Jade Group, Inc. · TSE:3558
Jade — LOCONDO — Q3 2021 Earnings Presentation
34 slides from Jade's earnings presentation, Jan 14, 2022
Slide 1: Presentation Material 2021 Q3
PRESENTATION MATERIAL 2021 Q3 2022.1.14
Slide 2: Summary
SUMMARY • 2021.3Q (March - Nov) results: GMV 15.58 bn JPY (growth: +4%, progress: 72%)、Sales 7.27 bn JPY (growth: - 3%, progress: 70%)、Operating income 0.71 bn JPY (growth: -37%, progress: 71%)、Net income 0.54 bn JPY (growth: -35%, progress: 77%) • The reasons of the weak growth & progress are follo
Slide 3: New Vision, New LOCONDO Policy for Long-Term Plan for 2030
New Vision, New LOCONDO Policy for Long-Term Plan for 2030 BE THE ONLY Fast Move quickly and flexibly “Consumers don’t buy shoes online.” “It is difficult to realize DX and OMO“ “LOCONDO can’t develop a good Faith brand.” Gain trust from inside and outside the company LOCONDO has grown by solving th
Slide 4: LOCONDO's ecosystem that consists of the 3 businesses
LOCONDO’s “ecosystem” that consists of the 3 businesses LOCONDO has the 3 businesses that supplement mutually and build those own competitiveness. Contents Sharing inventories: Sell at Contents • High recognition EC offline inventories • Omni store IT & logistic as free return platform shipping EC •
Slide 5: 1. EC Mall
EC PF 1. EC MALL Brand LOCONDO has own EC mall （LOCONDO.jp & Fashion Walker）and stores in other companies’ EC mall such as Rakuten and Yahoo! Promote business expansion through the two axes of “increase in the number of members” through effective web advertising operations and “increase in the produ
Slide 6: 2. Platform
EC PF 2. PLATFORM Brand Provide various systems and services that enable centralization of inventories and integration of digital information through DX（Digital Transformation） Implementing all of these services and promoting the introduction of the "ALL-IN-ONE Package" that realizes a complete omni
Slide 7: 3. Brand
EC PF 3. BRAND Brand There are two major brand businesses, the "agency brand 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 8: LOCONDO's sales accumulation model
LOCONDO’s sales accumulation model A model that builds up sales through the below cycle New buyers → repeat customers → expansion of active user base → enhancement of product lineup → increase in new inflows Increased natural influx from search Over 40% * of new customers re-purchase within engine(S
Slide 9: LOCONDO's revenue structure - Break Even Model
LOCONDO’s revenue structure - Break Even Model- A business model in which the operating profit "rate" rises in proportion to sales after exceeding the break-even point. (1) GMV, (2) Marginal profit rate (= gross profit rate – variable cost rate) and (3) Fixed costs are Key Performance Indicators for
Slide 10: 3.5 trillion JPY ($35 bn) EC ratio in the fashion EC market
EC ratio in the fashion EC market The current EC ratio of the domestic fashion market is about 15%. It is expected to rise to around 30%, then the EC market size will be about 3.5 trillion JPY. EC ratio 2030 fashion EC market size * Clothing, shoes, bags (expected) 2020 2030：estimation 19% 41% 3.5tr
Slide 11: Locondo Long-term Vision (GMV, bn JPY)
Locondo Long-term Vision (GMV, bn JPY) Get 3% of the market share in the 3.5 trillion JPY market; GMV of 100 billion JPY ($ 1bn) 1000 10years CAGR + 17% 5years CAGR + 27% 215 182 205 141 65 80 95 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 (Note) Figures for 2021
Slide 12: How to achieve 100 bn JPY GMV
How to achieve 100 bn JPY GMV [bn JPY, rough number] 2020 (rough)* 2030 (rough) New M&A – no.8 (5) New M&A – no.7 Brand (5) New M&A – no.6 (5) New M&A – no.5 Locondo Locondo (5) BOEM Brand 3 1.5 (36) New M&A – no.4 (15) (10) (12) 1 (5) 2 SWS (5) 2 Fashion Walker EC mall PF (5) (BOEM) LOCOMALL (4) *
Slide 13: How to achieve 100 bn JPY GMV
How to achieve 100 bn JPY GMV [bn JPY, rough number] 2020 2030 CAGR key growth drivers (rough) (rough) Locondo Utilize the ecosystem to strengthen the lineup of items. Continue 12 36 + 12％ to attract customers on SNS and aim for organic growth LOCO The lineup of items and inventory are integrated wi
Slide 14: Locondo long-term vision (fixed cost)
Locondo long-term vision (fixed cost) – bn JPY Several areas of the new warehouse started operation in May 2021. It 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 Rent increase here thoug
Slide 15: Long-term Vision (Marginal Profit and Operating Profit)
LOCONDO Long-term Vision (Marginal Profit and Operating Profit) Operating profit (EBIT) is expected to reach at 10 billion JPY when the GMV is 100 billion JPY. Marginal profit rate is 16.0％ （FY2020: 17.2%） 100 14 10 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 operating profit marginal pro
Slide 16: Results
RESULTS 16
Slide 17: GMV - Quarterly transition
GMV～Quarterly transition～（Unit: million JPY Although the declaration of a state of emergency has been canceled in October, the emergency declaration of the end of September, then the EC mall business by sluggish demand recovery (Our own E-malls - 3% , Stores in other E-malls - 5% ) is sluggish the o
Slide 18: Sales - Quarterly transition
