Slide 1: Quarterly Financial Results for the Six Months Ended September 30, 2019
Quarterly Financial Results for the Six Months Ended September 30, 2019 Vega corporation Co., Ltd. Copyright 2019 VEGA corporation. All Rights Reserved.
Slide 2: Financial Highlight
■ Financial Highlight Net sales: 3,356 million yen (113.0% YoY) 2Q Operating profit: 20 million yen ((95) million yen in previous 2Q) Results Overview Net sales: 6,676 million yen (105.3% YoY) 1H Operating profit: 28 million yen ((23) million yen in previous 1H) ・ Net sales and ordinary profit incre
Slide 3: Overview of Quarterly Financial Results
Overview of Quarterly Financial Results for the Six Months Ended September 30, 2019 2 Copyright 2019 VEGA corporation. All Rights Reserved.
Slide 4: Quarterly Sales
■ Quarterly Sales Net sales increased by 13.0% YoY Gross margin improved as a result of sales price and product lineup revisions Net sales Gross profit (Million yen) margin Net sales 4,000 Gross profit margin 60.0% 3,541 3,440 3,356 3,500 3,341 3,407 3,371 3,320 58.0% 3,198 3,029 2,969 56.4% 3,000 5
Slide 5: Quarterly Operating Profit
■ Quarterly Operating Profit Operating profit increased by 115 million yen YoY due to the effects Operating profit of gross margin improvement and reduction in fixed costs (Million yen) 250 207 200 187 144 150 100 71 50 22 20 7 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q (50) (100) (95) Improvement (150) (129)
Slide 6: Quarterly SG&A Expenses Ratio
■ Quarterly SG&A Expenses Ratio (%) 2.6 2.9 1.9 1.8 3.3 2.1 2.1 1.7 2.8 2.8 2.5 1.9 1.1 1.7 1.6 2.4 2.6 11.8 12.5 14.7 12.6 2.7 2.7 2.7 11.9 10.4 10.5 9.5 9.7 9.8 12.5 11.5 11.1 11.6 11.3 10.2 8.9 9.7 9.9 10.0 24.7 23.9 26.5 27.0 27.8 27.5 27.6 27.4 24.4 22.8 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY2018 FY2
Slide 7: Semiannual Sales
■ Semiannual Sales Net sales in 1H FY2020 increased by 5.3% YoY Net sales Gross margin ratio improved by 2.6pt from 2H FY2019 Gross profit (Million yen) margin Net sales 8,000 60.0% Gross profit margin 7,000 6,749 6,981 6,676 6,227 6,341 58.0% 6,000 5,000 56.3% 56.0% 4,000 54.0% 3,000 54.3% 54.1% 53
Slide 8: Semiannual Operating Profit
■ Semiannual Operating Profit Profits improved as a result of a 51 million yen increase in operating profit compared to 1H FY2019 owing to the effects of a Operating profit gross margin improvement and a reduction in fixed costs (Million yen) 500 395 400 300 200 166 100 28 0 1H 2H 1H 2H 1H (100) (23
Slide 9: Semiannual SG&A Expenses Ratio
■ Semiannual SG&A Expenses Ratio (%) 2.4 2.6 2.4 2.3 1.4 2.3 1.8 2.6 2.7 13.6 12.2 2.7 11.1 10.1 9.7 11.3 11.3 11.5 9.2 9.9 26.8 27.7 27.5 24.5 23.3 1H 2H 1H 2H 1H FY2018 FY2019 FY2020 (Note 1) Presented as the net amount of revenue and expenditures. Advertising expenses R&D expenses (Note 1) Fixed
Slide 10: Statement of Income
■ Statement of Income Net sales and ordinary profit increased YoY due to early profit improvement (Million yen) Six months ended Six months ended Sales ratio Sales ratio Change YoY September 30, 2018 September 30, 2019 Net sales 6,341 100.0％ 6,676 100.0％ ＋335 105.3％ Gross profit 3,432 54.1％ 3,761 56
Slide 11: Balance Sheet
■ Balance Sheet Product inventory decreased by 550 million yen as optimization of product inventory has progressed steadily since the end of the previous fiscal year As cash and deposits also increased, the Company repaid 500 million yen in loans (Million yen) Previous fiscal year Six months ended P
Slide 12: Report on LOWYA Business
Report on LOWYA Business 11 Copyright 2019 VEGA corporation. All Rights Reserved.
