Slide 1: Full-year Financial Results for the Fiscal Year Ended March 31, 2022
Full-year Financial Results For the Fiscal Year Ended March 31, 2022 Vega corporation Co., Ltd. / Securities code: 3542
Slide 2: Agenda
1 Business Description Overview of Financial Results 2 for the Fiscal Year Ended March 31, 2022 3 Report on LOWYA Business 4 Report on DOKODEMO Business 5 Financial Results Outlook 6 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 The Company Users companies Orders Displayed in 5 languages, with a
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 Financial Results for the Fiscal Year Ended March 31, 2022
2 Overview of Financial Results for the Fiscal Year Ended March 31, 2022 Copyright 2022 VEGA corporation. All Rights Reserved. 7
Slide 8: Financial Highlight
Financial Highlight Steady progress made in increasing members, raising the repeat rate, enhancing product lineup and other efforts to achieve growth, despite demand in the LOWYA business experiencing a reactionary decline against the surge in growth of the previous fiscal year DOKODEMO business ful
Slide 9: Financial Results for the Fourth Quarter
Financial Results for the Fourth Quarter for the Fiscal Year Ended March 31, 2022 Net sales: 4,376 million yen, Operating profit: 146 million yen (Million yen) Fiscal year ended Fiscal year ended Mar. 31, 2021 Fiscal year ended Mar. 31, 2021 (New Revenue Recognition Standard Mar. 31, 2022 YoY retros
Slide 10: Financial Results for the Fiscal Year (Full-year)
Financial Results for the Fiscal Year Ended March 31, 2022 (Full-year) Net sales: 16,832 million yen, Operating profit: 596 million yen (Million yen) Fiscal year ended Fiscal year ended Mar. 31, 2021 Fiscal year ended Mar. 31, 2021 (New Revenue Recognition Standard Mar. 31, 2022 retrospectively appl
Slide 11: Net Sales / Full Year & Quarterly
Net Sales / Full Year & Quarterly Full year: 16,832 million yen, a YoY decline, although up +28.2% from pre-pandemic results of two years earlier Full year Quarterly (Million yen) (Million yen) 2 years earlier 6,000 +28.2% 20,000 18,371 5,166 18,000 16,832 5,000 4,737 4,372 4,514 4,376 16,000 4,094
Slide 12: Operating Profit / Full Year & Quarterly
Operating Profit / Full Year & Quarterly Full year: 596 million yen, a YoY decline, although up +413.8% compared to pre-pandemic results of two years earlier Full Year Quarterly (Million yen) (Million yen) 1,000 2,000 1,824 800 748 1,500 600 2 years earlier 417 +413.8% 409 1,000 400 596 249 245 146
Slide 13: Quarterly SG&A Expenses Ratio
Quarterly SG&A Expenses Ratio (against Net Sales) The SG&A expenses ratio progressed steadily overall due to a decrease in both the selling expenses ratio and delivery expenses ratio, despite a rising fixed costs ratio and advertising expenses ratio resulting mainly from investment in the flagship s
Slide 14: Balance Sheet
Balance Sheet While inventory is increasing, there are still no concerns about financial soundness (Million yen) Previous fiscal year Current fiscal year Previous fiscal year Current fiscal year (as of Mar. 31, 2021) (as of Mar. 31, 2022) (as of Mar. 31, 2021) (as of Mar. 31, 2022) Current assets 6,
Slide 15: Report on LOWYA Business
3 Report on LOWYA Business Copyright 2022 VEGA corporation. All Rights Reserved. 15
Slide 16: 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, indicating progress in our efforts to accelerate GMV growth (Million yen) Timeframe used Three months ended Three months ended Scope Item YoY fo
Slide 17: Quarterly GMV and Net Sales
LOWYA Business Quarterly GMV and Net Sales Although we confirmed growth in our capacity for attracting customers, we fell short of the previous year’s 4Q results, which were a high hurdle with the impact of the declaration of a state of emergency (Million yen) GMV Net sales GMV 91.3%YoY Net sales Yo
Slide 18: Quarterly GMV by Sales Channel
LOWYA Business Quarterly GMV by Sales Channel Marketplace stores in 4Q demonstrated relatively strong performance, keeping the flagship store ratio on par with the previous year (Million yen) Flagship store Marketplace stores Flagship store ratio Down 0.1 pt . 60.0% 51.9% 51.8% 5,000 49.5% 48.7% 53.
