Vega Corporation Co., Ltd. · TSE:3542
Vega — Q1 FY2022 Earnings Presentation
42 slides from Vega's earnings presentation, August 2021
Slide 1: Quarterly Financial Results for the Three Months Ended June 30, 2021
For the Three Months Ended June 30, 2021 Quarterly Financial Results Vega corporation Co., Ltd. / Securities code: 3542 Copyright 2021 VEGA corporation. All Rights Reserved. 1
Slide 2: Agenda
1 Mid-term Management Policy Overview of Quarterly Financial Results 2 for the Three Months Ended June 30, 2021 3 Report on LOWYA Business 4 Report on DOKODEMO Business 5 Appendix Copyright 2021 VEGA corporation. All Rights Reserved. 2
Slide 3: Mid-term Management Policy
1 Mid-term Management Policy Copyright 2021 VEGA corporation. All Rights Reserved. 3
Slide 4: Overview of Business
Overview of Business Promote the two businesses by exercising the power of creative content and technological know-how acquired through LOWYA’s D2C business Core business R&D phase Products Furniture and interior Japanese products Know-how of Online marketing, SNS utilization, contents Creative cont
Slide 5: Business Model (LOWYA)
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 con
Slide 6: 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 Displayed in 5 Companies Orders languages, with a
Slide 7: Five-year Outlook
LOWYA Business Five-year Outlook Thorough strengthening of customer experience (CX) at the flagship store based on “membership” and “annual GMV per customer” as points Complete freedom in interior design VISION Five-year concept Thorough CX strengthening to meet customer needs Annual GMV per Two poi
Slide 8: Flagship Store Strategy
LOWYA Business Flagship Store Strategy Attract more customers Enhance product lineup Strengthen services Step up promotional activities and increase Enhance the lineup of other companies’ brands Realize LOWYA’s ideal customer experience to recognition to expand the number of visitors and enrich the
Slide 9: GMV Target
LOWYA Business GMV Target Strengthen CX to increase “membership” and “annual GMV per customer” at the flagship store and achieve high GMV* growth rates over a medium term Changes in GMV Flagship store (the Company’s PB and other companies’ brands） Mid-term target Long-term target Marketplace sto
Slide 10: Investment Policy
LOWYA Business Investment Policy Leverage cash flows arising from marketplace stores and the flagship store (the Company’s PB) and interest-bearing debts to execute active investments for the flagship store strategy Financing methods Investment areas – Operating CF from marketplace stores, a steady
Slide 11: Overview of Quarterly Financial Results for the Three Months Ended June 30, 2021
2 Overview of Quarterly Financial Results for the Three Months Ended June 30, 2021 Copyright 2021 VEGA corporation. All Rights Reserved. 11
Slide 12: Financial Highlight
Financial Highlight Progress has been solid against financial results forecasts Overview of GMV（LOWYA） 4,811 million yen (YoY: 90.6%) Company-wide GMV（DOKODEMO） 747 million yen (YoY: 292.2%) Results 1Q Net sales 4,519 million yen (YoY: -% *Due to application of new Revenue Recognition Standard from
Slide 13: Financial Results for the Three Months Ended June 30, 2021
Financial Results for the Three Months Ended June 30, 2021 Net sales: 4,519 million yen, Operating profit: 245 million yen (Million yen) Fiscal year ended Fiscal year ended Mar. 31, 2021 (New Revenue Fiscal year ending Mar. 31, 2021 Recognition Standard Mar. 31, 2022 YoY retrospectively applied) 1Q
