Village Vanguard Co., Ltd. · TSE:2769

Village Vanguard — Q3 FY05/13 Earnings Presentation

47 slides from Village Vanguard's earnings presentation, 2013

  1. Slide 1: Q3 FY05/13 Results Presentation

    Q3 FY05/13 Results Presentation

  2. Slide 2: Note

    Note: Any current plans, forecasts, strategy projections, expressions of confidence and other statements made by us in these materials are premised on the information that was available at the moment of the initial publication and on models that depend on uncertain factors that could impact future e

  3. Slide 3: Income Statement (Consolidated)

    Income Statement (Consolidated) Income Statement FY05/11 FY05/12 FY05/13 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Act. Q2 Act. Q3 Act. Q4 Est. Sales 9,359 9,125 11,397 9,926 10,158 10,005 12,279 10,500 10,167 10,232 12,504 10,583 SG&A 3,120 3,265 3,401 3,429 3,460 3,593 3,806 3,826 3,665 3,991 4,083

  4. Slide 4: Balance Sheet (Consolidated)

    Balance Sheet (Consolidated) （単位：百万円） Balance Sheet FY05/11 FY05/12 FY05/13 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Act. Q2 Act. Q3 Act. Q4 Est. Cash & Deposit 3,045 3,378 3,582 3,972 2,586 2,865 2,773 3,570 2,721 4,009 3,201 3,526 Inventories 16,182 17,044 16,726 16,950 17,827 19,175 19,007 18,669

  5. Slide 5: Cash Flow (Consolidated)

    Cash Flow (Consolidated) （単位：百万円） © Village Vanguard corporation, All rights reserved. P.4

  6. Slide 6: Parent Company Village Vanguard Corporation

    Parent Company Village Vanguard Corporation © Village Vanguard corporation, All rights reserved. P.5

  7. Slide 7: What We Do

    What We Do Standalone Store Mall-located Store ■Village Vanguard ■Diner Our concept is “Exciting Book Store”. By bringing together various products An old-school hamburger shop such as books, variety goods, and CDs, our stores have a unique feel. modeled after an American diner. ■Other Formats ■new

  8. Slide 8: Examples of Our Merchandising Approach (1)

    Examples of Our Merchandising Approach (1) We offer merchandise by creating a unique retail space aimed at entertaining the customer Merchandise themed around “Harajuku Girls” Once upon a time, For example, merchandise themed around “World Travel” there was a very long zipper… Listen to music while

  9. Slide 9: Examples of Our Merchandising Approach (2)

    Examples of Our Merchandising Approach (2) © Village Vanguard corporation, All rights reserved. P.8

  10. Slide 10: Examples of Our Merchandising Approach (3)

    Examples of Our Merchandising Approach (3) © Village Vanguard corporation, All rights reserved. P.9

  11. Slide 11: How Do We Sell?

    How Do We Sell? We delegate both purchasing and sales decisions to the store level Marketing ■Pursue customer needs in each store Store Manager has absolute discretion Purchasing ■Reflect customer needs directly ■Unique challenge to discover new needs Head Office Proposition Authority ■POP, zone cre

  12. Slide 12: Hiring Strategy

    Hiring Strategy Full Time Customer Temp Staff Employee ■ Hiring people who really understand the company ■ Even temporary staff are allowed to make purchasing decisions ■ Long-term practical on-the-job training © Village Vanguard corporation, All rights reserved. P.11

  13. Slide 13: Sourcing Team

    Sourcing Team Role Two Functions The team assumes the role of in-house wholesaling teams, proposing products (1) Reducing costs by taking (2) Creating competition to promote to stores through marketing activities. advantage of economies of scale a “product refining” effect Manufacturers and External

  14. Slide 14: Store Network (Parent)

    Store Network (Parent) Store data as of end-February 2013 * Figures in parentheses indicate the number of FC stores 393 stores nationwide * Figures in red show there were changes in the number from Q2. Tohoku 377 directly managed (DM) DM 22 Hokkaido 326 VV format DM 16 Aomori 38 new style format FC

