Vega Corporation Co., Ltd. · TSE:3542
Vega — Q1 FY2023 Earnings Presentation
37 slides from Vega's earnings presentation, August 2022
Slide 1: Quarterly Financial Results for the Three Months Ended June 30, 2022
For the Three Months Ended June 30, 2022 Quarterly Financial Results Vega corporation Co., Ltd. / Securities code: 3542
Slide 2: Agenda
1 Business Description Overview of Quarterly Financial Results 2 for the Three Months Ended June 30, 2022 3 Report on LOWYA Business 4 Report on DOKODEMO Business 5 Appendix Copyright 2022 VEGA corporation. All Rights Reserved. 2
Slide 3: Business Description
1 Business Description Copyright 2022 VEGA corporation. All Rights Reserved. 3
Slide 4: LOWYA Business Model
LOWYA Business Business Model In addition to offering private brand (PB) products at the flagship store (the Company’s e-commerce website) and other e-commerce marketplace stores, products of other companies’ brands are offered at the flagship store The Company Flagship store Users Manufacturing The
Slide 5: DOKODEMO Business Model
DOKODEMO Business Business Model Operate a cross-border e-commerce platform with all functions including settlement, logistics and CS, which enables seller companies to offer Japanese products to overseas users Japan Overseas Seller T he Company Users companies Orders Displayed in 5 languages, with
Slide 6: Difference in Sales Recognition Methods
Difference in Sales Recognition Methods LOWYA business is a D2C business of furniture and interior sundries* DOKODEMO business is a cross-border e-commerce platform business that has a model that earns commissions according to the value of merchandise sold GMV Promotion Gross Net Sales Merchandise E
Slide 7: Overview of Quarterly Financial Results for the Three Months Ended June 30, 2022
2 Overview of Quarterly Financial Results for the Three Months Ended June 30, 2022 Copyright 2022 VEGA corporation. All Rights Reserved. 7
Slide 8: Financial Highlight
Financial Highlight Steady progress was made in increasing members, raising the repeat rate and other efforts to achieve growth, despite demand in the LOWYA business experiencing a reactionary decline due to an increase in outings. DOKODEMO business results rose 210.4% YoY for a major expansion in t
Slide 9: Financial Results for the Three Months Ended June 30, 2022
Financial Results for the Three Months Ended June 30, 2022 Net sales: 4,200 million yen, Operating profit: 62 million yen (Million yen) Fiscal year ended Fiscal year ending Mar. 31, 2022 Mar. 31, 2023 YoY 1Q results Sales ratio 1Q results Sales ratio Net sales 4,514 100.0% 4,200 100.0% 93.0% (-314)
Slide 10: Quarterly Net Sales and Operating Profit
Quarterly Net Sales and Operating Profit Sales and profit both progressed within the range initially anticipated in the full-year financial results forecast, despite a reactionary decline from the previous year’s levels. (Million yen) Net sales (left) Operating profit (right) 8,000 748 800 6,000 600
Slide 11: Quarterly SG&A Expenses Ratio
Quarterly SG&A Expenses Ratio (against Net Sales) Overall, the SG&A expenses ratio fell year on year, contributing to profit control. (%) 54.4 54.2 55.3 52.2 51.9 Advertising expenses 1.9 2.6 51.0 51.5 50.5 3.4 48.7 48.1 49.8 48.6 3.4 5.3 Fixed costs 5.0 4.9 4.0 12.9 13.0 43.0 4.7 5.4 4.1 12.2 4.9 1
Slide 12: Balance Sheet
Balance Sheet Inventory has begun to decrease, and there are no concerns about financial soundness. (Million yen) Current fiscal year Current fiscal year Previous fiscal year Previous fiscal year 1Q 1Q (as of Mar. 31, 2022) (as of Mar. 31, 2022) (as of June 30, 2022) (as of June 30, 2022) Current as
Slide 13: Report on LOWYA Business
3 Report on LOWYA Business Copyright 2022 VEGA corporation. All Rights Reserved. 13
Slide 14: Management Indicators
LOWYA Business Management Indicators Membership of the flagship store has grown steadily, and the ratio of sales to repeat customers has increased solidly, but GMV fell short of last year’s levels. (Million yen) Timeframe used Three months ended Three months ended Scope Item YoY for calculation June
Slide 15: Quarterly GMV and Net Sales
LOWYA Business Quarterly GMV and Net Sales We fell short of the previous year’s 1Q results, which were a high hurdle with the impact of the declaration of a state of emergency, as a result of suppressing of large sales events at the flagship store, in addition to the impact of a decline in stay-at-h
Slide 16: Quarterly GMV by Sales Channel
LOWYA Business Quarterly GMV by Sales Channel The flagship store accounted for approximately half of quarterly GMV, down slightly from the previous year due to a strong overall performance from marketplace stores, in addition to the suppression of large sales events at the flagship store. (Million y
Slide 17: Monthly GMV at Flagship Store
LOWYA Business Monthly GMV at Flagship Store With economic activity beginning to normalize and turnouts increasing, GMV for April increased year on year. There was a reactionary decline in May and June, in addition to our decision to suppress discounts at large sales events in June, prioritizing pro
Slide 18: Company-wide Monthly GMV
LOWYA Business Company-wide Monthly GMV 1Q for the overall LOWYA business (flagship store + marketplace stores) was generally within the forecast range, despite the impact of a decline in stay-at-home resulting from an increase in outings. (Million yen) FY2021 FY2022 YoY 2,500 2,000 1,917 1,756 1,57
Slide 19: Cost of Sales Ratio and Delivery Expense Ratio
