Vision Inc. 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 50% of sales and 50% of operating profit in FY12/21 (44% and -9% in FY12/20), and Information and Communications Service accounted for 49% of sales and 54% of operating profit in FY12/21 (53% and 147% in FY12/20).
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 FY12/21, 39.2% of rental customers (outbound contracts) were individuals (65.5% in FY12/20), and 60.8% were companies (34.5%). 51.9% (46.4% in FY12/20) were new customers and 48.1% (53.6%) were repeat customers. In FY12/21, the company rented out approximately 780,000 routers (960,000 in FY12/20 and 2,830,000 in FY12/19). 740,000, or roughly 95%, were for use in Japan (640,000, or about 67% in FY12/20 and 590,000, or about 21% in FY12/19).
*Wireless LAN (WiFi) routers enable direct connection to mobile networks on the go via smartphones, tablets, laptops, or game consoles.
From its 2012 inception through FY12/19, the Global WiFi business' share of overall sales and operating profit continued to rise. However, the COVID-19 pandemic had a particularly sharp impact on the business, which resulted in company-wide sales and operating profit in FY12/20 declining 39.0% YoY and 96.9% YoY, respectively. In FY12/21, the Global WiFi business was able to offset the effects from further restrictions on international travel by meeting a wide range of users' needs in Japan and taking on contract-based work for airport quarantine stations. As a result, company-wide sales grew 8.7% YoY. In the same year, operating profit climbed 963.6% YoY thanks in part to progress in cost reduction efforts. While operating profit in FY12/21 was about one-third the level achieved before the pandemic (JPY1.1bn in FY12/19), the operating profit margin recovered to 6.1%, half that in FY12/19.
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 digital technology 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 WiFi router rental service (as of August 2020).
In FY12/21, the company reported sales of JPY18.1bn (+8.7% YoY), operating profit of JPY1.1bn (+963.6% YoY), recurring profit of JPY1.1bn (+401.8% YoY), and net income attributable to owners of the parent of JPY729mn (net loss of JPY1.2bn in FY12/20).
FY12/21 sales amounted to JPY18.1bn (+8.7% YoY). Sales in the Global WiFi business grew 24.6% YoY as 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 in the Information and Communications Service business (external sales) fell by less than 1% YoY. Demand for mobile communications devices to support remote environments made a significant contribution to sales, but commission fees in the power brokerage business declined due to the sharp rise in electricity retail prices.
Operating profit was JPY1.1bn (+963.6% YoY). The Global WiFi business turned profitable, moving from an operating loss of JPY91mn in FY12/20 to operating profit of JPY1.0bn in FY12/21, while operating profit in the Information and Communications Service business declined 26.6% YoY.
The gross profit margin declined 3.0pp YoY to 49.8%, the SG&A ratio fell 8.5pp YoY to 43.7%, and the operating profit margin improved 5.5pp YoY to 6.1%. The cost of sales expanded due to increased personnel costs (recorded as cost of sales) associated with the app confirmation work, which is part of border control and 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 decreased. In regard to SG&A expenses, personnel expenses rose due to payment of employee bonuses (bonuses and performance-linked bonuses were at the same level as in FY12/19). However, website advertising expenses (including ad listing expenses) declined to reflect changes in demand. Sales-linked expenses (including packing and shipping expenses, travel and transportation expenses, supplies expenses, and commission expenses) also fell through a review and reduction of various other expenses.
The company's FY12/22 forecast calls for sales of JPY22.7bn (+25.6% YoY), operating profit of JPY1.4bn (+27.3% YoY), recurring profit of JPY1.4bn (+22.8% YoY), and net income attributable to owners of the parent of JPY921mn (+26.3% YoY). Although there is significant uncertainty regarding the impact of the COVID-19 pandemic, Vision anticipates that demand will partially recover in the Global WiFi business from Q4 (October 2022 onward). In the Information and Communications Services business, the company intends to continue building a stable revenue base generating long-term profit by temporarily suspending Vision Denki, which was launched in August 2021, in light of the sharp rise in wholesale electricity prices, and by working to expand sales of its in-house monthly subscription services.
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 web 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 the glamping business into a third business pillar by leveraging its customer base, sales channels, and business structure.