  15. Slide 15: VV – Results (Parent)

    VV – Results (Parent) © Village Vanguard corporation, All rights reserved. P.14

  16. Slide 16: Income Statement (Parent)

    Income Statement (Parent) Parent Income Statement FY05/11 FY05/12 FY05/13 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Est. Sales 8,783 8,402 10,776 9,315 9,306 8,863 11,254 9,509 8,949 8,541 10,983 9,096 Gross Profit 3,500 3,403 4,354 3,739 3,738 3,432 4,501 3,690 3,464 3,313 4,271 3,502 SG&A

  17. Slide 17: Sales by Category

    Sales by Category Sales by Category FY05/11 FY05/12 FY05/13 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 SPICE (Parent) 6,780 6,461 8,609 7,177 7,361 6,999 9,216 7,684 7,217 6,958 9,205 (Internal Sourcing Team) 1,752 1,770 2,713 2,088 2,217 2,214 3,116 2,310 2,066 2,056 2,846 (Other) 5,027 4,69

  18. Slide 18: OP Analysis

    OP Analysis (Million Yen) ▲255 27 ▲59 754 67 476 © Village Vanguard corporation, All rights reserved. P.17

  19. Slide 19: Store Openings

    Store Openings FY05/10 FY05/11 FY05/12 FY05/13 Plan and Actual Actual Actual Actual Q1 Q2 Q3 Q4 FY Init. Init. Init. Init. Init. FY FY FY Act. Act. Act. Est. Est. Plan Plan Plan Plan Plan Openings 34 46 38 7 8 8 4 4 1 6 5 25 18 Village Vanguard 30 39 30 6 6 5 4 3 0 6 2 20 12 new style 1 7 7 1 2 3 0

  20. Slide 20: Year on Year Retail Sales at Existing Stores

    Year on Year Retail Sales at Existing Stores YoY sales at existing stores “Strong seller occupying appealing The dedicated Area Manager system spots in the sales rankings” introduced in March 2010, leading to 100.8% YoY sales at existing stores Over-focusing on strong sellers for cumulative FY05/11

  21. Slide 21: New measures

    Theme 1 Recovering Sales Village Vanguard’s Vision Village Vanguard Now Lack of change in layout and lineup Unearth Customer Needs ●Layout looks the same as few years back Disseminate Information ●Fewer new, unique merchandise In 2005 In 2012 Changes in human resource development system Initiative 1

  22. Slide 22: Accelerate change

    Theme 1 Recovering Sales In Q3, we improved displays to gain maximum advantage from the attractiveness of new merchandise Gradually Q2 Q3 Result change Initial measures Next step appearance of Increase ratio of Improve new stores new merchandise merchandise displays Strengthened support group Accele

  23. Slide 23: Inventory Control

    Theme 2 Inventory Control (Million Yen) FY05/11 FY05/11 FY05/12 FY05/12 FY05/12 FY05/12 FY05/13 FY05/13 FY05/13 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Cash Flow from Operations -214 1,042 -950 -1,061 -1,132 102 -159 -685 -1,060 ■Net Income before Tax 2,371 3,065 672 1,098 2,390 2,696 522 707 1,764 ■Net Change i

  24. Slide 24: Titicaca

    © Village Vanguard corporation, All rights reserved. P.23

  25. Slide 25: Company Overview (Titicaca)

    Company Overview (Titicaca) Company name: Titicaca Co. Shareholder composition: Village Vanguard Co., Ltd. (100%) Business: Import and sales of ethnic fashions and daily goods Headquarters: 2-2-3 Shin-Yokohama, Kohoku-ku, Yokohama, Kanagawa Prefecture Representative: Hitoshi Kinami, Managing Directo

