Research Coverage Report by Shared Research Inc.

9416

VisionShared Research Inc. has produced this report by request from the company discussed in thereport. The aim is to provide an “owner’s manual” to investors. We at Shared Research Inc.
make every effort to provide an accurate, objective, and neutral analysis. In order to highlightany biases, we clearly attribute our data and findings. We will always present opinions fromcompany management as such. Our views are ours where stated. We do not try to convince or
influence, only inform. We appreciate your suggestions and feedback. Write to us at
sr_inquiries@sharedresearch.jp or find us on Bloomberg.

Coverage initiated on: 2016-09-01
Last update: 2021-11-10

INDEX
Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.
Key financial data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.
Recent updates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.
Trends and outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.
Quarterly trends and results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21..
Business segments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25..
Key group companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32..
Profitability analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33..
Market and value chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33..
Strengths and weaknesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37..
Historical performance and financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38...
Historical performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38..
&nbsp;Income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48..
Balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49..
Cash flow statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50..
Other information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51..
News and topics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53..
Company profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54..

Vision/ 9416
Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

2

Executive summary
Business overview
Vision has two main businesses: Global WiFi, in which it rents out mobile WiFi routers, and Information andCommunications 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 andCommunications 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 fromtelecommunications 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% werecompanies (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, orroughly 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 ofservices 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 otherdivisions 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 theeffects of the COVID-19 pandemic, the Information and Communications Service business generally did well, andmaintained 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 theparent of JPY685mn (net loss of JPY1.2bn in FY12/20). The company had previously withdrawn its full-year forecast and said itwas "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).

Vision/ 9416
Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

3

*When the company announced its Q3 results on November 9, 2021, it left its full-year forecast unchanged whilerevising 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 seea 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 demandand other factors to steadily increase its earnings. There are no significant changes in the Information andCommunications 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 ofgrowth, 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 othermeans. Additionally, the company will further strengthen up-selling and cross-selling, and brush up the profit structure whilestrengthening and expanding its in-house proprietary services. The company also aims to develop a third business pillar byleveraging 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.)

Vision/ 9416
Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

4Key financial data
Income statement

FY12/11

FY12/12FY12/13

FY12/14

FY12/15

FY12/16

FY12/17

FY12/18

FY12/19

FY12/20(JPYmn)ParentParent

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Est.

Sales

6,999

6,527

9,204

10,185

12,485

14,844

17,55521,50427,31816,654

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%

5,199

5,652

6,910

8,622

10,161

12,65015,690

8,794

-

8.7%

22.3%

24.8%

17.8%

24.5%

24.0%

-44.0%

56.5%

55.5%

55.3%

58.1%

57.9%

58.8%

57.4%

Gross profit
YoY
Gross profit margin
Operating profit
YoY
Operating profit margin
Recurring profit
YoY
Recurring profit margin
Net income attributable to ownersof the parent
YoY
Net margin

FY12/21

52.8%

10

286

805

1,290

1,789

2,484

3,325

104

1,007

-

2,742.1%

181.2%

60.3%

38.6%

38.9%

33.8%

-96.9%

869.2%

0.1%

2.8%

6.4%

8.7%

10.2%

11.6%

12.2%

0.6%

5.8%

57

285

30

324

808

1,298

1,795

2,500

3,359

228

1,028

-83.5%

399.6%-89.5%

987.9%

149.3%

60.8%

38.3%

39.3%

34.4%

-93.2%

351.0%

0.8%

4.4%

0.3%

3.2%

6.5%

8.7%

10.2%

11.6%

12.3%

1.4%

5.9%

1

-216

75

275

585

814

1,209

1,529

2,226

-1,184685-99.1%--

264.9%

112.6%

39.0%

48.5%

26.5%

45.6%

-

-

0.0%

-3.3%

0.8%

2.7%

4.7%

5.5%

6.9%

7.1%

8.1%

-7.1%

3.9%

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

0.04

-6.20

2.13

7.77

16.32

16.71

24.77

31.40

46.05

-25.07

14.55

-

-

-

-

-

-

-

-

-

-

-

43.63

43.02

22.28

26.81

66.68

75.05

175.40200.95226.80185.79Per-share data (split-adjusted;
JPY)
Shares issued (year-end; '000)
EPS
Dividend per share
Book value per share
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
Total assets

-

-

319

286

327

423

591

677

667

197

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--

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

-

-

541

413

40

60

25

2

78

46

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

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%

Total interest-bearing debt

213

100

13

23

2

0

38

31

Statement of cash flows (JPYmn)

Financial ratios

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.

Vision/ 9416
Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

5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

17,55521,50427,31816,654Global 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

5

18

10

13

58

224

631

579

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%

Other
YoY

Other

-1.8%

278.7%-46.9%

33.5%

345.8%

283.8%

181.5%-8.1%

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

% of total

Other

-8

Adjustment

-194

-267

-626

-681

-821

-874

-954

-1,073-933

2,741.8%8181.2%

60.3%

38.6%

38.9%

33.8%

-96.9%-197.8%230.5%

92.2%

39.7%

51.5%

36.8%

-

27.9%

24.8%

13.4%

14.4%

3.9%

11.9%

11.5%

-364

YoY
Global WiFi
Information and Communications Service
Other
Operating profit (excl. adjustments)

0.1%

-12

-54

-103

-393

-

-

-

-

-

-

-

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%

-

45.8%

-

-

-

-

-

-

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% of OP (incl. adjustments)

Other

-2.2%

Global WiFi usage

FY12/130.9%
FY12/14-0.8%
FY12/15-2.6%
FY12/16-3.9%
FY12/17-5.6%
FY12/18-6.1%
FY12/19-37.9%
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

223,706

462,953

648,475

886,824

1,302,646

1,759,514

2,160,000

300,000

Domestic use

7,511

35,51290,906

190,665

285,708

407,517590,000

640,000

Overseas business (excl. domestic use)

10,52017,734

43,66966,556

62,61564,74470,00010,000Overseas use

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

Vision/ 9416
Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

6Recent updates
Q3 FY12/21 flash update2021-11-10

On November 9, 2021, Vision Inc. announced earnings results for Q3 FY12/21; see the results section for details.

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, createdon 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 andCommunications 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 flatrate 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 buildingsthat 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, andreduce costs. The company decided to make adval a subsidiary on the assumption that the action would contribute toenhanced 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 thatshould there be an impact moving forward that requires disclosure, it would promptly make an announcement to that effect.

Vision/ 9416
Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

7

Trends and outlook
Quarterly trends and results
Quarterly

FY12/19(JPYmn)FY12/20

FY12/21

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%

-

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%

-

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

Sales

6,470

12,937

20,54727,318

5,989

9,630

13,10816,654

3,939

8,645

13,392-

Recurring profit

Net income attributable to owners of
the parent

YoY

31.4%

31.3%

29.9%

27.0%

-7.4%

-25.6%-36.2%-39.0%-34.2%-10.2%

2.2%-

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% of Est.

FY Est.

76.7%

17,468
4.9%

980

1,690

2,970

3,325

488

-15

58

104

286

654

1,013

-

YoY

33.1%

36.7%

39.0%

33.8%

-50.2%--98.0%-96.9%-41.4%-

1,641.8%-

Operating profit margin

15.1%

13.1%

14.5%

12.2%

8.1%

-

0.4%

0.6%

7.3%

7.6%

7.6%

-

981

1,674

3,012

3,359

496

67

168

228

314

681

1,042

-

YoY

31.6%

34.4%

40.3%

34.4%

-49.4%-96.0%-94.4%-93.2%-36.8%

922.1%

521.0%-

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%

-

669

1,075

1,987

2,226

116

-1,352-1,226-1,184

232

456

702

-

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%

Q4

Recurring profit

Net income attributable to owners of
the parent

Quarterly

FY12/19(JPYmn)FY12/20

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

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

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

Other

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%

Q1

Q1–Q2

Q1–Q3

Q1–Q4

Q1

Q1–Q2

Q1–Q3

Q1–Q4

Q1

Q1–Q2

Q1–Q3

Cumulative
Sales

1,007
869.2%
5.8%

101.4%

1,028
351.0%
5.9%

102.5%

685

FY12/21

Q1
6,470

Sales

100.6%

Q1–Q4% of Est.

FY Est.

6,470

12,937

20,54727,318

5,989

9,630

13,10816,654

3,939

8,645

13,392

76.7%

17,468Global WiFi

4,076

8,185

13,27017,733

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

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

-760

-

-1,038Other, adjustments

Other, adjustments
Operating profit margin

-374

-738

-1,075-1,340-356-811-1,078-1,326

-242

-504

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.

Vision/ 9416
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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% forsales (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 indemand from Q4 in its Global WiFi business. As of November 9, 2021, however, the company revised this forecast to adelay 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 ofusers' needs in Japan and received contract-based app confirmation work, which is part of border control measures carriedout 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 officeautomation 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), andoutsourcing 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 othercost-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).

Vision/ 9416
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9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 adomestic 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 andprofitability 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 growthstage 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 newelectricity 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(JPYmn)FY12/19
1H

2H

FY12/20FY

1H

FY12/212HFY

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

-1,352168-1,184

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

Vision/ 9416
Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp

10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 whilerevising 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 fromthe 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 thisforecast to a delay of about six months. Meanwhile, Vision continues to capitalize on domestic WiFi demand and otherfactors 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 toproperly 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 incontract 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 touncertainty 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 linewith the new normal era, and expand sales of in-house services (monthly fee) and various maintenance services forcommunication 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
Vision/ 9416
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11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 (thepost- COVID-19 “new normal”) and provide products and services that are appropriate in terms of both its customers andcurrent needs. At the same time, it will strengthen its up-selling and cross-selling efforts through the construction andenhancement 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 airconditioning, 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 inthis 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 hotelbusiness* 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 ofsecuring 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 anelectricity 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 numberof contracts through its subscription agency model (These estimates have been factored into the FY12/21 forecast thecompany 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 withthe existing subscription agency earnings model (earnings = number of contracts × average agency fee income percontract), 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 ona non-recurring basis.