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.)
|Gross profit margin||56.5%||55.5%||55.3%||58.1%||57.9%||58.8%||57.4%||52.8%||49.8%|
|Operating profit margin||0.1%||2.8%||6.4%||8.7%||10.2%||11.6%||12.2%||0.6%||6.1%||6.2%|
|Recurring profit margin||4.4%||0.3%||3.2%||6.5%||8.7%||10.2%||11.6%||12.3%||1.4%||6.3%||6.2%|
|Net income attributable to owners of the parent||-216||75||275||585||814||1,209||1,529||2,226||-1,184||729||921|
|Per-share data (split-adjusted; JPY)|
|Shares issued (year-end; '000)||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||49,091.1|
|Dividend per share||-||-||-||-||-||-||-||-||-||-||-|
|Book value per share||43.02||22.28||26.81||66.68||75.05||175.40||200.95||226.80||185.79||212.52|
|Balance sheet (JPYmn)|
|Cash and cash equivalents||-||1,328||1,546||5,774||6,242||6,256||7,563||8,485||6,650||7,602|
|Total current assets||-||2,835||2,777||7,404||8,130||8,995||10,455||11,792||8,872||10,749|
|Tangible fixed assets||-||70||229||282||481||859||1,072||1,200||343||535|
|Investments and other assets||-||458||626||516||901||1,038||1,541||1,515||1,901||2,166|
|Total current liabilities||-||1,879||1,904||2,019||2,600||2,895||3,749||4,222||2,508||3,880|
|Total fixed liabilities||-||225||113||13||23||2||0||46||36||930|
|Total net assets||1,524||1,579||1,899||6,496||7,312||8,586||9,803||10,905||8,769||10,122|
|Total interest-bearing debt||-||541||413||40||60||25||2||78||46||813|
|Statement of cash flows (JPYmn)|
|Cash flows from operating activities||-||317||553||799||1,493||1,617||2,889||3,550||-396||1,413|
|Cash flows from investing activities||-||83||-312||-629||-473||-1,416||-1,458||-1,436||-375||-551|
|Cash flows from financing activities||-||26||-128||3,667||-38||-8||-312||-1,165||-1,036||31|
|Performance by segment||FY12/13||FY12/14||FY12/15||FY12/16||FY12/17||FY12/18||FY12/19||FY12/20|
|Information and Communications Service||7,312||6,411||6,440||6,948||7,104||7,774||8,955||8,797|
|Information and Communications Service||-12.3%||0.5%||7.9%||2.2%||9.4%||15.2%||-1.8%|
|% of total||100.0%||100.0%||100.0%||100.0%||100.0%||100.0%||100.0%||100.0%|
|Information and Communications Service||79.4%||62.9%||51.6%||46.8%||40.5%||36.2%||32.8%||52.8%|
|Information and Communications Service||566||724||904||1,025||1,173||1,219||1,363||1,520|
|Information and Communications Service||27.9%||24.8%||13.4%||14.4%||3.9%||11.9%||11.5%|
|Operating profit (excl. adjustments)||0.1%||2.8%||6.4%||8.7%||10.2%||11.6%||12.2%||0.6%|
|Information and Communications Service||7.7%||11.3%||14.0%||14.7%||16.5%||15.7%||15.2%||17.3%|
|% of OP (incl. adjustments)||100.0%||100.0%||100.0%||100.0%||100.0%||100.0%||100.0%||100.0%|
|Information and Communications Service||151.3%||79.4%||60.8%||48.5%||44.0%||35.4%||31.0%||146.6%|
|Global WiFi usage||FY12/13||FY12/14||FY12/15||FY12/16||FY12/17||FY12/18||FY12/19||FY12/20|
|Overseas business (excl. domestic use)||10,520||17,734||43,669||66,556||62,615||64,744||70,000||10,000|
|Gross profit margin||54.3%||43.1%||57.6%||55.5%||55.3%||49.5%||48.7%||46.5%||45.4%|
|Operating profit margin||8.1%||-||2.1%||1.3%||7.3%||7.8%||7.6%||1.9%||7.2%|
|Recurring profit margin||8.3%||-||2.9%||1.7%||8.0%||7.8%||7.6%||2.2%||7.2%|
|Net income attributable to owners of the parent||116||-1,468||126||42||232||224||246||27||246|
|Cumulative||Q1||Q1–Q2||Q1–Q3||Q1–Q4||Q1||Q1–Q2||Q1–Q3||Q1–Q4||Q1||% of Est.||FY Est.|
|Gross profit margin||54.3%||50.1%||52.1%||52.8%||55.3%||52.1%||50.9%||49.8%||45.4%|
