Vision 9416

ビジョン

Recent Updates

2021-11-29

Opening of Shinjuku PCR Center Higashiguchi

2021-11-18

Making Koshikano Onsen a wholly owned subsidiary

2021-11-10

Q3 FY12/21 flash update

Get in touch

5F Shinjuku i-Land Tower, 6-5-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo

https://www.vision-net.co.jp/

03-5325-0344

Summary

Vision has two main businesses: Global WiFi, in which it rents out mobile WiFi routers, and Information and Communications, in which it provides telecommunications services and sells office equipment. Since its launch in 2012, the Global WiFi business has been increasing its share of both sales and profits. Vision is the largest of the top three Japanese companies that rent out mobile WiFi routers for use overseas, with a market share of more than 40% by sales.

Wireless Telecommunication Services

Key dates

2016-09-01

Coverage initiation

Full Report

2021-11-29

Q3 FY12/21 flash update

2021-11-10

Q2 FY12/21 flash update

2021-08-11

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Executive summary

Business overview

Vision has two main businesses: Global WiFi, in which it rents out mobile WiFi routers, and Information and Communications Service, in which it provides telecommunications services and sells office equipment. Global WiFi accounted for 44% of sales and -9% of operating profit in FY12/20 (65% and 75% in FY12/19), and Information and Communications Service accounted for 53% of sales and 147% of operating profit in FY12/20 (33% and 31% in FY12/19). From its launch in 2012 through FY12/19, Global WiFi’s share of sales and operating profit had been growing, but in FY12/20 it was hit by the COVID-19’s impact on outbound and inbound demand, which were reduced to essentially zero.

In the Global WiFi business, Vision rents out mobile WiFi routers* to both outbound (Japanese travelers going overseas) and inbound (people visiting Japan) travelers. The company procures mobile network access directly from telecommunications companies in Japan and abroad, enabling it to offer high-quality internet services at low prices. In FY12/20, 65.5% of rental customers (overseas contracts) were individuals (roughly 63% in FY12/19), and 34.5% were companies (roughly 37%). 46.4% (roughly 45% in FY12/19) were new customers and 53.6% (roughly 55%) were repeat customers. In FY12/20, the company rented out approximately 960,000 routers (2,830,000 in FY12/19). 640,000, or roughly two-thirds, were for use in Japan (590,000, or 21%).

*Wireless LAN (WiFi) routers enable direct connection to mobile networks on the go via smartphones, tablets, laptops, or game consoles.

In the Information and Communications Service business, the company mainly targets new businesses (startups). It arranges telephone lines and other information and communication services, and sells office equipment. Main sources of revenue: equipment sales, commissions from telecommunications companies, and revenue from office equipment maintenance. The company initially provides equipment at low prices, aiming to grow revenue per customer by expanding the number of services provided in line with customers’ growth. Under this business model, most revenues are recurring monthly revenues (monthly fee revenue on the company’s proprietary DX services is also growing). The company’s marketing activities focus on customers who have demonstrated interest by reaching out to the company, and leverage customer referrals from other divisions as well as web marketing, call centers, and a Customer Loyalty Team (CLT; supporting existing customers). Marketing can be seen as effective: for example, sales of copiers per salesperson were roughly four times the industry average.

Vision celebrated its 25th anniversary in June 2020. There are now 400,000 companies using its services (as of May 31, 2020) and an aggregate 15mn individual customers using its Wi-Fi router rental service (as of August 2020).

Trends and outlook

In FY12/20, sales were JPY16.7bn (-39.0% YoY), operating profit was JPY104mn (-96.9% YoY), recurring profit was JPY228mn (-93.2% YoY), and net loss attributable to owners of the parent was JPY1.2bn (net income of JPY2.2bn in FY12/19). Results were in line with the revised forecasts announced on November 9, 2020. While the Global WiFi business was hit by the effects of the COVID-19 pandemic, the Information and Communications Service business generally did well, and maintained operating profitability even amid the pandemic (the company effectively diversified its risks).

The company’s FY12/21 forecast (revised on August 10, 2021) calls for full-year sales of JPY17.5bn (+4.9% YoY), operating profit of JPY1.0bn (+869.2% YoY), recurring profit of JPY1.0bn (+351.0% YoY), and net income attributable to owners of the parent of JPY685mn (net loss of JPY1.2bn in FY12/20). The company had previously withdrawn its full-year forecast and said it was "undetermined" as it was difficult to properly and rationally calculate the impact of the COVID-19 pandemic, but released the forecast on August 10, 2021, based on available information and projections. The forecast for the Global WiFi business reflects efforts to tap into solid domestic demand and projected growth in contract numbers for Global WiFi for Biz, a permanent internal mobile WiFi router for corporate customers. The company forecast released on February 15, 2021 assumed that overseas traveler numbers in Q4 would recover to 25% of Q4 2019 numbers*. The forecast excludes temporary contract work provided during the pandemic from Q4 onward due to uncertainty about its continuity. The forecast for the Information and Communications Service business reflects current strength and growth in in-house services (monthly subscription). The forecast also incorporates the launch of Vision Denki (drags of JPY26mn on sales and JPY166mn on operating profit).

*When the company announced its Q3 results on November 9, 2021, it left its full-year forecast unchanged while revising its forecast for the timing of demand recovery in the Global WiFi business as follows.

Although cumulative Q3 FY12/21 profits exceeded the company's full-year forecast, the forecast remains unchanged from the revision announced on August 10, 2021. When calculating the full-year forecast, the company expected to see a partial recovery in demand from Q4 in its Global WiFi business. As of November 9, 2021, however, the company revised this forecast to a delay of about six months. Meanwhile, Vision continues to capitalize on domestic WiFi demand and other factors to steadily increase its earnings. There are no significant changes in the Information and Communications Service business.

Although the company does not release a medium-term plan, it has been expanding its operations with the Global WiFi business serving as a growth driver and the Information and Communications Service business acting as a stable source of growth, based on its stance of achieving sustained high profit growth while making investments. The company is aiming to expand earnings by leveraging its experience and expertise (customer acquisition through the combination of online marketing, sales, and its Customer Loyalty Team, along with inter-business synergies and recurring-revenue business model) while investing proactively. In the two existing businesses—Global WiFi business and Information and Communications Service business—Vision will endeavor to further improve productivity by utilizing online business negotiations and other means. Additionally, the company will further strengthen up-selling and cross-selling, and brush up the profit structure while strengthening and expanding its in-house proprietary services. The company also aims to develop a third business pillar by leveraging its customer base, sales channels, and business structure.

Strengths and weaknesses

Shared Research believes that Vision has three strengths: a niche market focus, an efficient marketing model using web marketing, and direct network access from major telecom carriers that allows it to provide high-quality internet service at low prices. Weaknesses: little technological differentiation, limited time to prove itself to clients, and relationships with telecom carriers in the Information and Communications Service business. (See Strengths and Weaknesses section for details.)