Vision/ 9416
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12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 andassume 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; and43,543 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) andoperating 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 thatthe 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 anticipatedby 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 purchaseadditional 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.

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13Medium-term outlook
Raising productivity in existing businesses and cultivating a thirdpillar 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 andthe 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 crossselling. 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 businessframework to cultivate a third pillar of business to complement its two existing segments. The company’s customer baseconsists 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 iscommitted to sustaining strong profit growth. Owing to its failure to meet some of those conditions*, it partially extinguishedthose subscription rights on March 29, 2021 (see comments in the box below), but this was due to the force majeurecircumstances 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 theconditions 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, theshare 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.

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14Expanding in-house services
In order to enhance cohesion, motivation and morale for the purpose of increasing the company’s earnings andenterprise 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 beheld 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 inany 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 notachieve 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 thedilution 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-housedevelopment 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 othercompanies 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 thegrowth 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-houseservices. 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 ispowered 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 toover 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 adevelopment support fee of JPY20,000. The service enables customers to easily build visually appealing websites, and thecompany 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, andplans 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.

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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 ofJapanese 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 travelingabroad 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 toJapan 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 sizeof 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 theUnited 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 regionswith 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) from2016. 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; and10,000 for those traveling from one foreign country to another).

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As part of an effort to expand into these markets (inbound, outbound, and overseas markets) and increase the number of endusers, 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 andother 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-faceservices. The new service also allows the company to dedicate service counters to walk-in customers, along with otherbenefits.
According to Vision, Smart Pickup lockers at Haneda Airport counters can service a maximum of 184 pickups per day (as ofend-December 2020, total 92 boxes with each box allowing for a morning and evening pickup; two rotations a day), with apick 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 torent 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, theservice enables Vision to utilize vending machines to further automate service counter services

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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)

Source: Shared Research based on company data

Increasing customer contact points to attract more inbound customers (visitors to Japan)
As of the end of December 2020, in Japan, Vision had a total of 39 contact points (pickup/drop-off counters), including thoseat 18 major airports (New Chitose Airport, Asahikawa Airport, Sendai Airport, Narita Airport, Haneda Airport, Niigata
Airport, Komatsu Airport, Kansai International Airport, Chubu Centrair Airport, Itami Airport, Mt. Fuji Shizuoka Airport,
Fukuoka Airport, Kitakyushu Airport, Oita Airport, Miyazaki Airport, Kagoshima Airport, Naha Airport, and Miyako
Shimojishima Airport) and other locations (counters at Shibuya Chikamichi and JR Miyazaki Station and automated lockers for
WiFi router pickup and return). There are four counters in Narita Airport and two in Haneda Airport. Already possessing
such counters in the limited space of an airport not only improves the convenience for customers, but also impedes entry bycompetitors, serving as a strength for the company.
Going forward, the company plans to expand the number of domestic contact points and strengthen initiatives to attract
inbound customers (visitors to Japan) and initiatives with local governments and municipalities.
Travel-related services platform
In addition to the three growth stages in the Global WiFi business, the company aims to develop a new business area as ittargets future opportunities: a travel-related service platform that will provide useful information (media service) and offer
useful services for travelers.
In FY12/19, users of the company’s Global WiFi® and NINJA WiFi® totaled roughly 4.5mn (outbound roughly 3.5mn andinbound roughly 1.0mn), and the total number of stays was 31.2mn (outbound 24.3mn and inbound 6.9mn). Generating an
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18additional JPY100 per day in ARPU from such users through a travel-related service platform would have boosted annual
revenue by JPY3.1bn (31.2mn stays multiplied by JPY100/stay). This would have raised FY12/19 sales (JPY17.7bn) in the
Global WiFi business by about 18%.
The company said a media business would provide information tailored to travelers’ destinations. For example, according to
the company, many travelers visiting Japan are high net worth individuals (with plenty of purchasing power) that are not ongroup tours. Most Japanese companies, tourist areas and facilities have not worked out how to approach these individuals.
Because Vision rents mobile WiFi routers (NINJA WiFi®) to those visiting Japan, it can reach out directly to such individuals.
Further, this allows the company to collect information directly from the travelers and in turn supply information to shops,
companies, and regional tourism destinations to draw travelers to these spots.
Being able to obtain accurate information is critical in order to take full advantage of one’s travel destination. As such, Visioncontinues to roll out several services that are useful for travelers, including ili and Pocketalk, a new wearable translation
device (the company plans to gradually improve sophistication as a travel-assistance device) and an overseas restaurant
reservation service capable of handling several languages, including Japanese. By combining these services, Vision willcontinue to provide services to tourists before, during and after their travels.

Travel-related service platform

Source: Company data

Information and Communications Service as a source of stable
growthRecurring-revenue business model
In the Information and Communications Service segment, the company aims to continue its strategy of targeting startups. As
these client companies grow, it will be able to offer the appropriate additional or expanded (solutions) services in line with
their growth.
Gross profit on recurring revenue from commissions from telecommunications companies as well as from office equipment
maintenance fees in the office equipment sales business shrank from JPY470mn in FY12/15 to JPY360mn in FY12/20.
However, gross profit on revenue from proprietary monthly fee-based services grew from JPY50mn in FY12/15 to JPY470mn
in FY12/20. The combined total grew from JPY530mn in FY12/15 to JPY830mn in FY12/20. In FY12/20, this accounted for
17.6% (up 1.5pp from 16.1% in FY12/19) of the JPY4.7bn gross profit (53.4% GPM) in the Information and Communications
Service business.

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The company aims to deepen ties between its websites, which attract customers, and its Customer Loyalty Team (CLT), which
supports existing customers, to further improve marketing efficiency and boost revenue per customer by expanding thelineup of products that it handles and proprietary products.
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 CLT to win orders by providing the optimal
solutions (products and services) for companies at their particular growth stage.

Continuous stock model for Information and Communications Service business

Source: Company data

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Business
Business overview
The company has two main businesses: the Global WiFi business, and the Information and Communications Service
business.
In the Global WiFi business, it rents out mobile WiFi routers*, targeting the outbound (travelers from Japan to overseas)
and inbound (travelers to Japan from overseas) markets. Vision is the largest of the three major Japanese companies that
rent out mobile WiFi routers for use overseas, with a market share (sales basis) of more than 50% (as of FY12/20, Shared
Research survey).
In the Information and Communications Service business it targets mainly startups, and arranges telephone lines andother telecommunications services, sells office equipment, and builds websites. The main source of revenue is salescommissions from telecoms and office equipment manufacturers.
* Refers to wireless LAN (WiFi) routers able to connect to mobile networks. Using these mobile WiFi routers, it ispossible to connect to the internet via smartphones, tablets, notebook computers and game consoles that have WiFi
capability while on the move.

In FY12/20, Global WiFi accounted for 44% (previous year: 65%) of sales, and Information and Communications
Service 53% (33%), with the former accounting for -9% of operating profit (previous year: 75%) and the latter 147%(31%). 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 COVID-19’s impact on outbound and inbound demand, which were reduced to essentiallyzero, and its share of sales and operating profit consequently shrank.

Business model

Source: Shared Research based on company data

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Sales by segment

Source: Shared Research based on company data

Operating profit by segment

Source: Shared Research based on company data
Note: The Global WiFi business ratio reflects the share of total segment profit before adjustments.

Business development
Origins: understanding customer needs
The company’s origins lie in discovering and meeting customer needs. After current company CEO Sano worked for Hikari
Tsushin (TSE1: 9435) for four years, he set up Vision LLC in Fujinomiya, Shizuoka, in April 1996. He discovered from some
Brazilian people that international calls were expensive, and started arranging and selling low-priced international telephoneservices to South American residents in Japan. Global WiFi® was launched in February 2012 in response to demand foraffordable and easy-to-use internet environments for people traveling overseas. The company has been renting out mobile
WiFi routers in Japan since 2010, and used the expertise gained in this business to launch the Global WiFi service just six
months after the idea was born.

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Research Coverage Report by Shared Research Inc. | https://sharedresearch.jp22Evolution of sales and service lineup

Source: Shared Research based on company data

Corporate services: improvements in marketing efficiency using websites
As the internet became more widespread from 2000, the focus of this business shifted to the corporate sector, and now
almost all customers in the Information and Communications Service business are corporate clients. An issue in providing
services to the corporate sector was improving selling efficiency, and the company has responded by adopting a newmarketing strategy, including the use of websites such as copyki.com.
Previously the company’s marketing strategy primarily involved telemarketing, which would then lead to in-person sales,
which was inefficient, and so many salespeople became frustrated and quit. Aware that the internet would become acommonplace means to gather information, Vision started to use websites in marketing activities from 2003. In 2004, thecompany launched a website called copyki.com to attract customers by selling copiers. It started making appointments andmeeting with potential customers who sent enquiries and requested quotes through the website, and because these web
customers have a high propensity to purchase products, contract rates were improving.

