Slide 1: FY2022 IR Presentation
FY2022 IR PRESENTATION 2023.4.13
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 LOCONDO’s initiatives for D&I ④ Business model (3) SG&A (1) LOCONDO’s “ecosystem” that consists of the 3 (4) Operating profit businesses ② B/S (2) Sales accumulation
Slide 3: 1. Summary
1. SUMMARY • GMV(before intercompany eliminations) grew to 23.6bn JPY (growth: +11%, annual plan: 23.5Bn) not really a comfortable level considering we summed up the result of Reebok M&A. • On the other hand, Operating profit grew to 1.0bn JPY (growth: +12%, annual plan: 0.9Bn). Although the rent fo
Slide 4: Summary – GMV results and plan
1. SUMMARY – GMV results and plan (before intercompany elimination) In addition to the steady organic growth at LOCONDO.jp, synergy between LOCONDO and Reebok Japan (RBKJ) can support our GMV plan (before elimination) to 30.0 - 32.5Bn ※ Following our historical KPI, GMV multiply marginal profit rati
Slide 5: Summary – Operating profit results and plan
1. Summary – Operating profit results and plan Driven by the completion of our warehouse investment and the cost optimization by our in- house business model, we plan 1.75Bn of operating profit in FY23 +76% 17.5 14.4 (Unit: JPY 100MM) 9.9 8.8 2018 2019 2020 2021 2022 2023 -0.8 -9.8 5
Slide 6: New enterprise name JADE GROUP INC
1. Summary – New enterprise name “JADE GROUP INC” Aiming to acquire more brands for the future growth with remaining our original spirit, we will change our enterprise name to “Jade Group Inc” the original name of our foundation 6
Slide 7: Our Business
Our Business 7
Slide 8: 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 9: 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 10: 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 11: LOCONDO's D&I Initiatives
2. Business Overview ③ Locondo's "D&I” Initiatives Although our D&I (Diversity & Inclusion) indexes are currently above average, we will continue to improve our environment to achieve further improvements. Item Current Industry average Target (3 years) Main actions Wage differentials between men and
Slide 12: Ecosystem that consists of the 3 businesses
2. Our Business ④Business model (1) “ecosystem” that consists of the 3 businesses LOCONDO has 3 businesses connected complementary and the ecosystem creates our own competitiveness. Sharing inventories: Sell offline inventories at EC Growth driven by the structure Sharing infrastructure: Share logis
Slide 13: EC MALL Business
EC PF 2. Our Business ④Business model (1) EC MALL Business 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
Slide 14: EC MALL Business - Age distribution
2. Our Business ④Business model (1) EC MALL Business - Age distribution Realized the balanced portfolio by adding Fashion Walker. 1,800 K 1,600 1,400 1,200 1,000 800 600 400 200 0 -20 20s 30s 40s 50s 60s LD FW SWS waja TTL 14 (Note) Member with an effective birthday data from our own mall as of the
Slide 15: PLATFORM business
EC PF 2. Our Business ④Business model (2) PLATFORM business 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 pe
Slide 16: BRAND business
EC PF 2. Our Business ④Business model (3) BRAND business 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 devel
Slide 17: Sales accumulation model
2. Our Business ④Business 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. 34% *1 of new cust
Slide 18: Profit structure – Break-even point Model
2. Our Business ④Business 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 19: MTB and LTV
MTB and LTV 19
Slide 20: Overview of the Mid-term business plan
3. MTB and LTV ①Overview of the Mid-term business plan (MTB) • We took 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 Corporation (
Slide 21: 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 21%. It is expected to increase to approx. 35% in 2030, where the EC market size will be approx. 3.5 trillion JPY. Fashion Market Fashion EC Market and EC ratio （100MM） （100MM） 160,000 40,000
Slide 22: MTB and LTV: GMV