|Operating profit margin||8.1%||-||0.4%||0.6%||7.3%||7.6%||7.6%||6.1%||7.2%||6.2%|
|Recurring profit margin||8.3%||0.7%||1.3%||1.4%||8.0%||7.9%||7.8%||6.3%||7.2%||6.2%|
|Net income attributable to owners of the parent||116||-1,352||-1,226||-1,184||232||456||702||729||246||26.7%||921|
|Information and Communications Service||2,515||2,004||2,145||2,133||2,358||2,297||2,069||2,080||2,871|
|Information and Communications Service||517||300||368||336||410||368||247||92||347|
|Operating profit margin||8.1%||-||2.1%||1.3%||7.3%||7.8%||7.6%||1.9%||7.2%|
|Information and Communications Service||20.6%||15.0%||17.1%||15.7%||17.4%||16.0%||11.9%||4.4%||12.1%|
|Cumulative||Q1||Q1–Q2||Q1–Q3||Q1–Q4||Q1||Q1–Q2||Q1–Q3||Q1–Q4||Q1||% of Est.||FY Est.|
|Information and Communications Service||2,515||4,518||6,664||8,797||2,358||4,655||6,724||8,804||2,871||32.3%||8,882|
|Information and Communications Service||517||817||1,185||1,520||410||778||1,024||1,116||347||28.0%||1,242|
|Operating profit margin||8.1%||-||0.4%||0.6%||7.3%||7.6%||7.6%||6.1%||7.2%||-||6.2%|
|Information and Communications Service||20.6%||18.1%||17.8%||17.3%||17.4%||16.7%||15.2%||12.7%||12.1%||-||14.0%|
In Q1 FY12/22, the company reported sales of JPY5.6bn (+42.4% YoY), operating profit of JPY404mn (+41.3% YoY), recurring profit of JPY406mn (+29.4% YoY), and net income attributable to owners of the parent of JPY246mn (+5.9% YoY).
Progress in Q1 FY12/22 against the company's 1H targets was 53.2% for sales (versus 45.6% in Q1 FY12/21 against 1H FY12/21 results), 82.8% for operating profit (43.7%), 83.6% for recurring profit (46.1%), and 72.1% for net income attributable to owners of the parent (50.9%). Q1 sales reached 24.7% of full-year FY12/22 forecast (Q1 FY12/21 sales were 21.8% of full-year FY12/21 results), while operating profit reached 28.7% (25.9%), recurring profit 28.9% (27.4%), and net income attributable to owners of the parent 26.7% (31.8%). The company maintains its 1H and full-year forecasts for FY12/22.
Q1 FY12/22 sales were JPY5.6bn (+42.4% YoY). Sales in the Global WiFi business were up 72.8% YoY, aided by the company's efforts aimed at meeting a wider range of user needs in Japan, contract-based app confirmation work at airports (part of border control measures being carried out at airport quarantine stations), and provision of PCR testing services. External sales in the Information and Communications Service business were up 21.8% YoY, driven by sales of mobile communications devices and office automation equipment, and contributions from revenues generated by rental services for conference rooms and telework space operated by adval Corp., a new subsidiary acquired by the company at end-FY12/21.
In Q1 FY12/22, operating profit came to JPY404mn (+41.3% YoY). Operating profit grew 205.4% YoY in the Global WiFi business but fell 15.3% YoY in the Information and Communications Service business.
The gross profit margin declined 9.9pp YoY to 45.4%, the SG&A ratio dropped 9.8pp YoY to 38.2%, and the operating profit margin fell 0.1pp YoY to 7.2%. 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 Japan's border control measures. In regard to SG&A expenses, personnel expenses rose due to an increase in headcount and the payment of employee bonuses (bonuses and performance-linked bonuses). Online ad listing and other advertising expenses also grew, as the company expanded online advertising to meet growing demand. Sales-linked expenses (including communications expenses, supplies expenses, and commission expenses) rose as well.