Creates a number of websites following the success of copyki.com
Reflecting the success of copyki.com, the company launched a number of websites offering telephone line subscription(denwa-kanyuken.com), business phones (bizphone.com), corporate mobile phones (houjinkeitai.com) and phone lines(denwa-hikari.com) (in 2008). In addition to sites such as these (named after products), the company also created satellite
sites specifically related to demand for related search keywords to reach even more customers.
As a result, the ratio of telemarketing-based appointments is dropping (before the launch of these websites, these accounted
for all contracts won). Now, over half of contracts come from concierge operations for handling website enquiries andcontinuing business with existing customers (CLT, explained later), add-ons from existing customers introduced by the sales
team (upselling), and additional purchases of other products (cross-selling). According to the company, more efficient
marketing also means that marketing staff turnover has declined dramatically, leading to accumulated sales expertise amongstaff.

Core strategy
The three main strategies the company is following are outlined below.
Focused, niche market strategy:
Target: Overseas travelers and startup companies

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Develop new markets by finding and serving the needs of those left behind by advances in information andcommunications technology
Focus management resources and services on carefully selected target markets
Price and quality leadership strategy:
Emphasize productivity, superior pricing, and reputation for service quality
Relentlessly pursue increases in productivity by increase speed of organization and operations
Demonstrate superior price competitiveness while maintaining high quality service
Up-selling and cross-selling strategy:
Focus on in-house CRM as recurring-revenue business
Find new needs in information and communications services and consistently provide the right services at the right priceat the right time
Establish long-term relationships with customers

Key characteristics of two businesses
Global WiFi
The key feature of the company’s Global WiFi business is the ability to offer low-price and high-quality service, as Vision has
direct negotiations and contracts with overseas telcos.

Information and Communications Service
There are three key features of the Information and Communications Service business.
Mainly targeting startups
The main targets of the Information and Communications Service business are startups. According to Vision, this is because
they have more growth potential than major corporations. It is difficult for major corporations to double the number of
employees, but if a startup’s business goes well, there is plenty of scope for employee numbers to double or even grow by
10x. The company said that the number and variety of services it can offer these startups can also grow.
Initial prices held low; recurring revenue model entails offering multiple services to each customer
In order to lighten the burden on startups, Vision sets low initial prices for equipment and other products. It aims to boost
revenue per customer by providing an increasing number and variety of services in line with the growth of its startup clients.
This business model means a relatively high proportion of ongoing monthly revenues in addition to one-time sales. The
company supplies pre-owned as well as new phones to startups. Although there are concerns about bankruptcy for startups,
according to Vision, its customers are highly cost-conscious, so the percentage that goes bankrupt is extremely low comparedto the average for startups.
Leveraging web marketing and Customer Loyalty Team (CLT) to boost marketing productivity
The Information and Communications Service business targets corporate customers. In general, contracts are enteredthrough face-to-face marketing, so a challenge is how to reduce marketing staff costs. The company made sales activities
more efficient by promoting website-based marketing and conducting in-person sales focused on clients with high latentneeds. The company has an extremely high success rate of gaining contracts from inquiring clients who came from thecompany’s websites after searching for a service to fulfill their needs. For example, average copier sales per marketing
employee for Vision are roughly 3x the industry average.
The call center is another important marketing channel: the Customer Loyalty Team is involved in after-sales support forexisting clients, and follows up with client companies as they reach certain growth stages.

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* In addition to sites named after products, the company also created satellite sites specifically related to demand forsearch keywords relevant to the products, to spread its customer acquisition net. Per the company, its websites areoperated by teams, which has resulted in powerful customer attraction through SEO** results. The keywords that theusers input in their searches are not just single words, but mostly strings of words that combine various needs. As aresult, the company is able to tap into demand across a wide front and increase the number of users.
** SEO (Search Engine Optimization) refers to technology that positions a website in the upper rankings of search
results on search engines such as Yahoo! and Google.

Company’s major marketing channels and overview
Web channels
Call center

The company attracts customers by developing websites specific to certain products, such as copyki.com, Denwakanyuken.com,
Houjinkeitai.com, Bizphone.com, and SEOTaisaku.com. Information regarding customers who have requested an estimate via thewebsite is transferred to the call center.
Makes phone calls to customers with information obtained from the websites. Also uses telemarketing using client lists to tap into
customers with a high propensity to purchase products. Arranges sales visits by marketing staff responsible for relevant product.

Responsible for after-sales support for existing clients. Taps into product purchasing needs through regular telephone calls with existingcustomers. If a certain item is in high demand, the team makes an appointment for the marketing person in charge to make a sales call.
When marketing staff learn on a visit that the customer wishes to purchase products from another division, they telephone the CLT,
Customer Loyalty Team
which makes an appointment for the responsible staff to make a sales call. The CLT is in charge of after-sales support for existing(CLT)
customers. This lowers marketing staff turnover and avoids missed business opportunities in case of telephone calls from customers
when the marketing staff are unavailable. It also becomes possible to have marketing staff dedicated to customer acquisition activities. It
appears that telephone calls from customers are responsible for more sales than the company initially anticipated.
Marketing staff
Based on appointments set up by the call center or CLT, sales staff visit clients and conduct marketing activities.

Source: Shared Research based on company data

Business segments
Global WiFi segment
Global WiFi

FY12/13

FY12/14

FY12/15

FY12/16

FY12/17

FY12/18

FY12/19

FY12/20

FY12/21(JPYmn)

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Est.

No. of rental contracts

241,737

516,199

783,050

1,144,045

1,650,969

2,231,775

2,830,000

960,000

YoY

335.5%

113.5%

51.7%

46.1%

44.3%

35.2%

26.8%

-66.1%-

Overseas use

223,706

462,953

648,475

886,824

1,302,646

1,759,514

2,160,000

300,000

n.a.

Domestic use

7,511

35,51290,906

190,665

285,708

407,517590,000

640,000

n.a.

Overseas business (excl. domestic use)

10,52017,734

43,66966,556

62,61564,74470,00010,000n.a.

Customer breakdown (% of Global WiFi)

n.a.

.

Companies

-

50.8%

36.9%

34.5%

n.a.

-

-

-

49.2%

56.4%

62.6%

63.1%

65.5%

n.a.

1,887

-

3,756

6,035

7,882

10,392

13,506

17,733

7,278

n.a.

-

99.0%

60.7%

30.6%

31.8%

30.0%

31.3%

-59.0%

-

20.5%

36.9%

48.3%

53.1%

59.2%

62.8%

64.9%

43.7%

-

Companies

-

-

-

54.4%

50.4%

46.4%

45.8%

46.0%

n.a.

Individuals

-

-

-

45.6%

49.6%

53.6%

54.2%

54.0%

n.a.

7,806

7,276

7,707

6,890

6,295

6,052

6,266

7,582

n.a.

YoY

-

-6.8%

5.9%

-10.6%

-8.6%

-3.9%

3.5%

21.0%

-

Companies

-

-

-

-

7,276

7,508

7,777

10,109

n.a.

YoY

-

-

-

-

-

3.2%

3.6%

30.0%

-

Individuals

-

-

-

-

5,536

5,182

5,382

6,250

n.a.

Individuals
Sales
YoY
% of total

-

43.6%

37.4%

Customer breakdown (% of Global WiFi)

Customer spend per unit (JPY)YoY
Operating profit

-

-

-

-

-

-6.4%

3.9%

16.1%

-

-184

180

594

1,141

1,593

2,414

3,302

-91

n.a.

YoY
Operating profit (excl. adjustments)--

230.5%

92.2%

39.7%

51.5%

36.8%

-

-

-9.7%

4.8%

9.8%

14.5%

15.3%

17.9%

18.6%

-

-

-

19.7%

40.0%

54.0%

59.8%

70.2%

75.1%

-8.7%

-

% of OP (incl. adjustments)

Source: Shared Research based on company data

Segment overview
The Global WiFi business accounted for 43.7% of consolidated sales and -8.7% of operating profit in FY12/20 (64.9% and75.1% in FY12/19). In FY12/20, the COVID-19 crisis reduced both outbound and inbound travel to essentially zero fromMarch 2020 onward, and total number of contracts fell 66.1% YoY to 960,000. Of overseas rental contracts, 34.5% were
corporate customers and 65.5% were individuals. In contrast, total number of contracts in FY12/19 were 2,830,000, up
26.8% YoY, with overseas rental contracts consisting of 36.9% corporate customers and 63.1% individuals.
In this segment, the company procures local network access (mobile phone data access) by negotiating with telcos incountries around the world in order to develop its usable data volume, connection quality (such as speed), and otherproprietary services, and rents out mobile WiFi routers and other devices that provide access for people traveling to thesecountries. In addition to Vision (parent company), consolidated subsidiaries Best Link, Vision Mobile Korea Inc., Vision
Mobile Hawaii Inc., and Vision Mobile Taiwan Ltd. carry out this business.

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The company is expanding its service offerings rapidly in line with burgeoning demand for mobile access from travelers.
Despite only starting in FY12/12, the Global WiFi business had grown through FY12/19 to account for over half of thecompany’s sales. After turning the corner into the black in FY12/14, the segment continued to see steady profit growth, andin FY12/19, it accounted for roughly 75% of total segment profit before adjustments.

Services
Classifications
The Global WiFi segment can be broadly broken down into overseas business (travelers from Japan to overseas and overseasto-overseas travelers) and domestic business (overseas visitors to Japan and domestic travelers). Services are provided under
the Global WiFi® brand overseas, and primarily under the NINJA WiFi® brand in Japan. With the help of partnercompanies, the company provided overseas coverage in more than 200 different countries and regions (as of the end of
December 2020).