  26. Slide 26: Titicaca Store Network

    Titicaca Store Network Store data as of end-February 2013 Figures in red show there were changes in the number from end-November 2012 97 stores nationwide 95 Directly Managed (DM) Hokkaido 2 FC Stores DM 4 Tohoku Hokkaido 4 DM 5 Akita 1 Iwate 1 Hokuriku Yamagata Miyagi DM 7 1 2 ETHIC Kyoto Niigata C

  27. Slide 27: Outside of Titicaca Stores

    Outside of Titicaca Stores New stores opened during Q3 AEON Mall Sapporo Hiraoka Opened Dec 20 Yume Town Hamasen AEON Mall Shibata Opened Feb 1 Opened Feb 15 © Village Vanguard corporation, All rights reserved. P.26

  28. Slide 28: Inside Titicaca Stores

    Inside Titicaca Stores © Village Vanguard corporation, All rights reserved. P.27

  29. Slide 29: Titicaca ETHIC opened in Omotesando and Kyoto Teramachi

    Branding Strategy Titicaca ETHIC opened in Omotesando and Kyoto Teramachi to spread Titicaca store concept Shop Concept Become a bridge producers and consumers, and contribute to society by promoting ethical consumption Spread Info •Good location as info hub •Equipped with press room (Omotesando) •F

  30. Slide 30: Titicaca merchandise certified by Fairtrade (FLO)

    Titicaca merchandise certified by Fairtrade Labelling Organizations International (FLO) Fair trade: A trade system based on the principle of purchasing raw materials and products at a fair price. This enables producers and workers to improve their livelihoods and become self-reliant. The 30-year rel

  31. Slide 31: © Village Vanguard corporation, All rights reserved. P.30

    © Village Vanguard corporation, All rights reserved. P.30

  32. Slide 32: Titicaca - Results

    Titicaca - Results Income Sales result versus forecast: 99.8% Existing stores 100.0% (+1 million yen) Statement New stores 98.7% (-15 million yen) Wholesale/franchise 105.9% (+5 million yen) Recurring profit versus forecast: 96.9％ Titicaca Income Statement FY03/11 FY03/12 FY03/13 (Million Yen) Q1 Q2

  33. Slide 33: Titicaca - Results SG&A vs. Budget OP YoY

    Titicaca - Results SG&A vs. Budget OP YoY •OPM at 16.3% vs. 17.3% in Q3 FY03/12 +0.7% vs. budget (-14 million yen) •Ratio of corporate overhead to sales at 11.6% vs. 11.5% in (Million Yen) Q3 FY03/12 (Million Yen) Increase in demand for Increase in OP at new gift wrapping, and stores: +159 million y

  34. Slide 34: Titicaca - Results Comparable Store Sales Store Openings

    Titicaca - Results Comparable Store Sales +10.1% vs. Q3 FY03/12 (+48.6% for all store sales) Store Openings FY03/13 FY03/13 FY03/11 FY03/12 Results Results Plan Results Estimates Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Store 15 21 6 4 9 5 24 6 5 6 7 24 Openings Store 4 2 1 - - - 1 - 1 - 1 2 Closures © Village

  35. Slide 35: Growth Strategy

    Growth Strategy Hiring Strategy Allocate personnel costs in FY03/13 in line with Titicaca growth Strengthen hiring and staff training toward further growth © Village Vanguard corporation, All rights reserved. P. 34

  36. Slide 36: Village Vanguard Webbed

    Village Vanguard Webbed © Village Vanguard corporation, All rights reserved. P.35

  37. Slide 37: Company Overview (Village Vanguard Webbed)

    Company Overview (Village Vanguard Webbed) ↓Online shopping site Company name: Village Vanguard Webbed Corporation Shareholder: Village Vanguard Co., Ltd. (100%) Business: Online retailer, real estate media site operation Headquarters: 2-2-3 Shinyokohama, Kohoku-ku, Yokohama, Kanagawa (Relocated fro