Q1 FY12/22 recurring profit was JPY406mn (+29.4% YoY). Subsidy income declined to JPY2mn from JPY8mn in Q1 FY12/21. The company booked JPY16mn in foreign exchange gains in Q1 FY12/21 while it booked a negligible foreign exchange loss in Q1 FY12/22. Meanwhile, the company booked JPY3mn in interest expenses versus less than JPY1mn in Q1 FY12/21, and also booked a JPY1mn loss in connection with its holdings in equity-method affiliates.
In Q1 FY12/22, sales were JPY2.6bn (+72.8% YoY) and segment profit was JPY359mn (+205.4% YoY).
Vision worked to adapt its service and product offerings to meet a wide range of user needs in different scenarios (such as being admitted to a hospital, changing residences, and business trips). At the same time, it promoted the use of Global WiFi for Biz, a permanent internal mobile Wi-Fi router that can also accommodate employees working remotely.
In other areas, the company provided contract-based app registration and confirmation work in connection with border control measures at airport quarantine stations for entry into Japan. It also began offering a more convenient PCR testing service (now considered an essential infrastructure service in the post-pandemic era).
As a result, sales and profit grew YoY.
In Q1 FY12/22, sales (external sales) were JPY2.9bn (+21.8% YoY) and segment profit was JPY347mn (-15.3% YoY). With the goal of fortifying its earnings base and maximizing the customer lifetime value, the company actively expanded its proprietary monthly subscription services, which incurred a temporary increase in operating costs. As a result, sales grew 21.8% YoY, but segment profit fell 15.3% YoY.
In the Information and Communications Service business, Vision develops services that contribute to cost reduction and improvement in operational efficiency, and facilitate teleworking. These services are intended to respond to the era during and after the COVID-19 pandemic, and the company expects demand for them to grow regardless of economic situations. 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) as well as cross-selling and up-selling according to the growth stage of its customers.
Vision worked to grow sales of mobile communications devices and office automation equipment. The company also launched rental services for conference rooms and telework space through adval Corp., a new subsidiary acquired by the company at end-FY12/21.
Furthermore, the company worked to maximize the customer lifetime value by seeking up-selling and cross-selling opportunities in the future, reducing its customer churn rate over the long term, and providing services and products that generate recurring revenue. The company expanded sales of its proprietary monthly subscription services, which incur a temporary increase in operating costs but generate a steady stream of recurring revenue.
For details on previous quarterly and annual results, see the Historical financial statements section.
|(JPYmn)||1H||2H||FY||1H Act.||2H Est.||FY Act.||1H Est.||2H Est.||FY Est.|
|Gross profit margin||50.1%||56.5%||52.8%||52.1%||47.6%||49.8%|
|Operating profit margin||-0.2%||1.7%||0.6%||7.6%||4.8%||6.1%||4.6%||7.5%||6.2%|
|Recurring profit margin||0.7%||2.3%||1.4%||7.9%||4.9%||6.3%||4.6%||7.5%||6.2%|
The company's FY12/22 forecast calls for sales of JPY22.7bn (+25.6% YoY), operating profit of JPY1.4bn (+27.3% YoY), recurring profit of JPY1.4bn (+22.8% YoY), and net income attributable to owners of the parent of JPY921mn (+26.3% YoY).
Although there is significant uncertainty regarding the impact of the COVID-19 pandemic, Vision's forecast assumes that demand will partially recover in the Global WiFi business from Q4 (October 2022 onward).
Vision projects sales of JPY10.8bn (+19.2% YoY) and operating profit of JPY1.0bn (-1.1% YoY).
The company expects the number of overseas travels (both inbound and outbound) to be at the same level from January to September 2022 as in the corresponding month in 2021, and for the October to December period to recover to 25% of the corresponding period in 2019. Vision expects that it will continue contract-based app confirmation work through December 2022, and that it will keep capturing domestic demand, with ongoing acquisition of Global WiFi for Biz subscriptions.
Vision projects sales of JPY11.1bn (+26.5% YoY) and operating profit of JPY1.4bn (+27.8% YoY).