Slide 14: Progress against Financial Results Forecast for FY ending March 2022
Progress against Financial Results Forecast for the Fiscal Year Ending March 31, 2022 Progress rate of approx. 25% was achieved against the lower forecast range for all indicators (Million yen) Progress rates Lower Upper 1Q results (against upper to lower forecast） forecast forecast Net sales 4,519
Slide 15: Progress of the Business Plan for the Fiscal Year Ending March 31, 2022
Progress of the Business Plan for the Fiscal Year Ending March 31, 2022 Emphasizing the mid-term expansion of GMV in LOWYA Business, execute additional investments in addition to expenditures necessary for normal business operation Net sales • Progressed within the initially forecasted range against
Slide 16: Quarterly Net Sales and Operating Profit
Quarterly Net Sales and Operating Profit Both net sales and profit progressed within the initially forecasted range against the full year financial results forecasts, despite a reactionary decline from the previous year (Million yen) ■ Net sales Net sales ■ Operating profit Operating profit (Left) (
Slide 17: Quarterly SG&A Expenses Ratio
Quarterly SG&A Expenses Ratio (against Net Sales) Both variable costs and fixed costs progressed stably （％） 55.6 56.1 55.3 54.4 54.2 55.3 ■ Advertising expenses 2.0 52.2 2.7 3.0 2.6 50.3 2.2 1.9 3.4 1.3 51.0 49.8 ■ R&D expenses, etc. *1 2.9 2.6 2.0 1.7 3.4 48.7 48.1 2.2 0.6 5.0 2.5 4.7 5.4 ■ Fixed c
Slide 18: Balance Sheet
Balance Sheet A sound financial foundation is maintained. Inventory levels are trending toward recovery (Million yen) As of March 31, As of June 30, As of March 31, As of June 30, 2021 2021 2021 2021 Current assets 6,892 6,062 Current liabilities 3,023 2,316 Cash and deposits 3,028 2,046 Debt obliga
Slide 19: Report on LOWYA Business
3 Report on LOWYA Business Copyright 2021 VEGA corporation. All Rights Reserved. 19
Slide 20: Quarterly GMV and Net Sales
LOWYA Business Quarterly GMV and Net Sales Despite a reactionary decline from the previous year, both GMV and net sales progressed steadily (Million yen) ■GMV GMV ■ Net sales Net sales GMV 90.6% YoY Net sales YoY 86.2% 6,000 5,312 5,000 5,138 4,963 4,811 4,655 4,474 4,326 4,428 4,263 4,013 4,000 3,5
Slide 21: Quarterly GMV by Sales Channel
LOWYA Business Quarterly GMV by Sales Channel GMV of the flagship store increased year on year. While the flagship store remained the main sales channel, GMV of marketplace stores decreased due to a reactionary decline from the previous year (Million yen) Flagship store Marketplace stores Flagship s
Slide 22: Monthly GMV at Flagship Store
LOWYA Business Monthly GMV at Flagship Store Flagship store was in the same level in April and May of the previous year, in which demand surged due to the COVID-19 pandemic. Achieved a significant year-on-year increase in GMV in June (up 16.3% YoY) (Million yen) FY2021 FY2022 YoY 1,100 1,036 1,035 1
Slide 23: Company-wide Monthly GMV
LOWYA Business Company-wide Monthly GMV For the overall LOWYA Business (flagship store＋marketplace stores), achieved a year-on-year increase in GMV in June (Million yen) FY2021 FY2022 YoY 1,988 2,000 1,915 1,800 1,756 1,725 1,719 1,677 1,621 1,575 1,573 1,600 1,479 102.1% 1,369 1,379 1,402 1,400 88.