Key financial data

Income statement		FY12/11	FY12/12	FY12/13	FY12/14	FY12/15	FY12/16	FY12/17	FY12/18	FY12/19	FY12/20	FY12/21
(JPYmn)		Parent	Parent	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Est.
Sales		6,999	6,527	9,204	10,185	12,485	14,844	17,555	21,504	27,318	16,654	17,468
	YoY	8.3%	-6.7%	41.0%	10.7%	22.6%	18.9%	18.3%	22.5%	27.0%	-39.0%	4.9%
Gross profit				5,199	5,652	6,910	8,622	10,161	12,650	15,690	8,794
	YoY			-	8.7%	22.3%	24.8%	17.8%	24.5%	24.0%	-44.0%
	Gross profit margin			56.5%	55.5%	55.3%	58.1%	57.9%	58.8%	57.4%	52.8%
Operating profit				10	286	805	1,290	1,789	2,484	3,325	104	1,007
	YoY			-	2,742.1%	181.2%	60.3%	38.6%	38.9%	33.8%	-96.9%	869.2%
	Operating profit margin			0.1%	2.8%	6.4%	8.7%	10.2%	11.6%	12.2%	0.6%	5.8%
Recurring profit		57	285	30	324	808	1,298	1,795	2,500	3,359	228	1,028
	YoY	-83.5%	399.6%	-89.5%	987.9%	149.3%	60.8%	38.3%	39.3%	34.4%	-93.2%	351.0%
	Recurring profit margin	0.8%	4.4%	0.3%	3.2%	6.5%	8.7%	10.2%	11.6%	12.3%	1.4%	5.9%
Net income attributable to owners of the parent		1	-216	75	275	585	814	1,209	1,529	2,226	-1,184	685
	YoY	-99.1%	-	-	264.9%	112.6%	39.0%	48.5%	26.5%	45.6%	-	-
	Net margin	0.0%	-3.3%	0.8%	2.7%	4.7%	5.5%	6.9%	7.1%	8.1%	-7.1%	3.9%
Per-share data (split-adjusted; JPY)
Shares issued (year-end; '000)		33,858.0	35,427.0	35,427.0	35,427.0	48,712.2	48,712.2	48,834.0	48,834.0	49,027.2	49,027.8
EPS		0.04	-6.20	2.13	7.77	16.32	16.71	24.77	31.40	46.05	-25.07	14.55
Dividend per share		-	-	-	-	-	-	-	-	-	-	-
Book value per share		43.63	43.02	22.28	26.81	66.68	75.05	175.40	200.95	226.80	185.79
Balance sheet (JPYmn)
	Cash and cash equivalents	-	-	1,328	1,546	5,774	6,242	6,256	7,563	8,485	6,650
Total current assets		-	-	2,835	2,777	7,404	8,130	8,995	10,455	11,792	8,872
Tangible fixed assets		-	-	70	229	282	481	859	1,072	1,200	343
Investments and other assets		-	-	458	626	516	901	1,038	1,541	1,515	1,901
Intangible assets		-	-	319	286	327	423	591	677	667	197
Total assets		2,962	3,283	3,683	3,917	8,528	9,935	11,484	13,552	15,174	11,313
	Short-term debt	-	-	328	313	27	37	22	2	40	16
Total current liabilities		-	-	1,879	1,904	2,019	2,600	2,895	3,749	4,222	2,508
	Long-term debt	-	-	213	100	13	23	2	0	38	31
Total fixed liabilities		-	-	225	113	13	23	2	0	46	36
Total liabilities		-	-	2,104	2,017	2,032	2,623	2,897	3,749	4,268	2,544
Total net assets		1,477	1,524	1,579	1,899	6,496	7,312	8,586	9,803	10,905	8,769
Total interest-bearing debt		-	-	541	413	40	60	25	2	78	46
Statement of cash flows (JPYmn)
Cash flows from operating activities		-	-	317	553	799	1,493	1,617	2,889	3,550	-396
Cash flows from investing activities		-	-	83	-312	-629	-473	-1,416	-1,458	-1,436	-375
Cash flows from financing activities		-	-	26	-128	3,667	-38	-8	-312	-1,165	-1,036
Financial ratios
ROA (RP-based)		2.0%	9.1%	0.9%	8.5%	13.0%	14.1%	16.8%	20.0%	23.4%	1.7%
ROE		0.1%	-	5.0%	15.8%	13.9%	11.8%	15.2%	16.7%	21.5%	-12.1%
Equity ratio		49.9%	46.4%	42.9%	48.5%	76.2%	73.6%	74.6%	72.2%	71.7%	77.3%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Consolidated data from FY12/13
Note: The company issued a 100-for-1 stock split in December 2014, a 2-for-1 stock split in July 2017 and a 3-for-1 stock split on October 1, 2019. Per share data have been retroactively restated.

Segment earnings

Performance by segment		FY12/13	FY12/14	FY12/15	FY12/16	FY12/17	FY12/18	FY12/19	FY12/20
(JPYmn)		Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.
Sales		9,204	10,185	12,485	14,844	17,555	21,504	27,318	16,654
	Global WiFi	1,887	3,756	6,035	7,882	10,392	13,506	17,733	7,278
	Information and Communications Service	7,312	6,411	6,440	6,948	7,104	7,774	8,955	8,797
	Other	5	18	10	13	58	224	631	579
YoY			10.7%	22.6%	18.9%	18.3%	22.5%	27.0%	-39.0%
	Global WiFi		99.0%	60.7%	30.6%	31.8%	30.0%	31.3%	-59.0%
	Information and Communications Service		-12.3%	0.5%	7.9%	2.2%	9.4%	15.2%	-1.8%
	Other		278.7%	-46.9%	33.5%	345.8%	283.8%	181.5%	-8.1%
% of total		100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
	Global WiFi	20.5%	36.9%	48.3%	53.1%	59.2%	62.8%	64.9%	43.7%
	Information and Communications Service	79.4%	62.9%	51.6%	46.8%	40.5%	36.2%	32.8%	52.8%
	Other	0.1%	0.2%	0.1%	0.1%	0.3%	1.0%	2.3%	3.5%
Operating profit		10	286	805	1,290	1,789	2,484	3,325	104
	Global WiFi	-184	180	594	1,141	1,593	2,414	3,302	-91
	Information and Communications Service	566	724	904	1,025	1,173	1,219	1,363	1,520
	Other	-8	8	-12	-54	-103	-194	-267	-393
	Adjustment	-364	-626	-681	-821	-874	-954	-1,073	-933
YoY			2,741.8%	181.2%	60.3%	38.6%	38.9%	33.8%	-96.9%
	Global WiFi		-197.8%	230.5%	92.2%	39.7%	51.5%	36.8%	-
	Information and Communications Service		27.9%	24.8%	13.4%	14.4%	3.9%	11.9%	11.5%
	Other		-	-	-	-	-	-	-
Operating profit (excl. adjustments)		0.1%	2.8%	6.4%	8.7%	10.2%	11.6%	12.2%	0.6%
	Global WiFi	-9.7%	4.8%	9.8%	14.5%	15.3%	17.9%	18.6%	-1.2%
	Information and Communications Service	7.7%	11.3%	14.0%	14.7%	16.5%	15.7%	15.2%	17.3%
	Other	-	45.8%	-	-	-	-	-	-
% of OP (incl. adjustments)		100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
	Global WiFi	-49.1%	19.7%	40.0%	54.0%	59.8%	70.2%	75.1%	-8.7%
	Information and Communications Service	151.3%	79.4%	60.8%	48.5%	44.0%	35.4%	31.0%	146.6%
	Other	-2.2%	0.9%	-0.8%	-2.6%	-3.9%	-5.6%	-6.1%	-37.9%
Global WiFi usage		FY12/13	FY12/14	FY12/15	FY12/16	FY12/17	FY12/18	FY12/19	FY12/20
(units)		Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.
Total		241,737	516,199	783,050	1,144,045	1,650,969	2,231,775	2,830,000	960,000
	Overseas use	223,706	462,953	648,475	886,824	1,302,646	1,759,514	2,160,000	300,000
	Domestic use	7,511	35,512	90,906	190,665	285,708	407,517	590,000	640,000
	Overseas business (excl. domestic use)	10,520	17,734	43,669	66,556	62,615	64,744	70,000	10,000

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.