Global WiFi service overview
Overseas (Global WiFi®)

Domestic (mainly NINJA WiFi®, WiFi Rental.com)
Travelers from overseas visiting Japan (inbound)
Travelers from Japan overseas and overseas-toJapan’s domestic market (such as relocation,
overseas
temporary repatriation, hospitalization, andteleworking)
Mobile WiFi router rental (connected to the telco
Mobile WiFi router rental (connected to domestic
network at the destination)telco network)
Ancillary services (repairs, batteries and accessories) Ancillary services (repairs, batteries and accessories)<4G High-speed plan (standard pricing)>
JPY500–3,170/day (single country plan).
JPY440–1,430/day* Maximum price is for unlimited plan
* JPY1,470–3,180/day (multi-country plan)

TargetServices

Charges (fixed)

Usage of data telecommunications services in each
Usage of data telecommunications services incountry (usage limits apply)
domestic market (usage limits apply)
Routers purchased from manufacturers or as a set
Routers as a set with network accesswith network accessDirect websites, smartphone apps, airport counters,
Direct websites, airport counters, partners, affiliates
corporate sales, partners, affiliates
Procurement optimized by region, based on demand forecasts.
Total procurement of telco data managed based on individual data usage volumes
Inventory optimized at individual shipping centers (collection
setup
shipping)

Procurement method

Sales channels
Operations⇒⇒

Source: Shared Research based on company data

Overseas (Global WiFi®) business features
The company has direct contracts with telcos worldwide. This enables it to provide a low-price, high-quality internet
environment for the mobile WiFi rental service it offers to outbound travelers (going from Japan to overseas). Per thecompany, in order to boost customer satisfaction and capture repeat customer demand, it is important to pay attention not
only to price, but also to quality. As a result, Vision mainly obtains internet access overseas from major telcos, as it places
importance on communication speed and breadth of coverage.
The company has subsidiaries in regions with strong travel demand including South Korea, Hawaii, Hong Kong, Singapore,
Taiwan, the UK, Vietnam, Shanghai, France, and Italy. These overseas subsidiaries primarily work to procure network accessfor each respective region, but the subsidiaries in South Korea, Hawaii, and Taiwan—like in Japan—provide the Global
WiFi® service to both outbound and inbound customers. The company also opened offices in New Caledonia and the US(California) in 2016.
There are four steps in the process to rent a mobile WiFi router: web application/payment (credit card payment), device
handover, usage, and device return.
Devices may be picked up and returned at 34 pickup/drop-off counters in major airports. There is a home courier service forcustomers who cannot pick up or return the device at the airport. Local pickup and return are available in Hawaii and Korea.
Further, the company has a 24-hour/365-day support system via AI chat support, telephone, email, and social media. In
certain overseas countries, it has help desks with Japanese-speaking staff.
According to the company, it offers the lowest prices in the industry. It also said that it operates in the most countries withaccess to high-speed 4G-LTE communications and large data volumes (unlimited plan was available in 91 countries as ofMarch 31, 2021). Further, Vision says that it offers the most pickup points in the industry. As such, over 50% of the company’scontracts are from repeat clients, although there is some seasonal variation.

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Domestic (NINJA WiFi®, WiFi Rental.com) business features
The domestic and overseas operations are similar. The company procures domestic telecommunications access from threecompanies: NTT DoCoMo (TSE1: 9437), KDDI (TSE1: 9433), and Softbank, a unit of Softbank Group (TSE1: 9984). The service
flows are similar both in Japan and overseas (web registration and credit card payment) and is available in five languages:
Japanese, English, traditional Chinese, simplified Chinese, and Korean. The pickup and drop-off points are 17 airports inJapan, with courier services to clients’ hotels as well as the company’s Shinjuku office and partner hotels and tourist
information centers.

Competition
Telco companies’ roaming services* compete with Vision’s services. Compared to roaming services, Vision said it had
several advantages: lower prices (up to 89.9% lower than fixed price international roaming plans), faster speeds (contracts
and collaboration with high-quality local telcos), ease of connection (merely requires switching power on), multi-device
connectivity (possible to connect simultaneously with multiple people/devices). Compared with WiFi hot spots**, thecompany argues that it has a wider coverage area (usable even on the move), faster speeds, ease of connectivity, andincreased security. In particular, corporations have strong security needs and this is a major factor in customer acquisition.
*Roaming service: refers to ability to access infrastructure of another telecommunications company that partners with atelco service provider outside the contracted service provider’s service area.
**A WiFi hotspot is a shop or other public space where it is possible to connect to the internet using a wireless LAN(WiFi).

Post-COVID plans
The following describes the strategies the company had employed prior to the COVID-19 outbreak, and it is theunderstanding of Shared Research that it will re-engage in those strategies once the pandemic is overcome. The company
aims to capture demand from overseas visitors to Japan and Japanese travelers going overseas, the number of whom it
expects to grow over the medium term. It plans to leverage its customer data to expand media services (ads linked to thedestination, local information for inbound travelers) and data supply services (offer retail operators big data analysis based on
location data). Through such initiatives, the company aims to increase user convenience and boost revenues. The company
also said that it is putting a great deal of effort into developing ancillary services (such as tablet services, 360° camera
services, translation device, and suitcase rentals) to boost ARPU.

Business model
The revenue of this business is a function of the number of mobile WiFi routers shipped multiplied by average revenue peruser (ARPU)*. Costs are the sum of data telecommunications charges in individual countries + the cost of procuring mobile
WiFi routers + ancillary equipment procurement costs.
The company is focused on increasing customer numbers and improving procurement volumes, terms and conditions basedon regional or seasonal demand forecasts. It also aims to increase turnover rates (utilization rates) for its mobile WiFi routerrentals.
*ARPU: (telecommunications charges/day + ancillary service charges) times number of days

Number of contracts
In FY12/20, the business had 960,000 contracts (total rental deals), a decline of 66.1% YoY. Of these, roughly 33% were forcustomers traveling overseas and roughly 67% were for users in Japan. In FY12/19 (before outbreak of the COVID-19
pandemic), the business had 2,830,000 contracts (total rental deals), increasing 26.8% YoY. Of these, roughly 76% were fortravelers from Japan going overseas. According to the company, 65.5% of overseas rental contracts in FY12/20 wereindividuals (previous year: 63.1%) and 34.5% companies (previously year: 36.9%).

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Global WiFi business rental contract

Source: Shared Research based on company data

Vision’s global WiFi usage rate by overseas travelers

Source: Shared Research based on company data

ARPU
ARPU averages approximately JPY7,500 (daily charge is roughly JPY1,000, and average rental period is around seven toeight days). ARPU for individuals is lower than that for businesses. Sales to individuals tend to be concentrated in the springand summer holidays. Corporate demand is somewhat slow in the July–September quarter, but relatively stable throughout
the year. Q3 is the busiest period as it benefits from overlapping demand from both summer vacations and business trips.
ARPU tends to increase with distance and number of days users travel. ARPU is high in Europe and the US, lower inSoutheast Asia, with inbound users in Japan somewhere in the middle. Sales from Japanese people traveling abroad are
highest in the US, Korea, and China, followed by Taiwan. Business expansion in the relatively low ARPU regions of Asia is afactor in the falling average ARPU. However, from 2019, the company introduced an unlimited traffic plan in response tocustomer feedback that they did not want to worry about daily usage caps, available in 91 countries as of end-March 2021.
This is making average ARPU rise. ARPU had been on a downward trend through FY12/18 due to an increase in individual
users, but turned up YoY in FY12/19, and increased further in FY12/20.
The company aims to improve ARPU by expanding its plans and enhancing its optional services.

Cost structure
Around two thirds of cost of sales are network-usage payments to telcos, with the remainder being device depreciation. The
company said that it was able to keep network utilization rates at nearly 100% through effective management. Devices are
expensed on a two-year depreciation schedule. Note that the company is able to maintain its profit levels by controlling thecost of sales, since it utilizes a system that adjusts network usage in line with busy or quiet periods, which in turn affects the

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cost of using those networks. The company created this system by developing a proprietary management system andnegotiating with telcos.
The company aims to reduce costs by improving operations and reducing procurement costs by expanding its business scale.
It achieved even further cost reductions in FY12/20 by switching to pay-as-you-go contracts with telecommunications
companies worldwide. It also minimized any losses stemming from the drop in demand due to COVID-19 by reassigningsome of its workforce to other lines of business that expected to see demand, and cutting spending on outsourcing in airportand logistics-related processes.
Reducing telecommunications CoGS
Improve procurement contract terms by securing volume discounts*1 (lower rates as well as terms unique to Vision)
Utilize next-generation telecommunications technology that utilizes SIMs in the cloud*2
Reduce surplus inventory (including line accounts) with more accurate order forecasting*3*1 According to the company, Vision is the largest procurer of network access in the world. Through successful
negotiations with network providers around the world, it has worked to lower its network procurement costs.
*2, 3 The company indicated that as of end-FY12/20, roughly 94% of its total rental contracts made use of cloud WiFi
routers. Conventional WiFi routers need different SIM cards for each country in which WiFi service is used (in otherwords, a WiFi router with a maximum of nine SIM-card slots, can only be used in nine countries). Conversely, serverbased management of SIM cards ensures SIM cards are switched automatically to the appropriate country as users travel
around. This not only improves the efficiency of shipping operations, but also contributes to an increase in network
usage (while reducing surplus inventory). Vision presently operates a global IoT platform that allows it to monitor usage
conditions for its customers across virtually the entire world. This in turn allows the company to take various types ofaction in response to customer usage conditions.