Slide 24: Cost of Sales Ratio and Delivery Expense Ratio
LOWYA Business Cost of Sales Ratio and Delivery Expense Ratio (vs. GMV) Although continuous cost reductions have proven effective and delivery expense ratio further declined, cost of sales ratio is increasing due to rising marine containers transportation costs and raw material purchase costs couple
Slide 25: Introduction of New Products
LOWYA Business Introduction of New Products Continue offering design- and trend-conscious new products as in the previous fiscal year Copyright 2021 VEGA corporation. All Rights Reserved. 25
Slide 26: Collaborative Programs with Other Companies
LOWYA Business Collaborative Programs with Other Companies Through collaborations with other companies, enhance product lineup of the Company’s PB by adding products with tastes that LOWYA has not dealt in so far NO COFFEE Côté jardin TS2TB The first collaboration with NO COFFEE, a coffee Côté Jardi
Slide 27: Enhance Product Lineup
LOWYA Business Enhance Product Lineup Greatly expand the number of products of other companies’ brands we handle within a year, aiming to boost net sales through inventory stabilization We plan to accelerate expanding the number of items after system modifications and operational reviews, which have
Slide 28: LOWYA Day Promotional Events
LOWYA Business LOWYA Day Promotional events are held on LOWYA Day (June 8) Daily turnover at the flagship store increased by % from the same day last year, representing a 95 significant year-on-year growth in our capacity for attracting customers Daily turnover at the flagship store on LOWYA Day (Mi
Slide 29: KPI of the Flagship Store (Membership)
LOWYA Business KPI of the Flagship Store (Membership) With the acquisition of new members, total membership* of the flagship store has been increasing steadily Total membership of the flagship store （People） 1,000,000 931,249 851,355 771,318 800,000 668,878 710,336 557,391 600,000 502,438 466,340 43
Slide 30: 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 to repeat members GMV by member type (LTM*） (Million yen) Repeat members New members Guest purchasers Repeat member order ratio （％） 20% 12,000 1
Slide 31: KPI of the Flagship Store (Average Basket Value)
LOWYA Business KPI of the Flagship Store (Average Basket Value） Average basket value has been steadily progressing Average basket value (exclusive of tax) (LTM*） Members Guest purchasers （Yen） 30,000 24,963 25,392 25,089 24,486 25,000 24,055 23,566 23,349 23,168 23,091 20,000 20,574 20,799 20,743 20
Slide 32: Report on DOKODEMO Business
4 Report on DOKODEMO Business Copyright 2021 VEGA corporation. All Rights Reserved. 32
Slide 33: DOKODEMO Business Management Indicators
DOKODEMO Business Management Indicators While membership 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 June 30, 2020 June 30, 2021 GMV（million yen） 255 747 292.2% Membership (thousan
Slide 34: DOKODEMO Business GMV
DOKODEMO Business GMV GMV grew by 192.2% YoY Repeat customer GMV remained high, accounting for 68.5% (Million yen) Repeat customer GMV New customer GMV Ratio of repeat customers Up 192.2% 800 747 100.0% 635 604 235 80.0% 600 68.5% 66.2% 226 64.8% 64.9% 64.7% 64.9% 61.4% 64.4% 57.2% 56.2% 465 260 60.
Slide 35: DOKODEMO Business Upfront Investment Amount
DOKODEMO Business Upfront Investment Amount GMV has been expanding smoothly, while saving the upfront investment level (net expenditure of this business). Transactions are projected to further increase by retaining repeat customers and acquiring new customers efficiently. (Million yen) ■ GMV ■ Upfro
Slide 36: Ratio of GMV by Delivery Destination Area
DOKODEMO Business Ratio of GMV by Delivery Destination Area Deliveries to Asia, primarily Taiwan, account for 90% of GMV By region By country Middle East 0.4％ Oceania 1.3％ Latin America Europe 0.03％ UK 2.5% North America Africa 0.02％ 0.5％ South Korea 2.7％ US 0.7％ Hong Kong 2.6％ Taiwan 7.5％ 80.6％ Mal
Slide 37: Appendix
5 Appendix Copyright 2021 VEGA corporation. All Rights Reserved. 37
Slide 38: Market Scale
LOWYA Business Market Scale Target market is forecast to expand driven by “Rise in MD coverage ratio” x ”Increase in e-commerce market penetration,” which presents significant room for growth Field for further exploration (Merchandise in general acceptable to LOWYA users in the fields of food, cloth
Slide 39: Positioning
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 Antique overseas furniture High-quality furniture Trendy area standard Traditional furniture furniture Select fashionabl
Slide 40: 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 14％ 40 to 49 29 and 18％ younger 44％ 9％ Kanto Female 41％ Tokai 30 to 39 56％ 8
Slide 41: 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 ■ Middl
Slide 42: 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