Recent updates

Opening of Shinjuku PCR Center Higashiguchi

2021-11-29

On November 29, 2021, Vision Inc. announced the opening of Shinjuku PCR Center Higashiguchi.

The company opened the Shinjuku PCR Center Higashiguchi on November 29, 2021 to provide PCR testing services until September 30, 2022.

Opened in collaboration with Idogojusantsugi Clinic, the PCR center is the first of the company's efforts to provide various services related to PCR testing, an essential part of social infrastructure services for during and after the COVID-19 pandemic.

Background to the launch of the service

Vision has many customers in its Global WiFi business and Information and Communications Service business for corporate clients, as well as in its travel-related services. Through utilizing its extensive customer base and expertise in providing services and operating stores as well as in back-office operations including product shipping, the company intends to provide PCR testing services with enhanced convenience.

Idogojusantsugi Clinic specializes in infection prevention, and based on its track record of conducting numerous PCR tests, has diagnosed and treated COVID-19 patients during the pandemic. Through the collaboration with the company, the clinic will be able to provide reliable and accurate test results to even more people. The two parties will build a framework for quick and affordable testing and results notification with the aim of establishing a highly convenient service fit to be social infrastructure for during and after the pandemic.

Features

Provision of a seamless service from testing to diagnosis
Testing service that combines Idogojusantsugi Clinic's track record in providing PCR tests and diagnoses and the company's expertise in service operations and marketing
Reliable test results based on real-time PCR
Notification of results on the day after testing in principle; results can be notified as early as on the same day

Making Koshikano Onsen a wholly owned subsidiary

2021-11-18

On November 17, 2021, Vision Inc. announced its plan to acquire all shares in Koshikano Onsen K.K. to make the latter a wholly owned subsidiary.

Vision has been making various preparations toward the launch of a glamping business in 1H FY12/22. The company has positioned the glamping business to become its third main driver of growth following the Information and Communications Service and Global WiFi businesses.

Koshikano Onsen is a Japanese-style inn located in Hayato-cho, Kirishima, Kagoshima Prefecture with baths sourced from an artesian hot spring known to have Bihada-no-Yu (hot spring for beautiful skin) water quality. The inn provides this quality hot spring water to all guest rooms and also has a glamping facility.

For its glamping business, the company is preparing facilities where visitors can feel one with nature, one of the appeals of camping, in a dome-shaped tent designed to put much importance on privacy. Vision has deemed that Koshikano Onsen has the potential to drive growth of its glamping business as the hot spring inn is equipped with the kind of facility the company is envisioning, and hence has decided to acquire its shares. The share acquisition is scheduled to take place on January 1, 2022.

Making adval Corp. a subsidiary through share delivery

2021-10-18

At a Board of Directors meeting held on October 18, 2021, Vision Inc. resolved to execute a share delivery scheme, created on the same day, under which Vision will become the parent company and adval Corp. (unlisted) will become a subsidiary. The share delivery will be executed using treasury stock and will not involve the issuance of new shares.

Reasons for making adval a subsidiary through a share delivery

The Vision group operates the Global WiFi business, which creates an environment allowing people all over the world to use the Internet easily and with peace of mind, and the Information and Communications Service business, which provides communications infrastructure in line with the growth stages of client companies. Vision's goal is to become a company contributing to the world through these businesses. As the COVID-19 pandemic continues, the economic environment impacting the group remains severe both in Japan and overseas. However, the company is working to minimize such impact by reducing costs and moving quickly to review its business portfolio, focusing in particular on the Information and Communications Service business and the Wi-Fi business in Japan.

adval was founded in 2008 and is developing a sublease business and a flexible office business as part of its space management operations. In its flexible office business, adval operates Office Ticket, which is the industry’s first monthly flat-rate conference room accommodating new working styles. adval aims to maximize its corporate value and expand its business by generating revenue through the utilization of conference rooms, even for a limited period of time, in buildings that are vacant or have vacancies due to evictions or reconstruction.

Through the stock delivery, Vision expects to expand its Information and Communications Service business and the customer base of adval, grow sales by leveraging the accumulated expertise of both companies, improve purchasing efficiency, and reduce costs. The company decided to make adval a subsidiary on the assumption that the action would contribute to enhanced corporate value for both companies over the medium to long term.

Summary of the share delivery

Resolution regarding the share delivery by the Board of Directors: Monday, October 18, 2021
Scheduled application deadline for share transfer by adval: Friday, November 12, 2021
Scheduled date of the share delivery (effective date): Wednesday, December 1, 2021

Number of shares to be acquired, acquisition price, and number of shares before and after the acquisition

Common shares held before delivery: 1,500
Number of common shares to be acquired: 94,809
Acquisition price: JPY656mn
Common shares held after delivery: 96,309 (number of shares held with voting rights: 96,309, voting rights ratio: 50.00%)

Accounting overview

The company expects to treat the share delivery as an acquisition based on the accounting standards for business mergers and acquisitions. The amount of goodwill (or negative goodwill) generated by the share delivery has not yet been determined.

Future outlook

The company expects the share delivery to have a minimal impact on its FY12/21 consolidated earnings, but stated that should there be an impact moving forward that requires disclosure, it would promptly make an announcement to that effect.