Although it expects ongoing impact on the business activities and merchandise purchasing (for example, with office automation equipment affected by semiconductor shortages) of companies and stores, Vision aims to flexibly respond to changes in the external environment by taking advantage of its strengths in having multiple businesses (products and services) and sales channels, rather than being overly dependent on any one business or sales channel. The company therefore expects to maintain robust earnings.
As for Vision Denki (launched in August 2021), in light of the sharp rise in electricity wholesale prices, the company will suspend its efforts to win new subscribers and shift its focus to servicing existing subscribers.
Vision will strengthen its sales efforts for in-house services (monthly subscription) and continue to build a stable revenue base over the long term.
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 often limited to only the subscriber's own mobile communications device (i.e., WiFi tethering by multiple users is seldom supported). With Vision’s service, paying daily fees in the JPY600–1,000 range, three travelers sharing a router would pay around JPY200–330 apiece. Furthermore, the service uses the same communication lines as local users, enabling higher-speed communications.
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 developments with ahamo, it does not consider it much of a threat, given the focus of its own service on mainly corporate users, its communication quality, and its uses in various settings.
Vision does not release a 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. 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 out WiFi routers in Japan to capitalize on growing teleworking demand. It also worked to reduce procurement costs of mobile network access and turned profitable on the operating level in its Global WiFi business in December 2020. In FY12/21, the company recorded operating profit for the full year in the Global WiFi business (segment profit was JPY118mn in Q1, JPY263mn in Q2, JPY369mn in Q3, and JPY284mn in Q4). Meanwhile, its Information and Communications Service business provides a steady earnings source.
In its two existing business segments (Global Wifi and Information and Communications Service), the company aims to further raise productivity by leveraging such tools as online business negotiations to enhance up-selling and cross-selling. It works 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, the company 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. The company is launching the Vision Glamping & Spa business in FY12/22 with the aim of turning it into a third earnings pillar. In December 2021, the company made adval Corp. a subsidiary through a simple stock delivery (see below for details). adval provides rental conference rooms and telework space at more than 200 locations nationwide for B2B customers for a fixed monthly fee. Vision intends to adapt to the changing environment as society learns to live with COVID-19 by cultivating new services to meet its customers’ needs. The company says it will also contribute to regional revitalization.
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.
*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 was also 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 viewed achieving the target as a commitment to enhancing enterprise and shareholder value. The company believed that the dilution impact on shares would be within reason.
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)
The company's first Vision Glamping Resort & Spa facility is Koshikano Onsen* (Kirishima, Kagoshima Prefecture), a Japanese-style hot spring inn renowned for its spring quality that recently came under the umbrella of the Vision group. The company plans to renovate the inn, which is a glamping facility with all guest rooms equipped with an open-air hot spring bath, the first in its kind in Japan, and open the facility in February 2022 or later. It expects to hold a grand opening of the facility as an expanded, large glamping site in April 2022.
As the second project in its glamping business, the company plans to open a new glamping facility in Yamanakako, Yamanashi Prefecture, a prime location with a view of Mt. Fuji in summer 2022. The key features of Vision Glamping Resort & Spa are as follows.
Vision believes the glamping business has a high level of affinity with its other businesses. The company expects to attract customers from the Global WiFi business customer base, which included 15mn frequent travelers as of August 2020, while making use of the video production and online promotion capabilities of its mainstay Information and Communications Service business. The company can also leverage the relationships it has built in the Global WiFi business with online travel agents (OTAs) and other travel agents.
On January 1, 2022, the company acquired all shares in Koshikano Onsen K.K., a company operated by the family of Vision CEO Kenichi Sano, making it a wholly owned subsidiary.
In December 2021, Vision made adval Corp. a subsidiary through a simple share delivery. adval was founded in 2008 and provides more than 200 teleworking spaces and conference rooms for rent nationwide for B2B customers. The company's services include the Office Ticket service, the industry's first monthly flat-rate conference room service. Vision believes that it will be able to leverage its group's sales capabilities and adval's capabilities in providing rental conference rooms and teleworking spaces at a fixed monthly rate. The company expects to boost sales, achieve more efficient procurement, and lower costs by fully utilizing the customer bases, partners, and accumulated expertise of both companies. Moving forward, the company aims to further expand its business domain and maximize its corporate value.