Sales～Quarterly transition～（Unit: million JPY） Sales were -4% compared to last year in the third quarter due to a decline in the sales component ratio of the D2C brand, which is purchased inventory. 2,856 2,700 2,762 2,589 -4% 2,310 2,376 2,190 2,201 2,218 1,980 1,883 1,966 1,955 1,476 1,371 2018 20
Slide 19: Platform: e-3PL shipment quantity - quarterly transition
Platform: e-3PL shipment quantity-quarterly transition- (10,000 units) Due to the impact of the ALL-IN-ONE package that started in August last year, the number of e-3PL shipments increased significantly to +44% Our goal is to become “Hub of warehouse” in the shoe industry. 85 + 44% 71 61 63 63 59 56
Slide 20: EC mall: Number of active users
EC mall: Number of active users （Unit: thousand JPY） The number of active users in the EC mall business (purchased at least once a year) is almost the same level as in the second quarter of the current fiscal year. Stores in other E-malls 322 348 349 296 287 283 300 306 297 291 265 249 231 220 213 8
Slide 21: EC mall: Average shipping price
EC mall: Average shipping price (Shipping -based) The unit shipping price for our own malls and stores in other E-malls has decreased due to a decrease in the D2C sales volume for our own malls, and the sales component ratio of low-priced items for other companies' malls has increased. 12,638 11,731
Slide 22: EC mall: Return rate (excluding D2C brand)
EC mall: Return rate (excluding D2C brand) Return rate of our own EC malls has been steady at around 20%. 30% 29% 29% 27% 27% 27% 26% 26% 26% 25% 25% 25% 22% 22% Our own E-malls 21% 21% 20% 20% 20% 8% 8% 8% 7% 7% 7% 7% 7% 7% 7% 7% 6% 6% 6% 6% 6% 6% 6% 5% Stores in other E-malls 2017 2Q 3Q 4Q 2018 2Q
Slide 23: EC mall: Number of brands
EC mall: Number of brands The number of brands continues to increase 3,969 3,838 3,676 3,426 2,972 2,648 2,365 2,458 2,473 2,546 2,327 2,193 2,097 2,126 2,167 2018 1Q 2Q 3Q 4Q 2019 1Q 2Q 3Q 4Q 2020 1Q 2Q 3Q 4Q 2021 1Q 2Q 3Q 23
Slide 24: Operating profit - Quarterly transition
Operating profit-Quarterly transition (Unit: million JPY) Operating profit (EBIT) was -39% compared to last year in the third quarter 485 504 303 319 303 141 145 106 87 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q (192) (170)
Slide 25: Year to year comparative analysis of operating income
Year to year comparative analysis of operating income （Unit: million JPY） Operating profit decreased year-to-year due to a decrease in D2C'GMV and an increase in costs related to warehouse expansion and bonuses. ＋122 △210 △198 △59 △33 △31 △25 ＋11 1,135 710 FY2020 Relocation Decrease Warehouse Inform
Slide 26: Income statement
Income statement （Unit: million JPY） Of the operating profit KPIs, (1) GMV was not good, but (2) marginal profit ratio and (3) fixed costs were controlled as planned. We updated the plan taking (1) into consideration. FY2021 plan FY2021 plan Item FY2020.3Q FY2021.3Q change before revise after change
Slide 27: SG&A details
SG&A details （Unit: million JPY） Low growth of GMV and increase of some SG&A costs (personnel costs (bonuses) and warehouse rent) resulted in 2.3 points increase of SG&A costs. FY2020.3 FY2021. Item % % YoY Main factors of variation Q 3Q Labor costs 928 6.2% 1,088 7.0% + 0.8% employees 473 3.2% 534
Slide 28: Balance sheet
Balance sheet （Unit: million JPY） Debt-free management, financial soundness with equity ratio of 64%. However, with the revitalization of the M&A market, we plan to significantly increase borrowing for M&A from next fiscal year. Current Assets 5,495 Current Liabilities 2,601 Deposits received Cash a
Slide 29: Plan
PLAN 29
Slide 30: LOCONDO's strengths that are ONLY LOCONDO CAN DO
LOCONDO’s strengths that are “ONLY LOCONDO CAN DO” 1. Inhouse OMO warehouse that can be used as a “hub” of warehouse （LOCOPORT） 2. Packaged PMI approach gained through several M&A • Mango Japan (2017) → integrate warehouse & IT • Misuzu (2018) → Restructure as brand division such as YouTube • MobaCo
Slide 31: How to achieve 100 bn JPY GMV: M&A target
How to achieve 100 bn JPY GMV [bn JPY, rough number] M&A target 2020 (rough)* 2030 (rough) New M&A – no.8 (5) New M&A – no.7 Brand (5) New M&A – no.6 (5) New M&A – no.5 Locondo Locondo (5) BOEM Brand 3 1.5 (36) New M&A – no.4 (15) (10) (12) 1 (5) 2 SWS (5) 2 Fashion Walker EC mall PF (5) (BOEM) LOCO
Slide 32: M&A scheme from 2022
M&A scheme from 2022 (plan, will be announced on the April 14th) Because M&A market is now activated, we are now planning for realizing many M&A and PMI at high speed by acquiring cash through debt & co-investment. Locondo Moba Fashion Partner SWS Waja colle Walker Bank company debt No.5 No.6 No.7 N
Slide 33: Exclusive contract with CASTORE, UK based D2C brand
Exclusive contract with CASTORE, UK based D2C brand Had exclusive contract with CASTORE, UK based D2C brand with GMV 10 bn JPY (worldwide) and 0.5 bn JPY (Japan). They will be managed as a division of LOCONDO (same as MANGO) or as a subsidiary (CASTORE JAPAN) under D2C holding company. 33
Slide 34: Handling of this material
Handling of this material • 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