Trends and outlook

Quarterly trends and results

Quarterly		FY12/19				FY12/20				FY12/21
(JPYmn)		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Sales		6,470	6,467	7,610	6,771	5,989	3,641	3,478	3,546	3,939	4,706	4,747	-
	YoY	31.4%	31.1%	27.7%	19.1%	-7.4%	-43.7%	-54.3%	-47.6%	-34.2%	29.2%	36.5%	-
Gross profit		3,798	3,699	4,474	3,720	3,253	1,570	2,002	1,970	2,177	2,329	2,313	-
	YoY	29.6%	28.0%	25.0%	14.4%	-14.4%	-57.6%	-55.3%	-47.0%	-33.1%	48.3%	15.6%	-
	Gross profit margin	58.7%	57.2%	58.8%	54.9%	54.3%	43.1%	57.6%	55.5%	55.3%	49.5%	48.7%	-
SG&A expenses		2,818	2,988	3,194	3,365	2,765	2,073	1,928	1,924	1,891	1,960	1,954	-
	YoY	28.4%	25.1%	19.2%	15.9%	-1.9%	-30.6%	-39.6%	-42.8%	-31.6%	-5.4%	1.3%	-
	SG&A ratio	43.6%	46.2%	42.0%	49.7%	46.2%	56.9%	55.4%	54.2%	48.0%	41.7%	41.2%	-
Operating profit		980	710	1,280	355	488	-503	73	46	286	368	359	-
	YoY	33.1%	42.0%	42.2%	1.9%	-50.2%	-	-94.3%	-87.1%	-41.4%	-	389.7%	-
	Operating profit margin	15.1%	11.0%	16.8%	5.2%	8.1%	-	2.1%	1.3%	7.3%	7.8%	7.6%	-
Recurring profit		981	693	1,338	347	496	-430	101	60	314	367	361	-
	YoY	31.6%	38.6%	48.6%	-1.9%	-49.4%	-	-92.4%	-82.7%	-36.8%	-	256.9%	-
	Recurring profit margin	15.2%	10.7%	17.6%	5.1%	8.3%	-	2.9%	1.7%	8.0%	7.8%	7.6%	-
Net income attributable to owners of the parent		669	406	911	240	116	-1,468	126	42	232	224	246	-
	YoY	30.2%	37.5%	46.3%	147.1%	-82.6%	-	-86.2%	-82.3%	99.4%	-	95.7%	-
	Net margin	10.3%	6.3%	12.0%	3.5%	1.9%	-	3.6%	1.2%	5.9%	4.8%	5.2%	-
	Cumulative	Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	% of Est.	FY Est.
Sales		6,470	12,937	20,547	27,318	5,989	9,630	13,108	16,654	3,939	8,645	13,392	-	76.7%	17,468
	YoY	31.4%	31.3%	29.9%	27.0%	-7.4%	-25.6%	-36.2%	-39.0%	-34.2%	-10.2%	2.2%	-		4.9%
Gross profit		3,798	7,496	11,971	15,690	3,253	4,822	6,824	8,794	2,177	4,505	6,818	-
	YoY	29.6%	28.8%	27.4%	24.0%	-14.4%	-35.7%	-43.0%	-44.0%	-33.1%	-6.6%	-0.1%	-
	Gross profit margin	58.7%	57.9%	58.3%	57.4%	54.3%	50.1%	52.1%	52.8%	55.3%	52.1%	50.9%	-
SG&A expenses		2,818	5,806	9,000	12,365	2,765	4,838	6,766	8,690	1,891	3,851	5,805	-
	YoY	28.4%	26.7%	23.9%	21.6%	-1.9%	-16.7%	-24.8%	-29.7%	-31.6%	-20.4%	-14.2%	-
	SG&A ratio	43.6%	44.9%	43.8%	45.3%	46.2%	50.2%	51.6%	52.2%	48.0%	44.5%	43.3%	-
Operating profit		980	1,690	2,970	3,325	488	-15	58	104	286	654	1,013	-	100.6%	1,007
	YoY	33.1%	36.7%	39.0%	33.8%	-50.2%	-	-98.0%	-96.9%	-41.4%	-	1,641.8%	-		869.2%
	Operating profit margin	15.1%	13.1%	14.5%	12.2%	8.1%	-	0.4%	0.6%	7.3%	7.6%	7.6%	-		5.8%
Recurring profit		981	1,674	3,012	3,359	496	67	168	228	314	681	1,042	-	101.4%	1,028
	YoY	31.6%	34.4%	40.3%	34.4%	-49.4%	-96.0%	-94.4%	-93.2%	-36.8%	922.1%	521.0%	-		351.0%
	Recurring profit margin	15.2%	12.9%	14.7%	12.3%	8.3%	0.7%	1.3%	1.4%	8.0%	7.9%	7.8%	-		5.9%
Net income attributable to owners of the parent		669	1,075	1,987	2,226	116	-1,352	-1,226	-1,184	232	456	702	-	102.5%	685
	YoY	30.2%	32.9%	38.7%	45.6%	-82.6%	-	-	-	99.4%	-	-	-		-
	Net margin	10.3%	8.3%	9.7%	8.1%	1.9%	-	-	-	5.9%	5.3%	5.2%	-		3.9%

Quarterly			FY12/19				FY12/20				FY12/21
(JPYmn)			Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Sales			6,470	6,467	7,610	6,771	5,989	3,641	3,478	3,546	3,939	4,706	4,747
		Global WiFi	4,076	4,109	5,085	4,463	3,348	1,286	1,273	1,372	1,516	2,350	2,628
		Information and Communications Service	2,302	2,207	2,330	2,116	2,515	2,004	2,145	2,133	2,358	2,297	2,069
		Other	92	151	195	193	127	352	60	42	65	59	50
Operating profit			980	710	1,280	355	488	-503	73	46	286	368	359
		Global WiFi	871	725	1,275	431	326	-347	-28	-42	118	263	369
		Information and Communications Service	482	350	342	189	517	300	368	336	410	368	247
		Other, adjustments	-374	-365	-337	-265	-356	-456	-267	-248	-242	-262	-256
Operating profit margin			15.1%	11.0%	16.8%	5.2%	8.1%	-	2.1%	1.3%	7.3%	7.8%	7.6%
		Global WiFi	21.4%	17.6%	25.1%	9.7%	9.8%	-	-	-	7.8%	11.2%	14.0%
		Information and Communications Service	20.9%	15.9%	14.7%	8.9%	20.6%	15.0%	17.1%	15.7%	17.4%	16.0%	11.9%
	Cumulative		Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	% of Est.	FY Est.
Sales			6,470	12,937	20,547	27,318	5,989	9,630	13,108	16,654	3,939	8,645	13,392		76.7%	17,468
		Global WiFi	4,076	8,185	13,270	17,733	3,348	4,634	5,907	7,278	1,516	3,865	6,494		78.1%	8,319
		Information and Communications Service	2,302	4,509	6,839	8,955	2,515	4,518	6,664	8,797	2,358	4,655	6,724		75.7%	8,882
		Other, adjustments	92	243	438	631	127	478	538	579	65	125	175		65.5%	267
Operating profit			980	1,690	2,970	3,325	488	-15	58	104	286	654	1,013		100.6%	1,007
		Global WiFi	871	1,596	2,871	3,302	326	-21	-48	-91	118	381	749		93.3%	803
		Information and Communications Service	482	832	1,175	1,363	517	817	1,185	1,520	410	778	1,024		82.5%	1,242
		Other, adjustments	-374	-738	-1,075	-1,340	-356	-811	-1,078	-1,326	-242	-504	-760		-	-1,038
Operating profit margin			15.1%	13.1%	14.5%	12.2%	8.1%	-	0.4%	0.6%	7.3%	7.6%	7.6%
		Global WiFi	21.4%	19.5%	21.6%	18.6%	9.8%	-	-	-	7.8%	9.8%	11.5%		-	9.7%
		Information and Communications Service	20.9%	18.5%	17.2%	15.2%	20.6%	18.1%	17.8%	17.3%	17.4%	16.7%	15.2%		-	14.0%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Quarterly earnings data for FY12/15 are for reference purposes only; the company has not officially compiled quarterly data for the period.
Note: Company estimates are latest figures.

Q3 FY12/21 results (out November 9, 2021)

Summary

Cumulative Q3 FY12/21 results

Sales: JPY13.4bn (+2.2% YoY)
Operating profit: JPY1.0bn (+1,641.8%)
Recurring profit: JPY1.0bn (+521.0% YoY)
Net income attributable to owners of the parent: JPY702mn (net loss of JPY1.2bn in cumulative Q3 FY12/20)

Progress versus forecast

Progress against full-year FY12/21 forecast (rate of progress in Q3 FY12/20 against full-year FY12/20 results) is 76.7% for sales (78.7%), 100.6% for operating profit (56.0%), 101.4% for recurring profit (73.6%), and 102.5% for net income attributable to owners of the parent (net loss in cumulative Q3 FY12/20).