The Information and Communications Service is distinguished by its stable, recurring-revenue business model, which depends on the closely coordinated efforts of its web marketing, sales team, and Customer Loyalty Team (CLT) to win orders by providing optimal solutions (products and services) for companies at their particular growth stage.
As in the past, the main focus of the business is on startups. The goal of the business is to provide optimal services (solutions) at the appropriate time in line with the growth stage of the client company. At the same time, the company will look to expand in areas where it can leverage its strengths over the medium term, and in particular by increasing the ratio of its proprietary monthly fee-based services. By developing services in-house and accelerating the business growth, the company believes it will gain more control over prices. In addition, the company improves its services by using them internally, offering enhanced services to its customers.
Gross profit generated from recurring-revenue services—renewal fees received from telecommunications companies in connection with agency contracts and manufacturer maintenance fees in the office equipment sales business—declined from JPY470mn in FY12/15 to JPY345mn in FY12/21. However, gross profit from proprietary monthly fee-based services expanded from JPY50mn in FY12/15 to JPY675mn in FY12/21 (Shared Research estimates based on data in materials supplied by the company). The combined revenue (total for recurring-revenue services and in-house services) rose from JPY530mn in FY12/15 to JPY1.0bn in FY12/21. In FY12/21, this accounted for 22.0% (up 4.4pp from 17.6% in FY12/20) of the JPY4.6bn gross profit (gross profit margin of 52.7%) in the Information and Communications Service business.
Vision has a variety of proprietary services developed in-house. For example, the company is engaged in the external sale of its expertise in sales force automation (SFA), which was developed in-house and is presently used in its own sales. The company has also built up expertise and completed optimization of its robotic process automation (RPA) that is deployed for in-house call centers; it provides such solutions to other companies and monetizes them accordingly.
In addition, Vision developed the VWS cloud-based work attendance management system and the JANDI social networking service for business users. The company provides these services (only the functions necessary for customers) over the cloud on a monthly-rate basis. The company employs an upstream strategy targeting startups, 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.
In FY12/21, orders were strong 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.
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 intends to offer media services (through a media service platform) providing information on various countries and creating more value for customers.
In the first growth stage, the company aims to target the outbound market (travelers from Japan going abroad). The number of Japanese traveling abroad prior to the pandemic was roughly 17–20mn per annum and 20.08mn in 2019 (+5.9% YoY). In addition, the use of smartphones is growing rapidly. 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 3.17mn (-84.2% YoY). In 2021, that figure dropped 84.0% YoY to 0.51mn.
The target of the second growth stage is the inbound market (overseas visitors to Japan). In 2015, the number of travelers to Japan exceeded 19.73mn 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 31.88mn (+2.2% YoY) in 2019. The government was targeting to increase the number of visitors to Japan to 40mn by 2020 and 60mn by 2030. Vision estimated the size of the market stood at about JPY220bn at end-2019 (JPY7,000 in unit price x 31.88mn users). At 60mn visitors, the market would stand at about JPY420bn (JPY7,000 in unit price x 60mn users). As a result of the pandemic, the number of visitors to Japan fell 87.1% YoY to 4.11mn in 2020 and 94.2% YoY to 0.24mn in 2021.
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.
While these markets are enormous, the company’s Global WiFi business only rented out 2.83mn routers in FY12/19 (2.16mn for customers traveling overseas; 0.59mn for visitors to Japan; and 0.07mn 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 0.96mn (0.3mn for customers traveling overseas; 0.64mn for users in Japan; and 0.01mn for those traveling from one foreign country to another). In FY12/21, the total number of rental contracts was 0.78mn (0.02mn for customers traveling overseas; 0.74mn for users in Japan; and 0.01mn 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 implemented as of end-December 2020 are as follows. As noted earlier, the company's medium-term strategy (pursuing investment and growth) for the Global WiFi business hit a temporary roadblock in FY12/20 and FY12/21 due to the pandemic. The company nevertheless remains poised to act if and when there is a recovery in the number of Japanese travelling abroad and overseas tourists visiting Japan.
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
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