Slide 13: Net Sales by Sales Channel <LOWYA Businesses>
■ Net Sales by Sales Channel <LOWYA Businesses> Net sales at the flagship store increased by 43.0% YoY Sales are smoothly shifting to the flagship store Rakuten Amazon Yahoo Net sales by sales channel * Ratios shown below are YoY comparisons Flagship store Rakuten marketplace store: up 1.3% Flagship
Slide 14: Net Sales by Sales Channel <Flagship store>
■ Net Sales by Sales Channel <LOWYA Businesses Flagship store > Flagship store ratio increased from 24.0％ in the previous 2Q to 30.3% Quarterly net sales exceeded 1 billion yen Net sales Flagship (Million yen) store ratio Flagship store Marketplace store 30.3% 35.0% Flagship store ratio 3,000 30.0%
Slide 15: Online Advertising Expenses <Flagship store>
■ Online Advertising Expenses <LOWYA Businesses Flagship store > Efficient online advertising resumed in 2Q (Million UU) The number of visitors increased by 27.4% YoY 6.00 Online advertising expenses 5.03 Million UU Number of visitors 5.00 3.94 million UU 4.00 3.00 2.00 1.00 0.00 1Q 2Q 3Q 4Q 1Q 2Q 3
Slide 16: Delivery Expense Ratio <LOWYA Businesses>
■ Delivery Expense Ratio <LOWYA Businesses> The Company optimized product inventory, reviewed the product lineup and curbed delivery expenses despite staged rises in delivery expenses （％） 20 Packing and shipping costs ratio 17.9 18.0 17.6 17.1 16.3 16.1 April July September Rises in delivery 14.8 ex
Slide 17: Management Indicators <LOWYA Businesses>
■ Management Indicators <LOWYA Businesses> The number of visitors rose due to advertising investments and a rush in demand before the consumption tax hike Average customer spend increased as a result of the review of sales prices and product lineup Fiscal year ending Fiscal year ended March 31, 2019
Slide 18: Management Indicators <Flagship store>
■ Management Indicators <LOWYA Businesses Flagship store > The number of visitors rose as efficient advertising resumed in 2Q Average customer spend and CVR also grew smoothly Fiscal year ending Fiscal year ended March 31, 2019 March 31, 2020 Item 1Q 2Q 3Q ４Q 1Q 2Q (Apr. –Jun.) (Jul. –Sep.) (Oct. –D
Slide 19: Initiatives in the Second Quarter
Initiatives in the Second Quarter (1) Initiatives toward improving profit (2) Initiatives toward increasing access to the flagship store and sales 18 Copyright 2019 VEGA corporation. All Rights Reserved.
Slide 20: Initiatives in the Second Quarter: Improving Profit (1)
*Texts in red show ■ Initiatives in the Second Quarter <(1) Improving Profit＞ updates from 1Q Continue with 4 initiatives toward “improving profit” (1) Reduce storage expenses Issues Progress in 1H ・Adjust amount of inventory ・Saved space at some warehouses to adjust amount of inventory ・Consider in
Slide 21: Initiatives in the Second Quarter: Improving Profit (2)
*Texts in red show ■ Initiatives in the Second Quarter <(1) Improving Profit＞ updates from 1Q Continue with 4 initiatives toward “improving profit” (3) Improve cost of sales ratio Issues Progress in 1H ・Conducting audits and selection to decide ・Select and concentrate suppliers suppliers ・Reduce cos
Slide 22: Other initiatives that contributed to improving profit
■ Initiatives in the Second Quarter <(1) Improving Profit＞ Other initiatives that contributed to “improving profit” Initiatives Effects on the previous 2H Reduced warehouse storage floor space (1) Reviewed storage efficiency by 15,963 m2 by improving storage efficiency Reduced inventory value by 550
Slide 23: Initiatives in the Second Quarter: New Access
■ Initiatives in the Second Quarter <(2) New Access> Provided an ease-of-shopping experience by expanding access to meet demand before the tax hike and implementing new interactive functions After Attracting customers Customer visit Experience and examine Purchase purchase Implementation of new func
Slide 24: LOWYA360
Initiatives in the Second Quarter <(2) New Access> 1 LOWYA360 Released in-house developed and VR-enabled LOWYA360 Realistic environment and textures recreated by LOWYA AR models Provides a sense of presence and immersion and allows users to arrange the entire home with a 360-degree view ✔ Recreates
Slide 25: LOWYA Search by Appearance
Initiatives in the Second Quarter <(2) New Access> 2 LOWYA Search by Appearance Released “LOWYA Search by Appearance” employing deep learning technology Developed an in-house image search function featuring artificial intelligence (AI) AI automatically recognizes interior shapes and colors in an ima
Slide 26: Brand tie-ups
Initiatives in the Second Quarter <(2) New Access> 3 Brand tie-ups Planned tie-up products with apparel brands and artists Generated publicity in conjunction with SNS campaigns 430 X LOWYA TOYA HORIUCHI X LOWYA Collaboration with 430, an apparel line Collaboration with TOYA HORIUCHI, a popular produ
Slide 27: New Businesses (R&D)
New Businesses (R&D) 26 Copyright 2019 VEGA corporation. All Rights Reserved.