Slide 19: Monthly GMV at Flagship Store
LOWYA Business Monthly GMV at Flagship Store Up until 3Q, the flagship store cleared the high hurdle of the previous year, confirming strong demand, although in 4Q GMV was buffeted by a reactionary decline in stay-at-home demand on account of the previous year’s declaration of a state of emergency (
Slide 20: Company-wide Monthly GMV
LOWYA Business Company-wide Monthly GMV 4Q for the overall LOWYA business (flagship store + marketplace stores) saw a reactionary decline that caused a major impact at the flagship store, although in March when demand rose, results were close to the previous year—a high hurdle - confirming the capac
Slide 21: Cost of Sales Ratio and Delivery Expense Ratio (vs. GMV)
LOWYA Business Cost of Sales Ratio and Delivery Expense Ratio (vs. GMV) Cost of sales ratio increased due to a combination of rising costs for marine container transportation and raw material procurement, coupled with yen depreciation. However, further reduction in delivery expenses continued to off
Slide 22: Profit Structure by Sales Channel
LOWYA Business Profit Structure by Sales Channel The average value per order and the contribution margin (before marketing expenses)* are 1.3 times and 1.6 times larger at the flagship store than at marketplace stores The business structure is designed to improve profit margin by expanding GMV throu
Slide 23: Marketing Investment Ratio (vs. Flagship Store GMV)
LOWYA Business Marketing Investment Ratio (vs. Flagship Store GMV) At present, our focus is on GMV growth by acquiring and energizing members at our flagship stores, and continuing to invest aggressively in marketing while being careful to not invest excessively Advertising expense ratio (Advertisin
Slide 24: Enhance Product Lineup (i)
LOWYA Business Enhance Product Lineup (i) Significantly expanded handling of other companys’ brand products in the fiscal year ended March 31, 2022, which was positioned as a trial phase. While positioning the development of a strong product lineup as a key measure, plans for the fiscal year ending
Slide 25: Enhance Product Lineup (ii)
LOWYA Business Enhance Product Lineup (ii) In the past year, the number of items we handle from other companies’ brands has grown by approximately tenfold In the fiscal year ending March 31, 2023, together with boosting the number of items, our policy is to further boost access gained Net sales and
Slide 26: Enhance Product Lineup (iii)
LOWYA Business Enhance Product Lineup (iii) Add design- and trend-conscious new products while expanding product categories primarily of other companies’ brands Products of the Company’s PB Products of other companies’ brands Copyright 2022 VEGA corporation. All Rights Reserved. 26
Slide 27: LOWNYA, Furniture Just for Cats
LOWYA Business “LOWNYA,” Furniture Just for Cats We searched nationwide for a “Nyanbassador,” and on Cat Day, February 22, 2022, launched this jointly developed ideal furniture for cats Copyright 2022 VEGA corporation. All Rights Reserved. 27
Slide 28: App and Social Media Measures
LOWYA Business App and Social Media Measures With the number of app downloads and registered social media users constantly rising, we are making steady progress with initiatives to build a solid customer base Official apps Instagram @lowya_official Over 600 thousand downloads Over 810 thousand follo
Slide 29: Recognition Rate
LOWYA Business Recognition Rate The LOWYA logo recognition rate continues to rise steadily, standing at 15.4% nationwide With the potential for growth still largely expected, we continue to consider various measures for improvement (%) LOWYA logo recognition rate 18.0 15.4 16.0 14.4 14.0 12.0 10.0 9
Slide 30: KPI of the Flagship Store (Membership)
LOWYA Business KPI of the Flagship Store (Membership) Total membership* of the flagship store topped the 1.12 million mark, and is rising steadily Total membership of the flagship store (People) 1,127,772 1,000,000 800,000 600,000 400,000 200,000 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2020 FY2021 F
Slide 31: 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 32: KPI of the Flagship Store (Average Basket Value)
LOWYA Business KPI of the Flagship Store (Average Basket Value） Average basket value remains stable Average basket value (exclusive of tax) (LTM*) (Yen) Members Guest purchasers 30,000 24,963 25,392 25,089 24,486 24,055 25,000 23,566 23,349 23,168 23,091 23,061 23,047 22,946 20,000 20,574 20,799 20,
Slide 33: Report on DOKODEMO Business
4 Report on DOKODEMO Business Copyright 2022 VEGA corporation. All Rights Reserved. 33
Slide 34: 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 Mar. 31, 2021 Mar. 31, 2022 GMV (million yen) 635 1,056 166.1% (+420) Net sale
Slide 35: DOKODEMO Business GMV
DOKODEMO Business GMV GMV grew by 66.1% YoY, topping 1,000 million yen again in 3Q Repeat customer GMV increased further, accounting for 75.1% (Million yen) Repeat customer GMV New customer GMV Ratio of repeat customers Up 66.1% 1,200 150.0% 1,056 1,021 130.0% 1,000 263 110.0% 299 800 773 747 90.0%
Slide 36: DOKODEMO Business Upfront Investment Amount
DOKODEMO Business Upfront Investment Amount GMV has been steadily expanding, keeping the upfront investment level (net expenditure of this business) under control Transactions are projected to rise further by continuing to retain repeat customers while efficiently acquiring new customers (Million ye
Slide 37: 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 0.2％ Oceania 1.1％ Europe Africa 1.5% 0.02％ North America Latin America Korea 3.3％ 0.01％ US 0.4％ Hong Kong 3.1％ Taiwan 9.9％ 81.8％ Malaysia A
Slide 38: Financial Results Outlook
5 Financial Results Outlook Copyright 2022 VEGA corporation. All Rights Reserved. 38
Slide 39: FY 2023 Financial Results Outlook
FY 2023 Financial Results Outlook While maintaining emphasis on GMV growth, in light of pressure on profits due to rising costs, plans to make disciplined investments (Million yen) Results for fiscal year Outlook for fiscal year Stance on results outlook ended Mar. 31, 2022 ending Mar. 31, 2023 LOWY
Slide 40: Appendix
6 Appendix Copyright 2022 VEGA corporation. All Rights Reserved. 40
Slide 41: 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, which has created a difference between GMV and sales, the Company has newly announced GMV as
Slide 42: 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 Comparison of
Slide 43: 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 44: 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 45: 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 Area male vs. distribution distribution female 60 and older 2％ 50 to 59 Other 7％ Male Kyushu 29 and 15 ％ 40 to 49 younger 45 ％ 9％ 17 ％ Kanto 40 ％ Female Tokai 30 to 39 55
Slide 46: 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 47: 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