  38. Slide 38: Village Vanguard Webbed - Results

    Village Vanguard Webbed - Results (Thousand Yen) ■ Sales YoY (Order Value Basis) FY05/13 PL (Results and Plan) Q1 Q2 Q3 Q4 (Results) (Results) (Results) (Plan) Sales 24,042 52,954 101,492 133,976 Vs. Plan (%) 94.8% 93.5% 101.0% - (Difference) （-1,332） （-3,657） （+971） GP 5,556 13,609 24,022 32,400 Vs

  39. Slide 39: Overseas Subsidiaries

    Overseas Subsidiaries © Village Vanguard corporation, All rights reserved. P.38

  40. Slide 40: Overseas Businesses

    Overseas Subsidiaries Overseas Businesses Village Vanguard Titicaca Japan Japan 393 stores (including franchises) 97 stores (including franchises) * As of end-February 2013 Increase Store Counts in Japan * As of end-February 2013 Enter overseas markets and increase store counts overseas ●September 2

  41. Slide 41: Company Overview (Village Vanguard Hong Kong)

    Village Vanguard (Hong Kong) Limited Company Overview Company Name: Village Vanguard (Hong Kong) Limited Shareholders: Village Vanguard Co., Ltd. (80%) Era-Bee Limited (20%) (Development of Japanese language education and culture-related businesses) Business: Retail sales exhibiting a fusion of book

  42. Slide 42: Village Vanguard (Hong Kong) Limited

    Village Vanguard (Hong Kong) Limited PL Inside Store FY05/13 Results (Thousand Yen) Q1 Q2 Q3 Sales 27,403 69,481 127,248 Vs. Plan -4,097 +9,693 +20,460 YoY Change -2,233 +17,089 +42,996 GP 11,075 4,989 25,526 Vs. Plan -1,524 -18,925 +5,613 YoY Change -2,045 -14,899 -7,923 OP -4,575 -35,049 -45,351 V

  43. Slide 43: Company Overview (Titicaca Hong Kong)

    TITICACA HONG KONG LIMITED Company Overview Company name: Titicaca Hong Kong Limited Shareholders: Village Vanguard Co., Ltd. (100%) Business: Import and sales of ethnic fashions and daily goods Headquarters: Room 1901, 19/F, Entrepot Centre, 117 How Ming Street, Kwun Tong, Kowloon Representative: H

  44. Slide 44: TITICACA HONG KONG LIMITED Results

    TITICACA HONG KONG LIMITED Results Inside Store ▼ Hong Kong Causeway Bay ▼ Hong Kong TSIM SHA FY05/13 Results (Thousand Yen) WTC TSUI Silvercord Q1 Q2 Q3 Net Sales 3,775 18,249 55,540 Vs. Plan +1,775 +10,249 +25,290 GP 2,182 10,879 33,327 Vs. Plan +904 +5,766 +14,778 OP -4,005 -6,300 -205 Vs. Plan +

  45. Slide 45: Company Overview (Village Vanguard Taiwan)

    Village Vanguard (Taiwan) Limited Company Overview Company name: Village Vanguard (Taiwan) Limited Shareholders: Village Vanguard Co., Ltd. (100%) Business: Retail sales exhibiting a fusion of books, SPICE (variety goods) and new media (CDs, DVDs, others) based on the idea of a “bookstore where you

  46. Slide 46: Village Vanguard (Taiwan) Limited Results

    Village Vanguard (Taiwan) Limited Results Inside Store FY05/13 Results (Thousand Yen) Q1 Q2 Q3 Sales 2,474 8,044 16,045 Vs. Plan -1,025 -235 -3,498 GP 878 -241 117 Vs. Plan -591 -677 -2,302 OP -10,535 -20,076 -28,646 の後ろ、 シンデ レ りん ご ラのリンゴみ あなたの後 の中に たい。 て。。 気を付けて 鍵、鍵 、 ジュエ ネックレス、 リー、小 コイン を置け 物、イヤ 、

  47. Slide 47: Village Vanguard

    2 VWUAGE! VaNGUARD

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