Slide 28: DOKODEMO Business
Business 27 Copyright 2019 VEGA corporation. All Rights Reserved.
Slide 29: DOKODEMO Business [Indicators]
■ DOKODEMO Business [Indicators] Membership and the number of APP DLs are growing smoothly Strengthen Customer Relationship Management (CRM) to further increase repeat customers 2Q ended 2Q ended Item September 30, September 30, YoY 2018 2019 Membership (thousand people) 308 439 142.3％ Number of APP
Slide 30: DOKODEMO Business [Distribution]
■ DOKODEMO Business [Distribution] Gross Merchandise Sales (GMS) decreased by 10.7% YoY by curbing advertising expenses (Million yen) Implemented efforts to expand distribution from 2H Repeat customers GMS 250 New customers GMS Develop new categories to handle 200 Initiatives to increase repeat cust
Slide 31: DOKODEMO Business [Enhancement of Measures]
■ DOKODEMO Business [Enhancement of Measures] Strengthened department store cosmetics and reuse (second-hand brand items) categories Aiming to expand distribution by focusing on product categories that are expected to meet overseas demand Department ✔ Handling of department store cosmetics store Num
Slide 32: Business Integration
Business 31 Copyright 2019 VEGA corporation. All Rights Reserved.
Slide 33: Business integration of LOWYA and Laig
■ Business integration of LOWYA and Laig Business integration of LOWYA and Laig will unify business investments and eliminate redundant costs Present Change SPA-type EC Platform SPA-type EC ＋ Platform Advertisement Advertisement Advertisement Sasage tasks Sasage tasks Sasage tasks System System Syst
Slide 34: Appendix
Appendix 33 Copyright 2019 VEGA corporation. All Rights Reserved.
Slide 35: LOWYA Business: Positioning
■ Appendix LOWYA Business: Positioning Establishing the fast interior category in the “trendy & low price” space of the furniture and interior products market High price High-class High-class overseas antique furniture furniture High-quality standard Select fashionable Traditional furniture furnitur
Slide 36: LOWYA Business: Service Vision
■ Appendix LOWYA Business: Service Vision As a provider of “fast interior,” Offer “memorable experiences” that go beyond value expected by customers Fulfill satisfaction and inspiration by creating design that reflects a variety of tastes and trends. 35 Copyright 2019 VEGA corporation. All Rights Re
Slide 37: Business Model Characteristics
■ Appendix Business Model Characteristics D2C business model conducting the entire procedure inhouse (Direct to Consumer) Product Online Marketing Import Warehouse (Attracting customers） Delivery CS Development sales Customers Views Designing, buying Manufacturing by Style coordination Order managem
Slide 38: LOWYA Business, Customer Data
■ Appendix LOWYA Business, Customer Data (Male vs. Female, Area Distribution, and Generation Distribution) Showing higher ratio of female in their 30’s, mainly in the Tokyo metropolitan area (April 2019 to September 2019) Ratio of male Area distribution Age distribution vs. female ■ Kanto 37.7 ％ ■ 2
Slide 39: DOKODEMO Business: Proportion of Deliveries by Country
■ Appendix DOKODEMO Business: Proportion of Deliveries by Country based on GMS Proportion of deliveries by country based on the GMS ratio is widely distributed centering on Asia Canada China 5.0％ Proportion of deliveries by country 3.0％ South Korea Hong Kong 2.8％ US Latin America Middle East Europe
Slide 40: DOKODEMO Business: Sales Ratio by User Data and Category
■ Appendix DOKODEMO Business (Sales Ratio by User Data and Category) Female users in their 30’s are increasing Calculation period: July to September 2019 <User data> <User data> Sales ratio by Gender Age category Food & Alcohol 10 - 19 6.5％ Baby & Maternity 3.1％ 4.5％ 20 - 24 13.8％ Other Male 8.5％ 25
Slide 41: Synergy of Company-wide Businesses
■ Appendix Synergy of Company-wide Businesses Share each system in LOWYA fulfillment service with DOKODEMO and aim for its maximization <Past performance> *Experience in global marketing (57 million DLs for game apps) B to B to C Warehouse Marketing EC Delivery CS sharing (Attracting customers) Mark
Slide 42: Views and forecasts in this document were prepared based on the judgment of the Company
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 actual outcomes to differ materiall