Vision Inc

TSE:9416

Earnings Call Analysis

Vision Inc. Q3 Earnings Soar with Strong Sales

In Q3, Vision Inc.'s impressive performance featured a net sales increase of 29.6% to JPY 23.953 billion and a net income boost of 97.9% to JPY 2.514 billion. The global WiFi business held steady, while the information and communications service business spiked in sales to JPY 9.278 billion. The launch of Vision Hikari service marked a shift to recurring revenue. The Glamping and Tourism business surged to JPY 689 million, enjoying high margins and positive customer feedback. Despite not leading in all categories, the company excelled in luxury Onsen categories and innovated with a new Onsen Ryokan Glamping facility. With investment plans set for Q4, Vision Inc. is steered towards further growth in 2024 and 2025, building on strengths distinct from those in 2019.

Vision Inc. Financial Performance Overview

- Net sales surged by 29.6% to JPY 23.953 billion. - Operating income increased by 90.7% to JPY 3.717 billion. - Net income attributable to shareholders rose by 97.9% to JPY 2.514 billion.

Performance by Business Segments

- Global WiFi Business: Stable net sales of JPY 13.933 billion with profits exceeding last year. - Information and Communications Service Business: Net sales grew to JPY 9.278 billion with segment income at JPY 929 million. - Gross Profit from Stock Earnings: Steady growth observed. - Glamping and Tourism Business: Revenue surged to JPY 689 million with an 11% profit margin.

Strategic Initiatives and Future Outlook

- Introducing a new business model with the Vision Hikari service. - Recognition and expansion in the Glamping and Tourism sector. - Launch of Onsen Ryokan Glamping facility.

Conclusion

Vision Inc. showcases robust financial performance, emphasizing growth, profitability, and strategic business initiatives. Future focus on investments to drive continued expansion and success.

Earnings Call Transcript 2023-Q3

[佐野 健一, executive]

Hello, everyone. I am Sano of Vision Inc. here to present our financial results for the third quarter of the fiscal year ending December 31, 2023.

Let me begin with an overview of the third quarter of the consolidated fiscal year 2023. First of all, net sales increased significantly by 29.6% from JPY 18.478 billion to JPY 23.953 billion. Operating income increased from JPY 1.949 billion to JPY 3.717 billion, a significant increase of 90.7%. Net income attributable to shareholders of the parent company increased from JPY 1.27 billion to JPY 2.514 billion, also a significant increase of 97.9%.

Next, I would like to report on the performance of the global WiFi business. Net sales totaled JPY 13.933 billion, close to last year's figure. Profits already exceeded last year with a total of JPY 4.056 billion. In comparison to 2019 because of the decreased number of flights, the number of outbound rentals is 52.6% of the total. Sales are at 87.2%, which is much higher than the number of rentals. Inbound sales are significantly higher than in 2019, with 177.8% of the total number of rentals and 187.7% of the total sales.

Next, the performance trend of the information and communications service business. Net sales increased significantly from last year to JPY 9.278 billion. Segment income is also up, reaching JPY 929 million. Sales are also strong, and we are in the process of continuing to increase the number of sales personnel while simultaneously expanding sales. We also continue to focus on expanding sales of our monthly subscription-based service. So lifetime value is also growing.

Next, gross profit from stock earnings. It is also growing steadily. Since we started the Vision Hikari service this September, we have already started efforts to further strengthen our stock in the next fiscal year and beyond. Let me explain the details of the Vision Hikari service that we launched this September. This was previously a onetime revenue business, but now we have added a new business model in which revenue is accumulated in monthly installments through medium- to long-term transactions with our customers.

Next, the performance of the Glamping and Tourism business. It went up significantly to JPY 689 million from JPY 225 million last year due to the addition of Lake Yamanaka as the destination. The segment income was JPY 76 million, and the profit margin was 11%, which is very favorable.

Let me share some info from the Glamping and Tourism business. The results of the General Election 2023 for Onsen Inns and Hotels, in which the Japan Tourism Agency and 5 other ministries and agencies invited entries from all over Japan announced the rankings on October 26. Last year, we were first placed in Japan in the private bath, sauna and pet-friendly categories. Sadly, we came in second in the skin care category. But the quality of Koshika no Onsen hot spring is our main selling point and this was proved by our many new and repeat customers who voted for us. This enabled us to win first place in all 4 categories for the first time.

To create a new category for the glamping and tourism business, we have created a new facility called Onsen Ryokan Glamping, a classic Ryokan hotel with a glamping facility attached. There are open-air baths, cold water baths, saunas, bonfires and barbecues. It is still a conventional hot spring Ryokan but with many fun activities, allowing children and even dogs. We are looking forward to the future of this facility.

Thank you for taking the time today to watch our financial results. We have been performing well through the third quarter. I believe that we have acquired a different set of strengths over the past 3 years than we had in 2019 when we achieved record profits. However, it will be important to make solid investments in the fourth quarter to achieve even greater growth in 2024 and 2025. And all of our employees will work hard to commit to achieving these results. I hope that all shareholders will continue to support us. Thank you very much for watching today.