LOWYA Business Cost of Sales Ratio and Delivery Expense Ratio (vs. GMV) Cost of sales ratio increased due to a combination of persistently high costs for marine container transportation and raw material procurement, coupled with the rapid depreciation of the yen. The delivery expense ratio was kept
Slide 20: KPI of the Flagship Store (Membership)
LOWYA Business KPI of the Flagship Store (Membership) Total membership* of the flagship store has topped 1.19 million people, and is continuing to rise steadily Total membership of the flagship store （People） 1,190,171 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
Slide 21: KPI of the Flagship Store (Repeat Members)
LOWYA Business KPI of the Flagship Store (Repeat Members) GMV* by repeat members has been on a rise as guest purchasers become members and new members turn into repeat members. GMV by member type (LTM*) (Million yen) Repeat members New members Guest purchasers Repeat member order ratio (%) 14,000 22
Slide 22: KPI of the Flagship Store (Average Basket Value)
LOWYA Business KPI of the Flagship Store (Average Basket Value） Average basket value remains stable. The average basket value among members is gradually decreasing, but remains on forecast, due to contribution from factors such as an increase in the proportion of low-value repeat orders. Average bas
Slide 23: LOWYA Day (1)
LOWYA Business LOWYA Day (1) For LOWYA Day (June 8~), when we hold large-scale promotional events each year, we trialed a new marketing initiative, reducing the discount ratio to half of last year’s level. Free Gift Campaign Featuring a variety of special-feature events! Limited-time Sale A new pop-
Slide 24: LOWYA Day (2)
LOWYA Business LOWYA Day (2) Despite unfavorable weather, the number of visitors to the limited-time-only store exceeded expectations, and enabled us to confirm the existence of customer needs that cannot be satisfied through e-commerce alone. We received many requests through social media to hold s
Slide 25: Report on DOKODEMO Business
4 Report on DOKODEMO Business Copyright 2022 VEGA corporation. All Rights Reserved. 25
Slide 26: DOKODEMO Business Management Indicators
DOKODEMO Business Management Indicators While memberships and the number of app DLs increased smoothly, average basket value grew and GMV continued to show a high growth rate Three months ended Three months ended Item YoY June 30, 2021 June 30, 2022 GMV (million yen) 747 1,573 210.4% (+825) Net sale
Slide 27: DOKODEMO Business GMV and Net Business Income
DOKODEMO Business GMV and Net Business Income GMV rose 110.4% year on year to reach its highest level ever, and we achieved a profit on the back of this higher- than-anticipated GMV growth. However, we have designated this as an investment phase focusing on GMV growth, and we will not pursue profit
Slide 28: DOKODEMO Business GMV
DOKODEMO Business GMV Repeat customer GMV increased further, accounting for 77.3% (Million yen) Repeat customer GMV New customer GMV Ratio of repeat customers 1,600 1,573 100.0% 357 1,400 75.1% 80.0% 1,200 70.7% 72.7% 1,021 1,056 77.3% 1,000 68.5% 65.0% 64.7% 64.9% 64.4% 263 60.0% 299 56.2% 56.9% 74
Slide 29: Ratio of GMV by Delivery Destination Area
DOKODEMO Business Ratio of GMV by Delivery Destination Area Deliveries to Asia, mainly Taiwan, account for more than 90% of GMV By region By country Middle East 0.1％ Oceania 0.3％ Europe 0.7% North America Korea 2.4％ US 0.3％ Hong Kong 2.3％ Taiwan 5.1％ 89.3％ Malaysia Asia 0.3％ Philippines 0.3％ 96 .4 ％
Slide 30: Appendix
5 Appendix Copyright 2022 VEGA corporation. All Rights Reserved. 30
Slide 31: Impact of a New Revenue Recognition Standard
LOWYA Business Impact of a New Revenue Recognition Standard As a new accounting standard for revenue recognition (new Revenue Recognition Standard) has been applied from the fiscal year ended March 31, 2022 (FY2021), which has created a difference between GMV and sales, the Company has newly announc
Slide 32: Market Scale (Past Trend)
LOWYA Business Market Scale (Past Trend) The furniture and interior e-commerce market is a growth market, expanding with a CAGR of 5.51% (2016-2020) The rate of e-commerce shift remains relatively low compared to other products, and the further progress of e-commerce shift is forecast. E-commerce ma
Slide 33: Market Scale
LOWYA Business Market Scale Target market is set to expand, driven by a greater range of products offered and an increasing shift to e-commerce, which presents significant room for growth Field for further exploration (Not only related fields, but merchandise in general acceptable to LOWYA users in
Slide 34: Positioning
LOWYA Business Positioning Establishing a position in the “trendy & low price” space of the furniture and interior products market High price High-class High-class antique overseas furniture High-quality furniture Trendy area standard Traditional furniture furniture Select fashionable furniture Simp
Slide 35: Purchaser Data
LOWYA Business Purchaser Data Showing higher ratio of females in their 20’s to 30’s, and in the Kanto region by area Ratio of Age distribution Area distribution male vs. female 60 and older 2% 50 to 59 Other 7% Male Kyushu 14% 40 to 49 29 and 17% younger 40% 8% Kanto Female 43% Tokai 30 to 39 60% 9%
Slide 36: DOKODEMO Business Market Scale
DOKODEMO Business Market Scale Even with a platform specialized for seller companies in Japan, massive markets present abundant opportunities BtoC cross-border e-commerce market scale (billion dollars) *1 Cross-border e-commerce usage by region (2018 ) *2 Have never used Have used before Middle East
Slide 37: IR Inquiries
IR Inquiries vega_ir@vega-c.com 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 act