiatives for SDGs (2/2)
2. Our Business ② LOCONDO’s seven initiatives for SDGs (2/2) ⑤ Gives back ⚫ Providing open space for Yachiyo citizens ⚫ Build new bus lane together with Yachiyo city and bus company. Providing a rest area for the drivers ⑥ Equality and diversification ⚫ Fair evaluation system with 50 competencies ⚫
Slide 8: Ecosystem that consists of the 3 businesses
2. Our Business ③Business model (1) “ecosystem” that consists of the 3 businesses LOCONDO has 3 businesses connected complementary and the ecosystem creates our own competitiveness. Contents Sharing inventories: Sell Contents • High recognition offline inventories at EC • Omni store IT & logistic as
Slide 9: EC MALL
EC PF 【EC MALL 】 Brand LOCONDO has own EC mall （LOCONDO, FASHION WALKER, SWS and waja）and stores in other companies’ EC mall such as Rakuten and Yahoo! Promote business expansion by “increase in number of members” through effective web advertising operations and “increase in the product lineup" incl
Slide 10: EC mall age distribution
【EC mall】Age distribution Realized the balanced portfolio by adding Fashion Walker. Membership basis 1,600 thousand 1,400 1,200 1,000 800 600 400 200 0 -20 20s 30s 40s 50s 60s LOCONDO FASHION WALKER SWS waja TTL 10 (Note) Member with an effective birthday data from our own mall
Slide 11: PLATFORM
EC PF 【PLATFORM】 Brand Providing various systems and services that enable centralization of inventories and integration of digital information through DX（Digital Transformation） Promoting "ALL-IN-ONE Package" implementing all the services below and bring perfect omni strategy. BOEM (Official EC) e-3
Slide 12: BRAND
EC PF 【BRAND】 Brand There are two major brand businesses, the “brand management business", which is mainly developed as an exclusive agency or as the licencee for overseas brands, and the "D2C (Direct To Consumer) brand development business," which is developed in-house in collaboration with influen
Slide 13: Sales accumulation model
2. Our Business ③Business model (2) sales accumulation model A model that builds up sales through the cycle below. New buyers → repeat customers → expansion of active user base → enhancement of product lineup → increase in new visitors More visitors from search engine(SEO) Approx. 40% * of new custo
Slide 14: Profit structure – Break-even point model
2. Our Business ③Business model (3)profit structure – Break-even point Model- A business model in which the operating profit on sales improves once sales exceeds the break- even point. (1) GMV, (2) Marginal profit ratio (= gross margin ratio – variable cost ratio) and (3) Fixed costs are Key Perform
Slide 15: MTB and LTV
MTB and LTV 15
Slide 16: Overview of the Mid-term business plan
3. MTB and LTV ①Overview of the Mid-term business plan (MTB) • We will take over Reebok Japan business as one of the core brand to LOCONDO business. We started to manage the Reebok operation from Oct 1st 2022 under the newly established joint-venture company between LOCONDO (66%) and ITOCHU Corporat
Slide 17: EC ratio in the fashion market
3. MTB and LTV ②EC ratio in the fashion market The current EC ratio in the domestic fashion market is about 19%. It is expected to increase to approx. 40% in 2030, where the EC market size will be approx. 3.5 trillion JPY. EC ratio 2030 fashion EC market size * Clothing, shoes, bags (expected) 2020
Slide 18: GMV targets
3. MTB and LTV ③GMV ✓ Get 3% of the market share in the 3.5 trillion JPY market; 100 billion JPY (USD approx. 1bn) ✓ We will increase our GMV to JPY 40 Bn in three years through (a) organic growth by aggressive investment, (b) Reebok business, and (c) additional M&A (EC or D2C brands) GMV : JPY Oku,
Slide 19: GMV by business FY2021 to FY2030
3. MTB and LTV ③GMV (unit; JPY 100MM) FY 2021* FY 2030 (rough number) Reebok • Brand’s GMV at EC handled only by New M&A – no.8 LOCONDO Inc (Non- (50) consolidated) is Brand New M&A – no.7 counted under Brand (50) New M&A – no.6 (50) • Reebok business will New M&A – no.5 be handled by RBKJ LOCONDO L
Slide 20: GMV growth drivers by mall
3. MTB and LTV ③GMV (unit: JPY 100MM) 2021 2030 CAGR key growth drivers (Actual*) (rough) Utilize the ecosystem to strengthen the lineup of items. Organic LOCONDO 12 36 + 13％ growth through aggressive promotion. Reebok will be the additional driver Standardizing the lineup of items and inventory wit
Slide 21: Forecast for fixed cost
3. MTB and LTV ④fixed cost The new warehouse will be fully operational from June 2022, and no further expansion is expected for at least five years thereafter. Other costs are planned to increase gradually along with GMV Includes; 60 [Rent] LOCOPORT III Start renting all floors (100,000 m2) [Others]
Slide 22: Operating profit and aggressive investment