Although each of the profit line items exceeded the full-year forecast, the company maintained its revised full-year forecast announced on August 10, 2021. When calculating the full-year forecast, the company expected to see a partial recovery in demand from Q4 in its Global WiFi business. As of November 9, 2021, however, the company revised this forecast to a delay of about six months. Meanwhile, Vision continues to capitalize on domestic WiFi demand and other factors to steadily increase its earnings. There are no significant changes in the Information and Communications Service business.

Sales

Sales were JPY13.4bnn (+2.2% YoY). Sales in the Global WiFi business grew 9.9% YoY. The company met a wide range of users' needs in Japan and received contract-based app confirmation work, which is part of border control measures carried out by airport quarantine stations. Sales grew YoY, offsetting the decline in sales due to the near absence of overseas travelers, whereas year-earlier sales (until Q1 FY12/20) included sales from outbound and inbound travelers. Sales in the Information and Communication Service business (external sales) increased 0.9% YoY. The decrease in sales due to a lower average commission fee (brokerage commissions) caused by the sharp rise in electricity retail prices (in January 2021) was offset by an increase in the number of orders for goods for sale such as mobile communications equipment and office automation equipment.

Operating profit

Operating profit was JPY1.0bn (+1,641.8% YoY). Operating profit in the Global WiFi business was JPY749mn (loss of JPY48mn in cumulative Q3 FY12/20). In the Information and Communications Service business, operating profit declined 13.5% YoY.

The gross profit margin declined 1.2pp YoY to 50.9%, the SG&A ratio fell 8.3pp YoY to 43.3%, and the operating profit margin improved 7.2% YoY to 7.6%. The cost of sales grew due to increased personnel costs (recorded as cost of sales) associated with the app confirmation work, which is part of quarantine measures. Meanwhile, overseas communication costs (on pay-as-you-go contracts with charges based on communication usage), depreciation of rental assets (WiFi routers), and outsourcing costs continued to decrease. The SG&A ratio fell due to the divestment of the ProDrivers business, which resulted in a decline in staff size and a decrease in the number of new graduate hired, and the expiry of temporary staff contracts (for shipping and airport counter staff) accompanying the steep fall in rental numbers. Further downward impact on SG&A expenses stemmed from a decline in website advertising expenses that accompanied changes in demand, and other cost-cutting measures.

Recurring profit and net income attributable to owners of the parent

Recurring profit was JPY1.0bn (+521.0% YoY). Subsidies received declined from JPY106mn in cumulative Q3 FY12/20 to JPY4mn. The company booked JPY24mn in forex gains (JPY8mn in cumulative Q3 FY12/20). Interest expenses fell from JPY5mn in cumulative Q3 FY12/20 to zero, and fees paid declined from JPY9mn in cumulative Q3 FY12/20 to JPY4mn. Net income attributable to owners of the parent was JPY702mn (net loss of JPY1.2bn in cumulative Q3 FY12/20).

Trends by segment

Global WiFi

Segment sales were JPY6.5bn (+9.9% YoY), and segment profit was JPY749mn (segment loss of JPY48mn in cumulative Q3 FY12/20).

Demand for communications solutions continued amid the need for teleworking infrastructure during the pandemic. The company expanded sales and promoted the use of Global WiFi for Biz, a permanent internal mobile Wi-Fi router with a domestic use option, while meeting the needs of a variety of situations such as moving, business trips, and events. It also started provision of the World eSIM service, an eSIM service available in 120 countries around the world.

In addition, as part of border control measures at airport quarantine stations for entry into Japan, the company received contract-based app registration and confirmation work, with full implementation having begun in April 2021.

As a result of these efforts, sales and profit grew, and the company achieved its highest quarterly results since Q3 FY12/20, when the impact of the COVID-19 pandemic became apparent.

Information and Communications Service

Segment sales (external sales) were JPY6.7bn (+0.9% YoY), and segment profit was JPY1.0bn (-13.5% YoY).

The main activities in this business are for arranging landline, mobile, and broadband telecommunications services, selling and leasing office equipment, and building websites for startups and SMEs. The company is working to improve stability and profitability by increasing recurring revenues and implementing highly efficient sales strategies, centered on an upstream strategy targeting key customers (startups and venture firms) as well as cross-selling and up-selling according to the growth stage of its customers.

The company focused on sales of mobile communication devices that support remote environments, as there is considerable demand for such devices. With an eye on the future, the company worked to expand sales of its monthly in-house service, which is expected to generate continuous revenue despite a temporary increase in operating costs. It also focused on its new electricity service, Vision Denki, for small and medium-sized companies and startups, which are the main customer demographic for this segment. These measures led to higher sales, while profit fell.

For details on previous quarterly and annual results, see the Historical financial statements section.

FY12/21 company forecast (out August 10, 2021)

Consolidated		FY12/19			FY12/20			FY12/21
(JPYmn)		1H	2H	FY	1H	2H	FY	1H Act.	2H Est.	FY Est.
Sales		12,937	14,381	27,318	9,630	7,024	16,654	8,645	8,823	17,468
	YoY	31.3%	23.5%	27.0%	-25.6%	-51.2%	-39.0%	-10.2%	25.6%	4.9%
Gross profit		7,496	8,194	15,690	4,822	3,971	8,794	4,505
	YoY	28.8%	20.0%	24.0%	-35.7%	-51.5%	-44.0%	-6.6%
	Gross profit margin	57.9%	57.0%	57.4%	50.1%	56.5%	52.8%	52.1%
SG&A expenses		7,262	5,103	12,365	4,838	3,852	8,690	3,851
	SG&A ratio	56.1%	35.5%	45.3%	50.2%	54.8%	52.2%	44.5%
Operating profit		1,690	1,635	3,325	-15	119	104	654	353	1,007
	YoY	36.7%	31.0%	33.8%	-	-92.7%	-96.9%	-	196.3%	869.2%
	Operating profit margin	13.1%	11.4%	12.2%	-0.2%	1.7%	0.6%	7.6%	4.0%	5.8%
Recurring profit		1,674	1,685	3,359	67	161	228	681	347	1,028
	YoY	34.4%	34.4%	34.4%	-96.0%	-90.4%	-93.2%	922.1%	115.1%	351.0%
	Recurring profit margin	12.9%	11.7%	12.3%	0.7%	2.3%	1.4%	7.9%	3.9%	5.9%
Net income		1,075	1,151	2,226	-1,352	168	-1,184	456	229	685
	YoY	32.9%	59.8%	45.6%	-	-85.4%	-	-	36.3%	-

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Quarterly earnings data for FY12/15 are for information purpose only; the company has not officially compiled quarterly data for the period.

Overview

The company's FY12/21 forecast (revised on August 10, 2021*) calls for full-year sales of JPY17.5bn (+4.9% YoY), operating profit of JPY1.0bn (+869.2% YoY), recurring profit of JPY1.0bn (+351.0% YoY), and net income attributable to owners of the parent of JPY685mn (net loss of JPY1.2bn in FY12/20). The company has factored impact from the launch of Vision Denki into its FY12/21 earnings forecast (drags of JPY26mn on sales and JPY166mn on operating profit; more details below).

