Slide 1: Presentation Material FY 2021
PRESENTATION MATERIAL FY 2021 2022.4.14
Slide 2: Summary
SUMMARY • We could achieve twelve consecutive years of GMV growth since the foundation at 21.21 bn JPY (growth: +3%, vs plan: 103%) even under the challenging environment, the demand for shoes, our main product, has decreased. • Operating income 0.88 bn JPY (growth: -38%, vs plan: 103%), and Net inc
Slide 3: Vision, Mission and Policy
Vision, 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, Faith, Fair, and Fun!
Slide 4: LOCONDO's seven initiatives for SDGs (1/2)
LOCONDO’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 by scrap leather)
Slide 5: LOCONDO's seven initiatives for SDGs (2/2)
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 ⚫ Diversification -
Slide 6: LOCONDO's ecosystem of the 3 businesses
LOCONDO’s “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 free return platform ship
Slide 7: 1. EC Mall
EC PF 1. 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 8: 2. Platform
EC PF 2. 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-
Slide 9: 3. Brand
EC PF 3. BRAND Brand There are two major brand businesses, the “brand agency business", which is mainly developed as an exclusive agency for overseas brands, and the "D2C (Direct To Consumer) brand business," which is developed in-house in collaboration with influencers. Through M&A and alliances, w
Slide 10: LOCONDO's sales accumulation model
LOCONDO’s 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 customers re-purchase within as
Slide 11: LOCONDO's profit structure – Break-even point Model
LOCONDO’s 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 Performance Indicators for the P
Slide 12: EC ratio in the fashion market
EC 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 2030：estimation
Slide 13: LOCONDO Long-term Vision (GMV)
LOCONDO Long-term Vision (GMV) Get 3% of the market share in the 3.5 trillion JPY market; GMV 100 billion JPY (USD approx. 1bn) 1000 9years CAGR + 19% 5years CAGR + 22% 182 205 212 141 80 95 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 (Note) Unit: JPY100MM 13
Slide 14: Road map to 100 bn JPY GMV
Road map to 100 bn JPY GMV [Rough number] FY 2020* FY 2030 (rough number) New M&A – no.8 (50) Brand New M&A – no.7 (50) New M&A – no.6 (50) New M&A – no.5 LOCONDO LOCONDO (50) BOEM Brand (116) 38 8 5 (360) waja (150) (100) 9 (50) 19 SWS (50) 24 FASHION WALKER EC mall PF (50) (BOEM) LOCOMALL (40) * S
Slide 15: Road map to 100 bn JPY GMV by business
Road map to 100 bn JPY GMV [bn JPY, rough number] 2021 2030 CAGR key growth drivers (Actual*) (rough) LOCONDO Utilize the ecosystem to strengthen the lineup of items. Keep 12 36 + 13％ attracting customers through SNS and realize organic growth LOCO Standardizing the lineup of items and inventory wit
Slide 16: LOCONDO long-term forecast (fixed cost)
LOCONDO long-term forecast (fixed cost) The new warehouse will be fully operational from May 2022, and no further expansion is expected for at least five years thereafter. Other costs are planned to increase gradually along with GMV Rent may increase though it is NOT 60 yet decided (it is still poss
Slide 17: Long-term forecast (Marginal Profit and Operating Profit)
LOCONDO Long-term forecast (Marginal Profit and Operating Profit) Operating profit (EBIT) is expected to be 10 billion JPY when GMV is 100 billion JPY. Marginal profit ratio is 16.0％ （FY2021: 15.6%） 100 14 8 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 operating profit marginal profit fixe
Slide 18: Results
RESULTS 18
Slide 19: New Director
New Director Shigetoshi Takashi Entered MUFG Bank Ltd. (Former Sanwa Bank Ltd.) in 1997, has variety of corporate management offices carrier such as HR, Secretary to CEO, HR, and Global HR, as well as oversea experience in New York , Los Angels, and Dallas (manager), then joined IT venture company a
Slide 20: Income statements / Cash flows statements
Income statements / Cash flows statements （Unit: million JPY） Although COVID-19 stays and one of the core growth driver, D2C business, slowed down, YoY GMV increased mainly by healthy growth of number of brands as well as direct/indirect impact by M&A. YoY Operating profit decreased mainly due to co
Slide 21: SG&A details
SG&A details （Unit: million JPY） Increased by 2.4 points mainly due to bonuses and warehouse investments in addition to the increase in GMV. Item FY20 % FY21 % YoY Main factors of variation Labor costs 1,240 6.0% 1,444 6.8% + 0.8% employees 625 3.0% 707 3.3% + 0.3% Bonus payment part-time job 615 3.