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 100
Slide 23: GMV by business (FY22 vs FY30)
3. MTB and LTV ③GMV (unit; JPY 100MM) 【EC】LOCONDO Inc EC (except D2C) What’s changed 【PF】LOCONDO Inc PF (except MANGO) 350 ① FY 2022 reflected the actual result (before 【Brand】RBKJ、MANGO、D2C intercompany elimination) ② We set gross GMV (before intercompany elimination) 150 as KPI since we could veri
Slide 24: GMV growth drivers by business
3. MTB and LTV ③GMV (unit: JPY 100MM) FY22 (actual) FY 30 (estimate) CAGR Key growth drivers • Realizing the organic growth through leveraging our platform service - inventory sharing -, and EC 170 500 + 14％ strengthening the product line, promotion, and UI/UX. • In addition, M&A of brands can drive
Slide 25: 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 Plan 6Bn 60 Includes; ※breakdown: image [Rent] LOCOPORT III Start renting all f
Slide 26: 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 FY22 : 23.7%) 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 27: Results
RESULTS 27
Slide 28: P&L
4. Result ①P&L (unit; JPY 100MM) GMV increased by 11.4% 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 +12.2% growth at Operating Profit by c
Slide 29: 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 30: P&L (2) Sales
4. Result ①P&L (2)Sales（unit; JPY MM) Revenue increased by 23.2% (increased 26.3% 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 growth
Slide 31: 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 1.8% 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 32: P&L (4) Operating Profit
4. Result ①P&L (4)Operating Profit (unit; JPY MM) Operating profit was 99MM although warehouse costs increased by JPY 117MM 504 485 378 350 319 303 303 173 145 100 105 99 87 57 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Slide 33: YoY comparative analysis of operating profit
4. Result ①P&L (4) YoY comparative analysis of operating profit (Unit: JPY MM) Although the rent for the new warehouse and Reebok stores increased, operating profit increased by + 12.2% mainly due to GMV growth, cost reduction such as at ads, and the tax reduction due to the capital reduction + 55 ＋
Slide 34: 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 7,695 Current Liabilities 3,488 Deposits received Cash and cash equival
Slide 35: Cash flows statements
Cash flows statements (Unit: million JPY) Invest to the business growth (M&A) and shareholder returns from the cashflow from operating activities * financial activities: fund from Itochu corporation 2,500 2,000 1,500 1,000 500 0 FY18 FY19 FY20 FY21 FY22 (500) (1,000) (1,500) (2,000) Cash flows from
Slide 36: 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 322 348 359 346 349 356 339 313 296 287 283 300 306 297 291 265 249 231 220 213 740 783 833 792 788 809 829 812 796 783 Our own E-malls 691 536 57
Slide 37: EC mall: Average shipping price
4. Result ③Each business (1) EC mall : Average shipping price (Shipping basis) Our own E-malls stayed at same level 0% and other E-malls increased by+ 21% The price basically stays in a reasonable range. 12,638 11,731 11,914 11,720 11,406 10,776 10,853 10,074 10,614 10,907 Our own E-malls 10,870 10,
Slide 38: 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% 21% 20% 20% 20% 20% 19% 18% 18% Excluding D2C 8% 7% 8% 8% 7% 7% 7% 7% 7% 7% 7% 6% 6% 6% 7% 6% 6% 6% 5% 6%
Slide 39: EC mall: Number of brands
4. Result ③Each business (1) EC mall : Number of brands The number of brands excluding waja is 3,361. The number of brands including waja is 4,605 4,849 4,661 4,605 4,644 4,182 3,969 3,838 3,676 3,632 3,426 3,344 3,361 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
Slide 40: Platform: e-3PL shipment quantity
4. Result ③Each business (2) Platform : e-3PL shipment quantity (10K units) e-3PL shipments increased steadily by +23%. Our goal is to become “Hub of warehouse” in the shoe industry. 91 92 85 + 23% 81 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 3
Slide 41: 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