When the company announced its Q3 results on November 9, 2021, it left its full-year forecast unchanged while revising its forecast for the timing of demand recovery in the Global WiFi business as follows.

Although cumulative Q3 FY12/21 profits exceeded the company's full-year forecast, the forecast remains unchanged from the revision announced on August 10, 2021. When calculating the full-year forecast, the company expected to see a partial recovery in demand from Q4 in its Global WiFi business. As of November 9, 2021, however, the company revised this forecast to a delay of about six months. Meanwhile, Vision continues to capitalize on domestic WiFi demand and other factors to steadily increase its earnings. There are no significant changes in the Information and Communications Service business.

*FY12/21 full-year forecast
Sales: JPY17.5bn (previously undetermined)
Operating profit: JPY1.0bn (previously undetermined)
Recurring profit: JPY1.0bn (previously undetermined)
Net income attributable to owners of the parent: JPY685mn (previously undetermined)

Reasons for the revision
The company had previously withdrawn its full-year FY12/21 forecast and said it was "undetermined" as it was difficult to properly and rationally calculate the impact of the COVID-19 pandemic, but released the forecast on August 10, 2021, based on available information and projections.

The forecast for the Global WiFi business reflects efforts to tap into solid domestic demand and projected growth in contract numbers for Global WiFi for Biz, a permanent internal WiFi routers for corporate customers. The company forecast released on February 15, 2021 assumed that overseas traveler numbers in Q4 would recover to 25% of Q4 2019 numbers. The forecast excludes temporary contract work provided during the pandemic from Q4 onward due to uncertainty about its continuity. The forecast for the Information and Communications Service business reflects current strength and growth in in-house services (monthly subscription). The forecast also incorporates the launch of Vision Denki (drags of JPY26mn on sales and JPY166mn on operating profit).

Basic policy

The company will focus on the WiFi rental business and Information and Communications Service business in Japan in line with the new normal era, and expand sales of in-house services (monthly fee) and various maintenance services for communication products.

Factors impacting financial results in FY12/21

The company believes that the following factors must be thoroughly analyzed.

Negative impact on profit: COVID-19-related impact and sustainable growth initiatives

Positive impact on profit: upward revision to the company’s forecast for 1H FY12/21

COVID-19 pandemic

Impact of increasing availability and effect of vaccines against the spread of COVID-19 (and its variants)

Impact of state of emergency declarations and extensions on corporate activities

Possible YoY recovery of 25% in inbound and outbound travel starting in Q4 (assumed when the company formulated its full-year forecast for FY12/21, which was released on February 25, 2021). The company has excluded anticipated Q4 impact from temporary contract work due to uncertainty about its continuity amid the COVID-19 pandemic.

Sustainable growth initiatives

Efforts aimed at achieving sustainable growth through changes to the company’s earnings model

Enhancement of recurring revenue sources and the company’s monthly subscription services

Growth strategy

Existing businesses

The company will aim to increase productivity. Specifically, the company will adapt to the spread of online operations (the post- COVID-19 “new normal”) and provide products and services that are appropriate in terms of both its customers and current needs. At the same time, it will strengthen its up-selling and cross-selling efforts through the construction and enhancement of a sales system that involves online negotiations. Furthermore, Vision will strengthen and expand its services.

Building new businesses and services

The company will establish a three-pillar business structure by promptly developing a third business to complement its Information and Communications Service and Global WiFi businesses. This third business will need to adapt to conditions prevalent both during and after the COVID-19 pandemic (the “new normal”) and must provide services that incorporate customer feedback while taking advantage of the company’s sales channels, business structure, and customer base. Furthermore, the company will ensure that this business contributes to regional revitalization.

Entry into the luxury camping (“glamping”) business

The company will enter the luxury camping (“glamping”) business and aim to make it commercially viable by the end of 1H FY12/22. Through this business, the company will provide enjoyable all-weather private spaces equipped with air-conditioning, private toilets, and open-air baths. Total investment will be about JPY1.2bn. As of end-1H FY12/21, the company had identified a sufficient number of land plots it could potentially purchase for this business but had not acquired any yet. Heading into this business, Vision will primarily invest in dome tents, land, construction, electrical equipment, and various equipment and fixtures. The company plans to launch its glamping business in 1H FY12/22 and indicates that participation in this business will have nearly no impact on its financial results in FY12/21. Vision made the decision to enter the glamping business partly because its president, Kenichi Sano, is well-versed in glamping due to his family’s activities within the hotel business* and partly because it believes that this business will synergize with existing businesses.

*Koshika no Onsen (https://koshikano-onsen.com/stay/); 2625 Matsunaga, Hayato-cho, Kirishima-shi, Kagoshima Prefecture, Japan

Customers of the company’s Global WiFi business are characterized by their love for travel. The company is capable of securing sales channels for its glamping business thanks to its various means of attracting customers (such as partner travel agencies [both online and conventional], airport counter stores, and websites). Vision believes that its glamping business will be compatible with customer bases and sales channels associated with its existing businesses. Furthermore, the company does not anticipate any major competition. Glamping sites are not as large as hotels equipped with several hundred rooms per building, and the company believes that it can attract enough customers to make the business viable.

Launch of Vision Denki

In August 2021, the company launched its Vision Denki service. When providing this service, the company functions as an electricity retailer and provides low-voltage power services with its own tariff plans primarily to corporations and individual proprietors.

The company estimates that sales and operating profit generated through Vision Denki in FY12/21 will be JPY26mn and JPY166mn lower, respectively, than the levels they would have reached if the company had acquired an equivalent number of contracts through its subscription agency model (These estimates have been factored into the FY12/21 forecast the company released on August 10, 2021.). Until the company can accumulate more Vision Denki contracts, earnings generated through Vision Denki will be lower than those generated through its subscription agency model. In contrast with the existing subscription agency earnings model (earnings = number of contracts × average agency fee income per contract), under the in-house service earnings model (earnings = contracts in force × income from end-user electricity fees - electricity costs) to which it is currently transitioning, the company will function as an electricity retailer and provides electricity. Under the in-house service earnings model, the company will record earnings on a monthly basis, rather than on a non-recurring basis.

Included below are the company’s projections concerning fiscal year-end contracts in force, sales, annual recurring revenue (monthly recurring revenue at the end of each accounting period × 12), and profit associated with the new Vision Denki electricity service. The projections indicate that the service will begin generating monthly profit in February 2023 and assume that accumulated losses were cleared in January 2021.

Fiscal year-end contracts in force: 1,841 in FY12/21; 9,717 in FY12/22; 20,473 in FY12/23; 32,516 in FY12/24; and 43,543 in FY12/25

Sales: JPY63mn in FY12/21; JPY1.2bn in FY12/22; JPY3.0bn in FY12/23; JPY5.3bn in FY12/24; and JPY7.6bn in FY03/25

ARR (annual recurring revenue; below, “gross profit”): JPY85mn in FY12/21; JPY451mn in FY12/22; JPY977mn in FY12/23; JPY1.6bn in FY12/24; and JPY2.1bn in FY12/25

Profit (loss): -JPY144mn in FY12/21; -JPY179mn in FY12/22; JPY19mn in FY12/23; JPY420mn in FY03/24; and JPY949mn in FY12/25

Segment outlook

Global WiFi

In the Global WiFi business, Vision's revised forecast projects sales of JPY8.3bn (+14.3% YoY) and operating profit of JPY803mn (operating loss of JPY91mn in FY12/20). The company had previously forecast sales of JPY5.8bn (-20.1% YoY) and operating profit of JPY77mn (operating loss of JPY91mn in FY12/20).