Improving operational efficiency
Use AI systems to help reduce call centers’ operating costs
Increase use of automated systems, such as “Smart Pickup” (automated lockers for WiFi router pickup and return)*4 and“Smart Entry” (self-service kiosks) *5 in some locations as well as install additional terminals (reduce service counter
operation costs) Increase operational efficiency of manned service counters to improve sales ratio for optional services*4 Within a matter of seconds, users can pick up and drop off a router from a locker that is automatically assigned tothem online. The locker is opened by tapping a QR code displayed on the screen of a user’s smartphone.
*5 The self-service kiosks feature multi-language support that is developed by the company. They have access tocustomers’ usage patterns and requests (e.g., first time or tenth time using the service, previous requests made to callcenters), which contributes to superior service.

Sales channels
End users can apply to use the services through websites, apps, corporate sales, partners (companies that have concluded
sales agent contracts or franchise contracts), and airport counters.

Global WiFi (NINJA WiFi®) sales channels
Sales channel
Direct websites
App
Affiliates
Corporate sales
Partners
Airport counters

Description
Apply for Global WiFi® on the internet. The application website attracts users through the company’s homepage and web marketingthrough product specialist websites
Apply via the company’s smartphone app downloaded by the end-user
Applications via websites operated by affiliates
Ongoing applications for services by registered corporate users, such as government agencies, companies with frequent overseas traveland other corporate users. (Price discounts and corporate billing services available.)
Apply via partner companies (such as travel agents, insurance agents, and credit card companies), agents and franchisees
Apply at airport counters

Source: Shared Research based on company data

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Source: Shared Research based on company data

Information and Communications Service segment
Information and Communications
Service

FY12/13

FY12/14

FY12/15

FY12/16

FY12/17

FY12/18

FY12/19

FY12/20

FY12/21(JPYmn)

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Est.

Sales

7,312

6,411

6,440

6,948

7,104

7,774

8,955

8,797

-

-12.3%

0.5%

7.9%

2.2%

9.4%

15.2%

-1.8%

79.4%

62.9%

51.6%

46.8%

40.5%

36.2%

32.8%

52.8%

-

566

724

904

1,025

1,173

1,219

1,363

1,520

n.a.

-

27.9%

24.8%

13.4%

14.4%

3.9%

11.9%

11.5%

-

7.7%

11.3%

14.0%

14.7%

16.5%

15.7%

15.2%

17.3%

-

151.3%

79.4%

60.8%

48.5%

44.0%

35.4%

31.0%

146.6%-

YoY% of total
Operating profit
YoY
Operating profit (excl. adjustments)% of OP (incl. adjustments)

n.a.
-

Source: Shared Research based on company data

Segment overview
The Information and Communications Service segment accounted for 52.8% of consolidated sales and 146.6% of operating
profit in FY12/20 (32.8% and 31.0% in FY12/19). It targets mainly startups and ventures as well as SMEs, and arranges
telephone lines and other types of telecommunications services, mobile communication device sales, office equipment
sales, and builds websites for its customers. The company and consolidated subsidiary Best Link are involved in this business.
Sales in the segment fell temporarily in FY12/14 as the company changed the weightings of products it handled. Due to arising share of highly profitable products and increased productivity, profits have continued to rise.

Services and business model
Sales structure
As information and telecommunications technology continues to evolve, the segment makes use of web marketing activities
as a tool to target startups and general corporations. The idea is to grasp customer needs to offer the best products andservices at the optimal timing. The company also conducts door-to-door sales leveraging its headquarters, 12 sales offices
across the country, and numerous partner corporations, which have given it a nationwide marketing presence.

Customers
Almost all of the segment’s customers are corporate clients. There are roughly over 30,000 new signups per year. Around
60% of these new contracts are with startups, which numbered 16,000 in FY12/20. According to Ministry of Justice statistics,
118,532 new companies were established in 2020. This means Vision does business with one out of every ten of the newly
created companies every year. The company is focusing on capturing more startup clients. The aim is to increase the number
and type of services it provides them as their business grows. Per the company, bankruptcies amongst startups are declining,
and its clients tend to be particularly cost-conscious, so bankruptcy rates are lower than in the general market.

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Revenue
Revenues in this segment can be broadly divided into sales revenue from selling devices and office equipment, fees fromtelcos and power companies for arranging services (one-time commissions, and monthly commissions or “stock incentives”),
and revenue from office equipment maintenance services. When contracts are signed, revenue from devices and officeequipment and one-time commissions are booked as sales; subsequent monthly revenues comprise the monthly stockincentives and office equipment maintenance revenues.
The company’s business model entails setting low prices for devices and office equipment and collecting monthly revenues,
to lighten the burden on startups. While the company has not disclosed details, we understand that monthly revenues suchas monthly commissions (“stock incentives”) and office equipment maintenance revenue significantly contribute to profits as
the company’s business model emphasizes continued business with its clients.

CoGS
Costs for signing up mobile phone subscribers include handset cost (no CoGS related to fixed-line telecommunications andelectric power businesses). Costs for office equipment and security businesses include hardware and software, andoutsourcing costs (commissions paid to sales agencies). According to the company’s FY12/20 earnings presentationmaterials, the Information and Communications Service segment had gross profit of JPY4.7bn (53.4% GPM; compared to
FY12/19 gross profit of JPY4.5bn, 50.6% GPM). The breakdown of sales by subsegment (detailed below) is as follows:
FY12/20 Information and Communications Service segment gross profit of JPY4.7bn (53.4% GPM) breaks down to 15.3%
for fixed telecommunications, 20.8% mobile communications, 11.2% broadband, 27.6% office equipment sales, 10.5%
internet media, 11.7% eco solutions, 2.2% construction related, and 0.7% other.
FY12/19 Information and Communications Service segment gross profit of JPY4.5bn (50.6% GPM) breaks down to 21.9%
for fixed telecommunications, 14.5% mobile communications, 10.9% broadband, 30.5% office equipment sales, 9.3%
internet media, 10.5% eco solutions, 2.4% construction related, and 0.0% other.

SG&A expenses
Typical SG&A expenses are personnel expenses, advertising and promotional spending, and rent for call centers and otherfacilities.

Subsegments
The revenue breakdown for subsegments in the Information and Communications Service segment are high for officeequipment sales, mobile (cell phone) communications, and fixed telecommunications (landline) businesses, followed by thebroadband (internet) business, and the internet media business (such as website development). Recently, the company has
been adding new products to meet customer needs, such as the electric power service Haluene Denki (power sales agent;eco solutions business).

Telecommunications access intermediary services
In this market, the company operates mobile, landline, and broadband businesses. It involves the sale of devices andobtaining network access (from telcos) for mobile phone, landline, and internet connections, as well as installations. Revenue
comes from handset sales of landline and mobile phones (one-time revenue) and commissions for arranging network access(either one-time commissions when contracts are signed or monthly commissions*).
*Monthly commissions: Payable by the telco, and based on monthly payments made by the customer to telcos. Whenhandsets are upgraded, the payment period is extended. When the customer cancels the contract, payments stop.

Office equipment sales and after-sales support
The office equipment sales business’s main source of selling copy machines (one-time revenue), and providing after-sales
services (monthly revenues). The company procures copiers from manufacturers, which it sells to customers. While somesales involve a single payment, they are typically five-year leases. For leasing sales, the company sells the copier to a leasing
company and receives revenue. The customer signs a contract with the leasing company, as well as an after-sales service
contract for the copier with Vision.
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In addition to monthly base fees for using after-sales services, customers pay additional fees depending on frequency of use.
The company sets copier prices low to reduce the burden on customers, and recoups revenues through after-sales service
fees. As a result, revenue from copier sales comprises a substantial share of sales, but after-sales service revenues are a big
contributor to profits.

Website services
The internet media business provides MORPH, a service which develops PC and smartphone compatible websites as its
mainstay business. The company provides clients with the expertise it has built up operating its own websites to support theirbusinesses (development of over 100 sites a month). While the contribution to profits is small, this business helps stabilize
customers’ businesses, and contributes to expanding sales of Vision’s other products. Initial fees for creating a website startfrom JPY100,000, with monthly charges starting from JPY50,000 (both as of December 2020 and excluding tax).
The company also launched its “Vision Crafts!” simple website development service in FY12/20. 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.

Key group companies
Group companies and business areas
Vision and group companies
VisionBest Link Inc.
Vision Mobile Korea Inc.
Vision Mobile Hawaii Inc.
Vision Mobile Taiwan Ltd.
Vision Mobile Hong Kong Limited
GLOBAL WIFI.COM PTE. LTD.
GLOBAL WIFI.UK LTD
Vision Mobile Shanghai Ltd.
Global WiFi France SAS
Vision Mobile Italia S.r.l.
Vision Mobile USA CORP.
(US; incorporated in California)
Vision Mobile New Caledonia SAS
VisionMembers Net Inc.

Reporting segment

Sub segment

Business description

Overseas business

Mobile WiFi router rental business.
Access to overseas telco networks
aimed at travelers from Japan tooverseas and overseas-to-overseas
travelers.

Domestic business

Mobile WiFi router rental business.
Access to domestic telco networks
aimed at travelers from overseas toJapan and domestic tourists andbusiness travelers.

Global WiFi

Fixed telecommunications business

VisionMobile telecommunications business

VisionBest Link Inc.
Member Net Inc.