Slide 22: Balance sheet
Balance sheet （Unit: million JPY） Debt-free management, financial soundness with equity ratio of 68%. We plan to increase debt-funding aggressively for M&A from next fiscal year. Current Assets 5,344 Current Liabilities 2,223 Deposits received Cash and cash equivalents 3,318 778 for consignment sale
Slide 23: GMV
GMV（Unit: million JPY） Although 4Q GMV of our own E-malls decreased by 4% due to D2C, 4Q TOTAL GMV stays at the same level driven by BOEM + 11%, and LOCOCHOC + 96% Growth rate Total GMV + 0% 5,621 5,637 Others (stores, wholesale, etc) - 36 % 151 116 77 74 177 88 282 173 +96 % 91 LOCOCHOC 128 719 759
Slide 24: Sales
Sales（Unit: million JPY） 4Q Sales decreased by 6% due to a decline in the sales component ratio of D2C 2,856 2,700 2,762 2,589 2,598 -6% 2,310 2,376 2,190 2,201 2,218 1,980 1,883 1,966 1,955 1,476 1,371 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 1Q 2Q 3Q 4Q 1Q 2Q
Slide 25: EC mall: Number of active users
EC mall: Number of active users （Unit: thousand） The number of active users in the EC mall business (purchased at least once a year) increased by 8% during FY 2021 Other E-malls 322 348 356 349 296 287 283 300 306 297 291 265 249 231 220 213 833 740 783 792 788 809 Our own E-malls 691 578 605 624 62
Slide 26: 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 26 (Note) Member with an effective birthday data from our own mall
Slide 27: EC mall: Average shipping price
EC mall: Average shipping price (Shipping basis) The unit shipping price for our own malls has decreased by 2% due to a decrease in the D2C sales volume, and the price for stores in other E-malls has decreased by 4% due to an increase in low-price item ratio. The price basically stays in a reasonabl
Slide 28: EC mall: Return rate
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% Our own E-malls 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% 5% Other E-malls 2017 2Q 3Q 4Q 2018 2Q 3Q 4Q 2019
Slide 29: EC mall: Number of brands
EC mall: Number of brands The number of brands has grown steadily 4,182 3,969 3,838 3,676 3,426 2,972 2,648 2,473 2,546 2,458 2,327 2,365 2,126 2,167 2,193 2,097 2018 1Q 2018 2Q 2018 3Q 2018 4Q 2019 1Q 2019 2Q 2019 3Q 2019 4Q 2020 1Q 2020 2Q 2020 3Q 2020 4Q 2021 1Q 2021 2Q 2021 3Q 2021 4Q 29
Slide 30: Platform: e-3PL shipment quantity
Platform: e-3PL shipment quantity (10,000 units) ALL-IN-ONE package started in August 2021 drove the increase of e-3PL shipments by +46% Our goal is to become “Hub of warehouse” in the shoe industry. 85 + 46% 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
Slide 31: Operating profit
Operating profit (Unit: million JPY) 4Q Operating profit (EBIT) decreased by - 42% 504 485 319 303 303 173 145 100 105 87 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q (125) (192) (231) (231) (238) (248) 31
Slide 32: YoY comparative analysis of operating income
YoY comparative analysis of operating income （Unit: million JPY） Operating profit decreased year-over-year due to a decrease in D2C'GMV and an increase in costs related to warehouse expansion and bonuses. ＋122 △232 △264 △59 △46 △41 △14 △18 1,438 883 FY2020 Relocation Decrease in Warehouse Fixed rela
Slide 33: Cash flows statements
Cash flows statements (Unit: million JPY) Leveraging the cash flows from operating activities for growth investments and shareholder returns. 2,500 2,000 1,500 1,000 500 0 FY18 FY19 FY20 FY21 (500) (1,000) (1,500) Cash flows from operating activities Cash flows from investing activities Cash flows f
Slide 34: Plan
Plan 34
Slide 35: Five core initiatives
Five core initiatives ① Maximizing synergy of LOCONDO’s three businesses ② Improving QCD (Quality, Cost, Delivery) through streamlining operation ③ Improving QCD thought “Full In-house Operation” (i.e. logistics, IT) ④ Providing value such as DX and OMO through sophisticated inventory management sys
Slide 36: Maximizing synergy of LOCONDO's three businesses
Maximizing synergy of LOCONDO’s three businesses LOCONDO’s 3 businesses are connected complementary. By leveraging the strength at each business, we will expand each business such as through M&A, so that we can grow LOCONDO ecosystem as a whole. Contents Sharing inventories: Sell Contents • High rec
Slide 37: SWS Integration
SWS Integration Completed the system integration in the end of February 2022. Start 2nd phase below. • April 14th : Start “SWS running by STEP” • April 21st : Adding new function, LOCONDO client can login to SWS directly • May 11th : Start “SWS basketball & volleyball by Gallery Ⅱ 37
Slide 38: waja Integration
waja Integration Completed the system and logistics integration in the end of March, and increased the “waja bazar” product lineup significantly. Start new function “LOCONDO Buyer” enable LOCONDO customer to access waja products so that streamlining the inventories. Will start a new service “e-3PL P
Slide 39: Re: Ongoing M&A opportunity
Re: Ongoing M&A opportunity Regarding the brands M&A, one big M&A opportunity is ongoing. We will disclose our annual business plan and mid-term business plan once we see the outcome of the new brands M&A opportunity expected by the end of May which can make a big difference in those plan. LOCONDO M
Slide 40: 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