3. MTB and LTV ⑤operating profit and Aggressive investment We will invest into aggressive promotion controlling minimum ROE level at 10% (ROE in FY21 : 13.3%) when demand & supply situation is good. When we think the situation is not good or we need more cash for additional M&A, we will maximize our
Slide 23: Results
RESULTS 23
Slide 24: Result P&L
4. Result ①P&L (unit; JPY 100MM) GMV increased by 9.6% YoY mainly by healthy growth of EC business, the strong growth at PF business, and the initiation of Reebok business. Gross profit ratio declined due to the accounting standard change, but we could achieve +10.6% growth at Operating Profit by co
Slide 25: P&L (1) GMV
4. Result ①P&L (1) GMV（unit; JPY 100） We maintained the GMV at our own E-malls through the steady growth at LOCONDO.jp, M&A of SWS and waja although D2C decreased significantly because of the demand cycle. At the same time, Platform business increased significantly mainly due to Reebok business, BOE
Slide 26: P&L (2) Revenue
4. Result ①P&L (2)Revenue（unit; JPY MM) Revenue increased by 8.6% (increased 11.3% before the accounting standard change). Although the increase of contract-type product handling as well as the accounting standard change brought the decline at the revenue, Reebok business supported the revenue growt
Slide 27: P&L (3) SG&A
4. Result ①P&L (3)SG&A (unit; JPY MM) Although the rent for the new warehouse increased (as planned,) we could improve the SG&A ratio by 2.1% through controlling costs such as optimization of ads and logistics as well as reduction of fees. The change of accounting standards also supports the improve
Slide 28: P&L (4) Operating Profit
4. Result ①P&L (4)Operating Profit (unit; JPY MM) Operating profit increased by JPY 75MM to 378MM although warehouse costs increased by JPY 149MM 504 485 378 350 319 303 303 173 145 100 105 87 57 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 1Q 2Q 3Q
Slide 29: YoY comparative analysis of operating income
4. Result ①P&L (4) YoY comparative analysis of operating income (Unit: JPY MM) Although the rent for the new warehouse and Reebok stores increased, operating profit increased by + 10.6% mainly due to GMV growth, cost reduction such as at ads, and the tax reduction due to the capital reduction + 39 ＋
Slide 30: Result B/S
4. Result ②B/S (unit; JPY MM) Debt-free management, financial soundness with equity ratio at 58%. Established RBKJ corporation (subsidiary handling Reebok business) on June 2nd and started the business on Oct 1st. Current Assets 7,487 Current Liabilities 3,333 Deposits received Cash and cash equival
Slide 31: EC mall: number of active users
4. Result ③Each business (1) EC mall : number of active users (unit; K) Due to the demand cycle of D2C, the total number slightly decreased Other E-malls 322 348 359 346 349 356 339 296 287 283 300 306 297 291 265 249 231 220 213 740 783 833 792 788 809 829 812 796 Our own E-malls 691 536 578 605 62
Slide 32: EC mall: Average shipping price
4. Result ③Each business (1) EC mall : Average shipping price (Shipping basis) Our own E-malls increased by + 8% and other E-malls increased by+ 11% The price basically stays in a reasonable range. 12,638 11,731 11,914 11,720 11,406 10,853 10,074 10,614 10,907 10,870 10,935 10,776 10,736 10,355 10,5
Slide 33: EC mall: Return rate
4. Result ③Each business (1) EC mall : Return rate Return rate of our own E-malls have been steady at around 20%. 30% 29% 29% 27% 27% 27% 26% 26% 26% 25% 25% 25% 22% 22% 22% Our own E-malls 21% 20% 20% 20% 20% 19% 18% 18% Excluding D2C 8% 8% 8% 7% 7% 7% 7% 7% 7% 7% 7% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 5
Slide 34: EC mall: Number of brands
4. Result ③Each business (1) EC mall : Number of brands The number of brands excluding waja is 3,344. The number of brands including waja is 4,661 4,849 4,661 4,644 4,182 3,969 3,838 3,676 3,632 3,426 3,344 2,972 3,506 2,648 2,458 2,473 2,546 2,327 2,365 2,193 2,097 2,126 2,167 2018 2018 2018 2018 2
Slide 35: Platform: e-3PL shipment quantity
4. Result ③Each business (2) Platform : e-3PL shipment quantity (10K units) e-3PL shipments increased steadily by +8%. Our goal is to become “Hub of warehouse” in the shoe industry. 91 92 85 + 8% 81 71 66 61 63 63 59 56 52 46 44 45 39 37 36 13 2018 2Q 3Q 4Q 2019 2Q 3Q 4Q 2020 2Q 3Q 4Q 2021 2Q 3Q 4Q
Slide 36: Message – Path to the LTV
Message– Path to the LTV– (FY2022 3Q Updated) • We have done TV commercial on October 2022, and recognized that TV commercial is not the effective approach to increase our revenue. Although it was effective in 2018 which brought a huge success in revenue, market recognition of LOCONDO is higher than
Slide 37: Disclaimer
Disclaimer • This document contains forward-looking statements that are based on current plans, estimates, forecasts or projections by LOCONDO Inc. as well as LOCONDO Inc.’s business and industry trends. • These forward-looking statements are subject to various risks and uncertainties. • Known or un