Starting in January 2021, the company expects the number of overseas visitors to Japan and the number of Japanese travelling abroad to be similar to that from March 2020 onward, with demand from Q4 (October 2021 onward) to recover to 25% of that from October 2019 onward. The company is forecasting teleworking demand conservatively due to uncertainties about the impact of the COVID-19 pandemic on business activities.

Information and Communications Service

In the Information and Communications Service business, the company's revised forecast projects sales of JPY8.882bn (+0.9% YoY) and operating profit of JPY1.2bn (-18.2% YoY). The company had previously forecast sales of JPY8.927bn (+1.5% YoY) and operating profit of JPY1.4bn (-8.1% YoY).

The company expects that the number of new startup companies starting operations will either be flat or down YoY, and that the impact of the COVID-19 pandemic on the number of sales visits will be minimal due to the use of online sales tools.

(Reference): Vision’s take on global data roaming services offered by MNOs

Vision’s Global WiFi service allows multiple users to connect to a single WiFi router, whereas with global data roaming services provided by mobile network operators (MNOs), connection is limited to only the subscriber (i.e., Wi-Fi tethering is not supported). With Vision’s service, with daily charges in the JPY600–1,000 range, three travelers sharing a router pay around JPY200–330 apiece and still have high-speed connection. Business travelers might use an MNO’s global roaming service, but they can quickly max out their monthly data while abroad, or soon after returning home.

Previously, when Softbank Corp. launched its free voice and data service in the US, none of the negative effects anticipated by the stock market ever emerged. NTT Docomo’s new “ahamo” plan offers 20 gigabytes (GB) a month. Limits on connection speeds kick in on overseas roaming after 15 days, and subscribers who use up all of their 20-GB monthly data can purchase additional 1GB at a time. Vision says that while it will keep its eye on ahamo activity, it does not consider it much of a threat.

Medium-term outlook

Raising productivity in existing businesses and cultivating a third-pillar business

Vision does not release a detailed medium-term business plan. The company looks to achieve substantial profit expansion while continuing to invest in future growth. To this end, it had positioned the Global WiFi business as the growth driver and the Information and Communications Service business as a source of stable growth (details discussed below). The company’s current medium-term strategy hit a temporary roadblock in 2020 as the worldwide COVID-19 pandemic hit its Global WiFi business in particular. It also ended up liquidating the chauffeured car sharing service, which it had been incubating as a new business. Against this backdrop, the company focused on renting WiFi routers in Japan to capitalize on growing teleworking demand. It also worked to reduce procurement costs of mobile network access, and achieved operating profitability in its Global WiFi business in December 2020. In FY12/21, the company plans to achieve full-year operating profitability (segment operating profit was JPY118mn in Q1 and JPY381mn in Q2). Meanwhile, its Information and Communications Service business provides a steady revenue and profit source.

In its two existing business segments (Global Wifi and Information and Communications Service), the company says it will work to further raise productivity by leveraging such tools as online business negotiations to enhance up-selling and cross-selling. It aims to improve stability and profitability by tuning up its earnings structure and working to enhance and expand its in-house services (details discussed below). In addition, it plans to leverage its customer base, sales channels, and business framework to cultivate a third pillar of business to complement its two existing segments. The company’s customer base consists of startup businesses in the growth phase, corporate customers with international B2B transactions, central and local government entities, schools, and individual frequent traveler customers. Vision intends to adapt to the changing environment in the COVID-19 pandemic and beyond, cultivating new services to meet its customers’ needs. The company also says it will contribute to regional revitalization.

(Reference): Focusing upfront spending and growth

The exercise conditions for the share subscription rights (paid-in stock options) offered to its directors (excluding external directors), employees, and subsidiary employees (163 people in total) on December 29, 2017, show the company is committed to sustaining strong profit growth. Owing to its failure to meet some of those conditions*, it partially extinguished those subscription rights on March 29, 2021 (see comments in the box below), but this was due to the force majeure circumstances posed by the global COVID-19 pandemic. The conditions are as follows.

Exercise of 30% of the rights: If operating profit exceeds JPY2.1bn in FY12/18 and JPY2.6bn in FY12/19. (Note: The company reported operating profit of JPY2.5bn in FY12/18 and operating profit of JPY3.3bn for FY12/19, fulfilling the conditions for exercise of 30% of the rights).

Exercise of 30% of the rights: If operating profit exceeds JPY3.1bn in FY12/20. (Note: FY12/20 operating profit was JPY104mn)

Exercise of 100% of the rights: If operating profit exceeds JPY3.6bn in any of the financial years from FY12/18 to FY12/21. (Note: The initial FY12/21 company forecast is operating profit of JPY407mn)

* Irrespective of the above, if the operating profit for any fiscal year from the FY12/18 to FY12/21 falls below JPY1.6bn, the share subscription rights holder may not exercise these share subscription rights thereafter, except for the share subscription
rights that have already become exercisable pursuant to the above.

Expanding in-house services

In order to enhance cohesion, motivation and morale for the purpose of increasing the company’s earnings and enterprise value over the long term, Vision has resolved to issue share subscription rights as stock options to directors and employees of the company, and employees of the company’s subsidiaries at the Board of Directors meeting to be held on November 13, 2017.

The total number of the company’s common stock that will increase when all options are exercised is equivalent to 8.3% of outstanding shares. The announcement stated that it will be possible to exercise 30% of the stock options if FY12/18 operating profit exceeds JPY2.1bn and FY12/19 operating profit exceeds JPY2.6bn, or if FY12/20 operating profit exceeds JPY3.1bn: It will also be possible to exercise 100% of all stock options if operating profit exceeds JPY3.6bn in any financial year from FY12/18 to FY12/21.

Since there are exercise conditions that prevent the exercise of all stock options in the event that Vision does not achieve operating profit of JPY3.6bn, which is regarded as a high level in light of past earnings, the company views achieving the target as a commitment to enhancing enterprise and shareholder value. The company believes that the dilution impact on shares will be reasonable.

Exercise period of share subscription rights: April 1, 2019 to March 31, 2025
Amount to be paid in upon exercise of share subscription rights: JPY863
Number of share subscription rights issued: 13,340 units (4,002,000 shares)
Number of share subscription rights as of March 29, 2021 (prior to extinguishment): 13,325 units (3,997,500 shares)
Number of share subscription rights after extinguishment: 3,987 units (1,196,100 shares)

Vision plans to expand into business fields it can pursue independently, increasing its ratio of in-house services. In-house development is expected to accelerate its business and facilitate price control. Services the company is already operating will be used and improved internally, and provided as services to customers.

For example, we understand Vision is actively pursuing external sales of its expertise in sales force automation (SFA), which was developed in-house and is presently used for its own sales. Having also built up in-house expertise and completed optimization of its RPA currently deployed for in-house call centers, the company intends to provide such solutions to other companies and monetize them accordingly.