Information and Communications
Service

Broadband business

VisionAlpha Techno Inc.
BOS Inc.

Office equipment sales

VisionInternet media business

VisionVision Ad Inc.
Vision Digital Marketing Inc.

Other

Arranges access to Softbank’s Otoku
Line landline services
Arranges sale of Softbank’s mobile
handsets and access to mobile phoneservices
Arranges access to broadband services
such as FLET’S, offered by Nippon
Telegraph and Telephone East
Corporation (NTT East) and Nippon
Telegraph and Telephone West
Corporation (NTT West).
Sales of MFPs*, business phones andUTM** devices primarily from Canon
Sales of advertising materials (website
development) on the internet
Media business. Agent for ASKUL
Corp.’s ASKUL telecommunication
sales business

Source: Shared Research based on company data
Note: Vision Vietnam One Member Limited Liability Company is involved in systems development and database construction for the company.
Note: Sales from other segments comprise less than 1% of the total, so are not included above.

*MFP (multifunction printer): umbrella term for digital copier or laser facsimile, with several functions such as copying,printing, facsimile and scanning** UTM (Unified Threat Management): security measure available to companies, whereby one security device has
multiple functions and whose use enables all-inclusive, integrated solutions. Security devices used for these purposes
are known as UTM devices

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Profitability analysis
Profit margins

FY12/11

FY12/12FY12/13

FY12/14

FY12/15

FY12/16

FY12/17

FY12/18

FY12/19(JPYmn)ParentParent

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

FY12/20
Cons.

Sales

6,999

6,527

9,204

10,185

12,485

14,844

17,55521,50427,31816,654

Cost of sales

4,005

4,533

5,575

6,221

7,394

8,854

11,628

7,861

Cost ratio

43.5%

44.5%

44.7%

41.9%

42.1%

41.2%

42.6%

47.2%

12,650Gross profit

5,199

5,652

6,910

8,622

10,161

15,6908,794

Gross profit margin

56.5%

55.5%

55.3%

58.1%

57.9%

58.8%

57.4%

52.8%

SG&A expenses

5,189

5,366

6,105

7,332

8,372

10,166

12,365

8,690

SG&A ratio

56.4%

52.7%

48.9%

49.4%

47.7%

47.3%

45.3%

52.2%

Operating profit
Operating profit margin

10

286

805

1,290

1,789

2,484

3,325

104

0.1%

2.8%

6.4%

8.7%

10.2%

11.6%

12.2%

0.6%

EBITDA

117

423

984

1,608

2,267

3,335

4,414

636

EBITDA margin

1.3%

4.2%

7.9%

10.8%

12.9%

15.5%

16.2%

3.8%

0.0%

-

0.8%

2.7%

4.7%

5.5%

6.9%

7.1%

8.1%

-

ROA (RP-based)

Net margin

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%

Total asset turnover

2.45

2.09

2.64

2.68

2.01

1.61

1.64

1.72

1.90

1.26

555

470

649

704

745

1,167

1,156

842

Current ratio

150.9%

145.8%

366.7%

312.7%

310.7%

278.9%

279.3%

353.8%

Quick ratio

120.7%

129.9%

344.6%

289.5%

268.3%

255.0%

255.3%

324.9%

0.17

0.29

0.41

0.65

0.59

0.00

0.00

0.00

Financial ratios

Working capital (JPY'000)

OCF / Current liabilities
Net debt / Equity

-

-

-

-

-

-

-

OCF / Total liabilities

0.2

0.3

0.4

0.6

0.6

0.0

0.0

0.0

Change in working capital

555

-85

179

55

41

422

-10

-314

-

Source: Shared Research based on company data
Note: Figures may not match company numbers due to differences in rounding methods.
Note: Debt ratios calculated based on net debt.

Cost structure
After launching the Global WiFi business (mobile WiFi router rental services), the company posted double-digit sales
increases from FY12/13 to FY12/19. The CoGS ratio rose slowly between FY12/13 and FY12/15, but held steady at around
42% from FY12/16 to FY12/19. In FY12/20, in spite of the substantial drop in sales, the company contained the CoGS ratio
to 47% by switching to pay-as-you-go contracts, which dramatically reduced procurement costs of overseas network access.
The SG&A expense ratio has also been declining steadily due in part to implementation of web-based efficient marketingand improved operations as it improves the efficiency of device delivery (Smart Pickup, Smart Entry, Smart Check) andestablishes a system that manages SIMs in the cloud in its Global WiFi business. The SG&A expense ratio was 45.3% in
FY12/19, 11.1pp lower than in FY12/13. In FY12/20, depressed demand brought down costs in most categories, while thecompany reduced other cost items as well, but due to the precipitous drop in sales, the SG&A ratio rose to 52.2%.
Cost structure

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

17,55521,50427,31816,654

Cost of sales

4,005

4,533

5,575

6,221

7,394

8,854

11,628

7,861

Cost ratio

43.5%

44.5%

44.7%

41.9%

42.1%

41.2%

42.6%

47.2%

SG&A expenses

5,189

5,366

6,105

7,332

8,372

10,166

12,365

8,690

SG&A ratio

56.4%

52.7%

48.9%

49.4%

47.7%

47.3%

45.3%

52.2%

Personnel

1,300

1,436

1,577

1,810

1,999

2,196

n.a.

n.a.

Promotion

1,150

782

873

983

1,131

1,681

n.a.

n.a.

-

498

673

839

1,062

1,625

n.a.

n.a.

Provisions for doubtful accounts

47

27

21

22

34

51

n.a.

n.a.

Provision for bonuses

19

21

77

161

210

225

n.a.

n.a.

2,673

2,602

2,884

3,518

3,937

4,389

n.a.

n.a.

10

286

805

1,290

1,789

2,484

3,325

104

0.1%

2.8%

6.4%

8.7%

10.2%

11.6%

12.2%

0.6%

Commission fees

Other
Operating profit
Operating profit margin

Source: Shared Research based on company data
Note: Figures may not match company numbers due to differences in rounding methods.

Market and value chain
Market overview
The company receives fees from outbound (from Japan to overseas), inbound (from overseas to Japan) and overseas-tooverseas (travelers from a region where the company has an office to other countries abroad) travelers in its Global WiFi
business. Startups are the main target of the Information and Communications Service business.
The company said that in the Global WiFi business the key indicators are foreign and domestic traveler numbers, and in the
Information and Communications Service business, the number of companies established.

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Japanese travelers abroad
From 2010 through 2015, the number of Japanese travelers abroad was influenced by various external factors: theTohoku earthquake in 2011, yen strength in 2012, and yen weakness in 2013. After bottoming out at 16,214,000 in 2015,
the number of Japanese travelers going overseas had been rising up through FY12/19.
According to statistics compiled by the Japan National Tourist Organization (JNTO), the number of Japanese travelers
going overseas hit 20,081,000 in 2019, up 5.9% over the previous year and the highest figure recorded for two years
running since record-keeping began back in 1964. The previous record was 18,490,000 set in 2012, when the numberof overseas travelers jumped sharply. The rise in overseas travel is attributed to a number of factors, including strong
corporate earnings that permitted more overseas business travel and promotion of work style reform that increased theamount of leisure time and led to more individuals traveling overseas as well. In 2020, Japanese travelers going overseas
plunged 84.2% YoY to 3,174,000 due to the impact of the COVID-19 pandemic.
Notwithstanding, the rate of smartphone ownership is expected to continue rising steadily in 2018. As shown in the graphbelow, the household penetration rate for smartphone in Japan was stuck around 72% through 2016 then jumped to79.2% in 2018 and 83.4% in 2019.

Japanese travelers abroad and smartphone penetration

Source: Shared Research based on JNTO materials, and Ministry of Internal Affairs and Communications, 2016 Communications Usage Trend Survey (released June 8, 2017)

Number of overseas travelers to JapanThe number of foreign visitors to Japan in 2019 was 31.9mn (+2.2% YoY). The increase comes even as a series of natural
disasters worked to hold down the number of travelers coming to Japan during part of the year, as by the end of the year
the numbers had bounced back. The number of foreign visitors has now increased for eight consecutive years starting in
2011, and in 2019 reached the highest level it has ever been since the Japan National Tourist Organization (JNTO) started
tracking foreign visitor numbers in 1964, but the number plummeted by 87.1% YoY in 2020 due to the impact of the
COVID-19 pandemic.

Foreign visitors to Japan

Source: Shared Research based on Japan National Tourist Organization (JNTO) materials and the Japanese government’s Council for the Development of a Tourism Vision to
Support the Future of Japan meeting (held in March 2016)

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Global tourism numbers
According to the United Nations World Tourism Organization (UNWTO), the number of travelers between countries had
been rising globally until 2019, representing a substantial market of over 1.4bn persons.
Although it currently does not cover parts of Africa, the company’s Global WiFi service can be used in over 200 regions
worldwide, so if it opens an office in a given region, it already has the base to meet demand of that area.
In addition to its current market expansion in Asia (Taiwan and South Korea), Vision aims to continue expanding its
presence by increasing the number of local bases beyond North America and other locations with many overseas
travelers, to capture burgeoning demand.

