Vision Inc

TSE:9416

Earnings Call Transcript 2022-Q1

[佐野 健一, executive]

Hello, everyone. I'm Sano from Vision Inc. Today, I would like to explain the financial results for the first quarter of the fiscal year ending in December 2022. First of all, I would like to summarize the financial results for the first quarter of the fiscal year ending in December 2022. Sales increased by 42.4% from JPY 3.938 billion last year to JPY 5.609 billion. The operating profit increased by 41.3% from JPY 285 million to JPY 403 million. Quarterly net income attributable to owners of the parent increased from $232 million to JPY 245 million. Next to the causes for increase in operating profit. Sales increased by JPY 1.670 billion. Cost of sales increased by JPY 1.302 billion. Due to efficient management of advertisement and sales management expenses, operating profit was JPY 4.030 billion. I will explain more about the details for each segment.

I will move on to the performance trends of our GLOBAL WiFi business. To make profit, we are meeting the various needs for usage and implementing initiatives for coexisting with the COVID-19 pandemic situation. Among the various initiatives towards business growth in the post-COVID-19 pandemic environment, GLOBAL WiFi for Biz can be used by customers both in Japan and abroad and has continued to have sales throughout the pandemic. For individual customers, it is often used during hospitalization, moving remote work, business trips and events as well as when the connection used within the family home has bandwidth issues. In addition, sales and profits are increasing, thanks to contract business at airports and PCR testing. Last year, it was JPY 1.515 billion, and now it is JPY 2.618 billion. Profit has also grown substantially from JPY 117 million to JPY 359 million. Next to the performance trends of the Information and Communication Service business. Our strength is in having several businesses and sales channels, and this allows us to capture various needs. Another strength is our ability to flexibly handle changes in the external environment. The information and communications service business has various products. And this leads to difficulties in procurement, such as the recent low supply of semiconductor tubes. Although we have not been significantly impacted due to the size of our business. However, by shifting personnel to other businesses if we have slightly slower sales and enabling our salespeople to handle multiple products, we are strengthening our business. Having our employees experience various projects should be an advantage in the future, and it would be to our great advantage to be able to handle various changes brought by the times. As I will explain later in the section for recurring revenue, we are shifting our business towards a subscription-based model. Although sales increased from JPY 2.357 billion to JPY 2.875 billion, we are implementing initiatives to increase profit in total in the medium to long term, and it decreased from JPY 410 million to JPY 347 million.

Next, the issuance of paid stock options was decided upon at the Board meeting on March 1. It will be JPY 800 per stock, and the targets are our company's executives, employees and 32 subsidiary companies' executives. If operating profit exceeds JPY 4 billion in any of the fiscal years between the one ending in December 20 and December 2025. The exercisable ratio will be 50%. Additionally, if operating profit exceeds $5 billion in any of the fiscal years between the one ending in December 2023 and December 2027. The exercisable ratio will be 100%. The executives to which the suppliers are putting an extra effort to be able to receive this.

I will now move on to our glamping business. I have talked about this third pillar of our business that we are in the process of growing. We are starting our glamping business, Vision Glamping, Resort & Spa as our third pillar after the information and communications business and GLOBAL WiFi business. As the first site, we have opened a Glamping facility in Kirishima City, Kagoshima Prefecture at Koshikano Onsen, which has been popular and known for its good water quality for over 40 years. All rooms are private and have an open-air hot spring bath with water drawn directly from the Hot Spring source, which is the first of its kind in Japan. We have added highly satisfactory bath features, tent sauna, water-baths and open-air baths with water directly from the Hot spring source, and many guests have been enjoying the facility. As our second site, we have chosen Lake Yamanakako, Yamanashi Prefecture. This is the perfect location of see Mount Fuji, left by old Japanese. We believe it is a very favorable sign because there are many activities to do around Lake Yamanakako. This location offers many more purposes of travel than just staying for the night and various combinations of activities are possible. Currently, we are working on the construction of the Glamping facility, which is scheduled to open around this summer. You can see the facility in the image.

Next to the performance trends of recurring revenue and gross profit of our in-house services. We are working towards building our in-house services more to increase recurring revenue, which should be a long-term stable revenue foundation. Currently, our in-house services themselves amounted to JPY 670 million and agency business to JPY 340 million as of the end of last year. In the first quarter, our in-house services amounted to JPY 190 million and recurring revenue to JPY 70 million, showing steady progress. This concludes my presentation on the financial results for the first quarter. In the first quarter, as in the previous year, I believe that each member has continued to work diligently to achieve good results. However, continuity is extremely important, and all of us will work hard together to deliver good results and meet the expectations of our shareholders. I would appreciate your continued support. Thank you.