The cloud-based work attendance management system “VWS” and the business-oriented SNS “JANDI” are services that Vision developed in-house and that it now provides to its customers on a monthly-rate basis. The company employs an upstream strategy targeting key customers (startups and venture firms) as well as cross-selling and up-selling in line with the growth stage of its customers. Vision operates the “Vision Business Market” general corporate support site for startup companies, which introduces and provides services required when starting or opening a business, services required for office or store operations, services required for moving, and other support services. The company arranges, rents and sells copiers, telephone lines, communication terminals, WiFi routers, and other telecommunications services. It also develops proprietary apps for functions such as sales support, which the company simultaneously offers to its customer as in-house services. As such, the company accumulates recurring revenue-type earnings by developing original teleworking and DX services and providing them over the cloud on a monthly fee basis (see details below).

FY12/20 was a good year for orders for the company’s “Vision Crafts!” simple website production service. The service is powered by Vision’s copious experience in website development, having developed more than 100 sites a month. Vision Crafts! is a more economical alternative to hiring a standard website development service, which can run from JPY0.2mn to over JPY1mn including the cost of original site design (Source: LISKUL). The cost of service (not including tax) consists of an initial setup fee of JPY10,000, monthly fees of either JPY4,980 for the one-year plan or JPY3.980 for two-year plan, and a development support fee of JPY20,000. The service enables customers to easily build visually appealing websites, and the company says it has won the endorsement of customers in a wide range of industries including restaurants and retailing.

(Reference) Global WiFi as growth driver

The following represents Vision’s basic perspectives before the outbreak of the COVID-19 pandemic. The company sees growth potential in the market where the Global WiFi business operates. Vision divided the segment into three areas, and plans to expand operations in stages. In addition, the company plans to offer media services (through a media service platform) providing information on various countries and creating more value for customers.

Global WiFi business - growth model

Source: Shared Research based on data released by the company, the United Nations World Tourism Organization (UNWTO), and the Japan National Tourism Organization (JNTO)

In the first growth stage the company aims to target the outbound market (travelers from Japan going abroad). The number of Japanese traveling abroad is roughly 17–19mn per annum and smartphone uptake is growing rapidly. In 2019, the number reached about 20.08mn (+5.9% YoY). Assuming a unit price of JPY7,000 per user puts the potential market size at roughly JPY140.6bn (JPY7,000 in unit price x 20.08mn users). In 2020, amid the COVID-19 crisis, the number of Japanese traveling abroad dropped to roughly 3.17mn (-84.2% YoY).

The target of the second growth stage is the inbound market (overseas visitors to Japan). In 2015, the number of travelers to Japan exceeded 19.7mn thanks to a series of measures by the government to encourage tourism (such as a relaxation of visa requirements and an expansion of the duty-free system). It reached a record 31.9mn (+2.2% YoY) in 2019. The government wants to increase the number of visitors to Japan to 40mn by 2020 and 60mn by 2030. Vision, which estimates that the size of the potential market is now roughly JPY220.0bn (JPY7,000 in unit price x 31.9mn), expects that the market will continue to expand.

The target of the third stage is the overseas market (travelers going from one overseas country to another). According to the United Nations World Tourism Organization (UNWTO), on a global basis, the number of such travelers now exceeds 1.3bn travelers per annum. Assuming a unit price of JPY7,000 per user puts the potential market size at over JPY9tn (JPY7,000 X 1.4bn users). The company has overseas subsidiaries for developing the business and procuring network access in regions with strong travel demand including in popular tourist destinations such as South Korea, Hawaii, Hong Kong, Singapore, Taiwan, the UK, Vietnam, Shanghai, France, and Italy. It also began operations in New Caledonia and the US (California) from 2016. Vision noted that presently Verizon Communications, Inc., a major US mobile carrier, has not rolled out overseas roaming services at a low flat-rate. Therefore, Vision believes that if customers become increasingly aware that they can use Vision’s flat-rate service overseas, it could see an uptick in user numbers.

The company said that going forward it wants to tap into demand in Asian markets and major cities in the US and Europe by expanding its network of subsidiaries and franchises at various locations overseas. Vision expects that gaining even a small portion of this market could substantially contribute to earnings.

While these markets are enormous, the company’s Global WiFi business only rented out 2,830,000 routers in FY12/19 (2,160,000 for customers traveling overseas; 590,000 for visitors to Japan; and 70,000 for those traveling from one foreign country to another). Thus, the company sees ample room for growth in each of these markets. Total number of rental contracts in FY12/20 came to 960,000 (300,000 for customers traveling overseas; 640,000 for users in Japan; and 10,000 for those traveling from one foreign country to another).

As part of an effort to expand into these markets (inbound, outbound, and overseas markets) and increase the number of end-users, in the Global WiFi business the company aims to strengthen ties with telcos in each country, increasing locations at airport counters where customers can rent Vision’s equipment to increase convenience and improve quality.

Specific measures that the company is implementing are as follows.

Introduction of “Smart Pickup” lockers and “Smart Entry” kiosks to improve customer convenience

The company has “Smart Pickup” points where customers receive mobile WiFi routers from lockers installed at airports and other locations. Users can easily unlock the lockers by tapping their smartphones––registered on the web beforehand. This service is more cost-effective and efficient (no waiting time for customers) than the company’s conventional face-to-face services. The new service also allows the company to dedicate service counters to walk-in customers, along with other benefits.

According to Vision, Smart Pickup lockers at Haneda Airport counters can service a maximum of 184 pickups per day (as of end-December 2020, total 92 boxes with each box allowing for a morning and evening pickup; two rotations a day), with a pick up taking less than ten seconds. The company initially set up Smart Pickup points only at Haneda Airport but has since expanded to Narita Airport, Haneda Airport, Chubu Centrair International Airport, Kansai International Airport, Itami Airport, Komatsu Airport, New Chitose Airport, Fukuoka Airport, Kitakyushu Airport, Kagoshima Airport, and Miyako Shimojishima Airport for a total of 11 airports and 36 pickup points (as of end-December 2020) and is looking to continue expanding the number of Smart Pickup points going forward.

Vision stated that Smart Pickup had resulted in shorter lines at staffed counters, and increased the number of walk-in contracts it processes by improving the utilization rate at counters. In light of the results, the company stated that it planned to install additional Smart Pickup lockers going forward.

Further, the company said that it was continuing to introduce “Smart Entry” (self-service kiosks that allow tourists wishing to rent WiFi routers to process applications and make payments themselves; services available in six languages). The kiosks are initially for renting NINJA WiFi® and are installed at counters in Haneda Airport, but going forward Vision plans to add GLOBAL WiFi® rentals and install additional terminals, with increased functions. In conjunction with Smart Pickup, the service enables Vision to utilize vending machines to further automate service counter services

Counters and Smart Pickup points /Smart Entry/Smart Check

Haneda Airport counter	Smart Pickup points (automated lockers for WiFi router pickup and return)	Smart Entry (self-service kiosks: multi-lingual/includes payment features)
Smart Pickup user guide 1 (unlock with you smartphone after preregistering)	Smart Pickup user guide 2 (Retrieve device)	Smart Check (instant customer recognition counter: QR code reception counter)