International tourist arrivals

Source: Shared Research based on UNWTO and other materials

Number of registered companies
According to Ministry of Justice figures, the number of companies being established in Japan has been on a rising trend
since 2009. In 2019, 118,532 companies were established (87,871 joint stock companies and 30,566 limited lability*
companies). Compared to 2009, when the number bottomed, the number of registered companies increased 1.38x(1.10x for joint stock companies and 5.30x for limited liability and other types of companies).
Vision said that its main targets in the Information and Communications Service business are startup companies, because
startups need more information and communications services as their business grows. Vision aims to maximize profits byoffering low-priced telecommunications services including pre-owned equipment in the initial stages, and subsequently
providing various additional services as the startup grows.
The company figures that it does business with one out of every ten of the new companies started each year.
*A new company format established in the 2006 corporate law revisions. The key advantages versus joint stockcompanies and individually owned businesses are low setup costs and limited liability. As a result, the number of small
startups and SMEs has been on a rising trend.

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Source: Shared Research based on Ministry of Justice materials

Competition
Global WiFi
Operators involved in mobile WiFi router services for the outbound market similar to Vision include Telecom Square, Inc.
(not listed) and XCom Global (formerly Inter Communications, not listed). In the past, competitors oftentimes procured
networks through intermediaries. In contrast, Vision has been—and prioritizes—directly negotiating with local telcos toprocure network access since it first started its business. The company says that this gives it an advantage over its twocompetitors, as it purchases network access based on its own terms, allowing the company to control costs and develop
original services such as large-volume plans. Vision’s sales are higher despite being a late entrant. In FY12/15, Vision’s
Global WiFi segment sales were over 1.6x sales of its two main competitors, giving it clout to negotiate prices. Other
competition is primarily roaming services offered by major telcos, but Vision’s prices are roughly one third of these services.
Free WiFi hotspots also compete, but Vision’s advantages are broad coverage and connectivity on the go. Further, there is no
hacking risk due to the way it is set up, and having highly secure connections helps capture the corporate user market.

Comparison of major mobile internet service
Connection
methodology
Free WiFi hotspots
International roaming(overseas packet)
SIM (local procurement)
Global WiFi® (NINJA
WiFi®)

Price

Service area

Communication speed

Good
Poor
Average
Security concerns. Usable in limited areas, and slow speeds in some places.
Poor
Average
Average
Pricey (JPY980–2,980) and quality can be patchy. Risk of usurious charges.

Management

Security

Good

Poor

Good

Good

Average
Average
Good
Poor
Good
Knowledge needed to purchase locally. Operation complex with regular recharges necessary on cheap plans.
Good
Good
Good
Good
Good
Procures quality network access in collaboration with local telcos as a rule. This means low prices and fastest local service speeds.
Mobile WiFi routers already set up, so use is simple and no trouble to operate.

Source: Shared Research based on company data

Information and Communications Service
There are many companies involved in selling telecommunications access and office equipment. Some of the majors are
Otsuka Corp. (TSE1: 4768) and Hikari Tsushin (TSE1: 9435). However, Otsuka Corp. targets major corporations while Hikari
Tsushin covers a broad range of customers including individuals. Vision differentiates itself by targeting startups.

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Strengths and weaknesses
Strengths
Niche market focus: The company operates two key businesses: the Global WiFi business, which rents WiFi routers, andthe Information and Communication Service business, which sells office equipment and provides IT and communications
services. In the Global WiFi business, the company possesses more than 50% share of the market, boasting an advantage
by procuring communication lines with the support of scale merit. In the Information and Communication Service
business, the company is cultivating its key customer base among newly established companies and SMEs. This is adistinctly different segment than the large corporations targeted by major competitors. Because Vision’s customers arestartups and SMEs, sales of a single product to any one customer are low. However, by selling multiple additional services
to customers as they grow, Vision has been able to increase revenue per customer. Startups and SMEs are attracted by the
low initial setup costs, enabling Vision to expand its customer base and achieve stable growth.
Highly efficient sales model using Web marketing: The company conducts sales visits focusing on customers that havedemonstrated interest. In 2003, it gradually shifted from telemarketing-focused sales to utilization of web marketing, andhas been able to conduct efficient sales activities to potential customers who make enquiries from the website. Customers
acquired from websites tend to be more active and have a strong propensity to contract, which has increased the contract
rate. (For example, copier sales per employee are roughly 3x the industry average). This leads to a virtuous cycle ofreduced employee turnover and accumulated sales knowledge by marketing staff. The company’s concierge operations(CLT) for continuing business with existing customers and the sales team’s ability to create demand for other products leadto effective upselling and cross-selling.
Direct network access allows provision of high-quality internet service at low prices: In the Global WiFi business, thecompany offers unique low cost and high quality (faster and more data) telecommunications services compared tocompetitors. This is because Vision has been procuring mobile network access directly from major telcos in Japan andabroad since the inception of its business, while competitors often purchased networks through intermediaries. In order
to distinguish itself from companies who entered the business before it, Vision negotiates directly with telcos to expand
its services and lower costs. To achieve this, the company has been establishing local subsidiaries to acquire telecom
business permits in different countries. The company also benefits from having the leading market share and purchasing
clout. This is partly because Vision used cash flow from its Information and Communications Service business to help it
get the Global WiFi business up and running in a short period of time.

Weaknesses
Limited time to prove itself to clients: The company is cultivating its key customer base among startups and SMEs. This is adistinctly different segment than customers targeted by major competitors (large corporations). The company’s core
strategy in the Information and Communications Service business is to focus on startups, and as these companies grow,increase the number of provided services. However, Vision will ultimately have to compete in the same arena as major
rivals as startups grow into medium and large companies. The company aims to maintain continuous customer contact
through CRM initiatives, primarily through the efforts of its Customer Loyalty Team (CLT), a concierge for customers.
Relationships with telcos in the Information and Communications Service business: Vision receives commissions ascompensation for its work as an agent arranging telecoms services provided by telcos. However, commission terms arechanging as this market matures. Telcos’ management policies could change, and they may make major changes to theirterms. In such a case, the company would be unable to avoid an impact on its earnings and finances. For this reason,
Vision is working to expand its range of products, including proprietary products, and improve marketing efficiency.

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Historical performance and financial
statements
Historical performance
1H FY12/21 results (out August 10, 2021)
Summary
1H FY12/21 results
Sales: JPY8.6bn (-10.2% YoY)
Operating profit: JPY654mn (operating loss of JPY15mn in 1H FY12/20)
Recurring profit: JPY681mn (+922.1% YoY)
Net income attributable to owners of the parent: JPY456mn (net loss of JPY1.4bn in 1H FY12/20)

Progress versus forecast
1H sales were 106.1% of the 1H FY12/21 forecast (initial forecast revised upward on May 13, 2021), operating profit 129.1%,
recurring profit 128.0%, and net income attributable to owners of the parent 121.3%. Sales exceeded corresponding
projections in the company's initial forecast by 18.8%, while operating profit surpassed them by 419.3%, recurring profit by462.8%, and net income attributable to owners of the parent by 542.2%.
1H sales were 49.5% of the full-year FY12/21 forecast (revised on August 10, 2021*; 57.8% of full-year result in 1H
FY12/20), operating profit 65.0% (operating loss in 1H FY12/20), recurring profit 66.2% (29.2%), and net income
attributable to owners of the parent 66.6% (net loss in 1H FY12/20).
*Full-year company forecast for FY12/21
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 revisions
The company had withdrawn its earnings forecast for FY12/21 due to the difficulty of making appropriate and reasonableestimates regarding impact from the COVID-19 pandemic. However, it released a forecast based on estimates andavailable information on August 10, 2021.
When formulating its forecast for the Global WiFi business, Vision accounted for impact from the steady acquisition ofdomestic demand and the capture of demand for Global WiFi for Biz, a service that provides permanent internal WiFi
routers for corporate customers. It also applied the assumption of a 25% recovery in overseas travelers in Q4 (compared
to Q4 FY12/19), which also underlay the forecast it released on February 15, 2021. At the same time, the company
excluded anticipated Q4 impact from temporary contract work due to uncertainty about its continuity amid the
pandemic. When formulating projections for the Information and Communications Service business, Vision
incorporated impact from recent strong results and growth in performance from in-house services (monthly fees). It also
accounted for impact on FY12/21 results stemming from the launch of its Vision Denki service (drags of JPY26mn onsales and JPY166mn on operating profit).

Sales
Sales were JPY8.6bn (-10.2% YoY). Sales in the Global WiFi business amounted to JPY3.9bn (-16.6% YoY) while sales in the
Information and Communications Service business (external sales) came to JPY4.7bn (+3.0% YoY).

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In the Global WiFi business, sales declined 16.6% YoY due to an almost complete lack of overseas travelers, a circumstancethat contrasted with conditions in Q1 FY12/20, when the company booked sales from inbound and outbound travelers.
However, sales in Q2 (April–June 2021) grew 82.7% YoY, reaching their highest quarterly level since the emergence of
impact from COVID-19 pandemic in Q2 FY12/20. Sales in Q2 also grew 55.0% compared to sales generated in Q1(January–March 2021). The company actively acquired demand related to a variety of needs associated with WiFi usage inJapan. Sales generated through Global WiFi for Biz (a service that provides permanent internal WiFi routers for corporate
customers) were also robust thanks to proposals related to teleworking. Also providing a boost were sales generated throughcontract-based app confirmation work that constituted a portion of quarantine measures carried out by airport quarantine
stations.
Sales in the Information and Communications Service business grew YoY, driven by changes in the company’s businessstructure (increase in sales of products such as mobile communication equipment and office equipment) and a strong
contribution from sales of mobile communication equipment (for teleworking, and conversion to smartphones). Growth insales was also boosted by contributions from recurring revenue and in-house services (monthly fees), which constitute thecompany’s revenue base. At the same time, performance from new power brokerage incurred downward impact from adecline in the average amount of revenue generated through business consignment fees (brokerage fees). The downturn inthis average stemmed from an increase in electricity retail prices.

Operating profit
Operating profit was JPY654mn (operating loss of JPY15mn in 1H FY12/20). Operating profit was JPY381mn (loss of JPY21mn
in 1H FY12/20) in the Global WiFi business and JPY778mn (-4.8% YoY) in the Information and Communications Service
business.
Sources of upward impact on profit: a decline in cost of sales (+JPY668mn); a decrease in personnel expenses(+JPY176mn); a downturn in advertising expenses (+JPY152mn); and a reduction in other SG&A expenses (+JPY657mn)
Sources of downward impact on profit: a decline in sales (-JPY985mn)
GPM increased 2.0pp YoY to 52.1%, while the SG&A ratio fell 5.7pp YoY to 44.5% and OPM was 7.6% (operating loss in 1H
FY12/20). The cost of sales declined due to lower overseas communication costs on pay-as-you-go contracts with charges
based on communication usage, lower depreciation on rental assets (WiFi routers), and lower outsourcing expenses. The
SG&A ratios 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 graduates hired (13 in 2021 versus 49 in 2020), 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 (such as listing expenses) that accompanied changes in demand andreductions and adjustments to other SG&A expenses. Sales-linked expenses also declined (including packing and shipping
expenses, travel and transportation expenses, supplies expenses, and commission expenses).

Recurring profit and net income attributable to owners of the parent
Recurring profit was JPY681mn (+992.1% YoY). Subsidies received declined from JPY74mn in 1H FY12/20 to JPY4mn. The
company booked JPY23mn in forex gains (versus JPY7mn in 1H FY12/20). Interest expenses fell from JPY4mn in 1H FY12/20
to zero, and fees paid declined from JPY7mn in 1H FY12/20 to JPY4mn.
Net income attributable to owners of the parent was JPY456mn (net loss of JPY1.4bn in 1H FY12/20).

Trends by segment
Global WiFi
Segment sales were JPY3.9bn (-16.6% YoY) and segment profit was JPY381mn (segment loss of JPY21mn in 1H FY12/20).
Sales in Q2 (April–June 2021) grew 82.7% YoY, reaching their highest quarterly level since the emergence of impact
from COVID-19 pandemic in Q2 FY12/20. Sales in Q2 also grew 55.0% compared to sales generated in Q1 (January–
March 2021).
Demand for communications solutions continued amid the need for teleworking and online sales infrastructure during the
pandemic. Vision worked to tap into needs in a variety of areas, including moving, business trips, and various events. The

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company also worked to grow sales and stimulate use of Global WiFi for Biz, a permanent internal WiFi routers forcorporate customers with a domestic use option. Furthermore, as part of border control measures for Japan at airport
quarantine sites, the company's provision of temporary app registration and confirmation services under contract got into fullswing from April 2021. As a result of these efforts, profit grew YoY despite a YoY decline in sales that occurred because
performance in 1H FY12/21 did not receive the boost provided in 1H FY12/20 by demand that the company captured prior
to the outbreak of the COVID-19 pandemic.

Information and Communications Service
Segment sales (external sales) were JPY4.7bn (+3.0% YoY) and segment profit was JPY778mn (-4.8% 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 andprofitability 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 growthstage of its customers.
Sales fell temporarily in the new power brokerage (due to a spike in electricity trading prices) and broadband businesses(delays in construction). However, sales of mobile communications equipment were strong, and unit sales of officeequipment and internet media products rose versus 1H FY12/20, which was under a nationwide state of emergency.
In 1H FY12/21, the eco solutions business accounted for 7.9% of gross profit in the Information and Communications Service
business (versus 12.2% in 1H FY12/20). This decline in share was the result of a decrease in brokerage fee revenue
stemming from a surge in electricity retail prices. In response, the company targeted recovery by shifting personnel tobusinesses such as the mobile communications business. Consequently, this business accounted for 25.4% of gross profit (upfrom 19.4% in FY12/20).
Sales rose YoY thanks to increases in recurring revenue and earnings from monthly fees associated with in-house services.
These increases were primarily driven by performance from the VWS cloud-based monthly subscription work flow service
and expanded sales from a variety of other sources. In 1H FY12/21, in-house services (monthly fees) and recurring revenue
accounted for a combined total of JPY470mn in sales (an overall share of 10.1%). Revenue generated by monthly fees fromin-house services amounted to JPY300mn while recurring revenue came to JPY170mn. The company is currently
strengthening its marketing and enhancing its services in pursuit of its JPY1.0bn target for sales in FY12/21 (sales in FY12/20
amounted to JPY830mn.). Vision anticipates that monthly fee-based in-house services will form the basis for its future
earnings. However, profit declined because earnings generated through these services is recurring, and the company’s focus
on expanding sales associated with these services caused a relative decline in profitability.

Key information
Vision plans to launch a glamping business (see the FY12/21 company forecast section for details) in 1H FY12/22 andanticipates that this business will grow into a third pillar, providing support along with the Information and Communications
Service and Global WiFi businesses.
In August 2021, the company launched its Vision Denki service with its own tariff plans (see the FY12/21 company forecast
section for details). When providing this service, the company functions as an electricity retailer and provides low-voltage
power services primarily to corporations and individual proprietors.

Q1 FY12/21 results (out May 13, 2021)
Summary
In Q1 FY12/21, the company reported sales of JPY3.9bn (-34.2% YoY), operating profit of JPY286mn (-41.4% YoY), recurring
profit of JPY314mn (-36.8% YoY), and net income attributable to owners of the parent of JPY232mn (+99.4% YoY). Whenobserving YoY changes, the reader should note that these figures have been influenced by comparisons with the months ofJanuary and February 2020, when the company was facing no negative impact from the COVID-19 pandemic (and benefitingfrom demand from inbound and outbound travelers).

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Progress versus forecast
Q1 sales reached 48.3% of revised 1H FY12/21 forecast* announced May 13, 2021 (Q1 FY12/20 sales reached 62.2% of 1H
FY12/20 results), operating profit reached 56.4% (versus an operating loss in Q1 FY12/20), recurring profit reached 59.0%(744.9%), and net income attributable to owners of the parent reached 61.7% (versus a net loss in Q1 FY12/20).

*Upward revisions made to the company’s 1H FY12/21 forecast
When it announced its financial results for Q1 FY12/21, the company released the following revisions to its 1H FY12/21
forecast. Amid impact from states of emergency, the company acquired COVID-19-related demand (including teleworkingrelated demand and demand for the establishment of online learning environments) from entities such as companies andcommercial facilities in both segments. As a result, the company now projects higher sales and profit than it had initially
expected.
Sales: JPY8.1bn (previous forecast was JPY7.3bn)
Operating profit: JPY507mn (JPY126mn)
Recurring profit: JPY532mn (JPY121mn)
Net income attributable to owners of the parent: JPY376mn (JPY71mn)

Withdrawal of the company’s full-year FY12/21 forecast
The company has withdrawn its full-year FY12/21 forecast because the impact of the COVID-19 pandemic on businessactivities remains uncertain and the business environment differs from the assumptions made in the previous forecast(February 15, 2021), making it difficult to make accurate forecasts. The previous forecast assumed a 25% recovery in overseas
travelers in Q4 FY12/21 compared to Q4 FY12/19.

Sales
Sales were JPY3.9bn (-34.2%, or JPY2.1bn, YoY). The Global WiFi business generated sales of JPY1.5bn (-54.7% YoY), while
the Information and Communications Service business generated (external) sales of JPY2.4bn (-6.2% YoY).
Sales in the Global WiFi business declined 54.7% YoY primarily because these sales figures were compared to earlier
numbers generated prior to the COVID-19 pandemic’s spread in Japan, when the company was benefiting from demand fromoutbound and inbound travelers. However, the company put for aggressive efforts to capture domestic WiFi demand, andQ1 FY12/21 saw the highest quarterly sales since before the impact of the pandemic became apparent in Q2 FY12/20 (Q1sales were JPY1.5bn, versus a quarterly low of JPY1.3bn in Q3 FY12/20).
Sales in the Information and Communications Service business decreased 6.2% YoY. This decline was the result of a decreasein sales due to sales promotions focusing on monthly subscription services with an eye to future earnings growth, and adecrease in sales from new power brokerage services caused by a temporary surge in electricity trading prices. Moving
forward, the company will record sales generated by services for which customers are billed monthly (subscription services)in fixed amounts each month rather than recording them collectively, as before.

Operating profit
Operating profit was JPY286mn (-41.4%, or JPY202mn, YoY). Operating profit declined 63.9%, or JPY118mn, in the Global
WiFi business and 20.7%, or JPY410mn, YoY in the Information and Communications Service business. Operating profit in
the Global WiFi business showed the highest quarterly performance since before the impact of the pandemic became
apparent in Q2 FY12/20 (the quarterly low was operating loss of JPY347mn in Q2 FY12/20).
Factors affecting YoY change in operating profit
Upward impact: a JPY974mn decline in cost of sales, a JPY200mn decrease in personnel expenses* 1, a JPY123mn
downturn in advertising expenses* 2, and a downward slide of JPY549mn in other SG&A expenses* 3
Downward impact: JPY2.1bn decrease in sales

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41

*1: Primarily due to the expiry of contracts for temporary staff, including those employed at shipping centers and airport
counters*2: Due in part to cutbacks on expenditures such as website listing ad costs in accordance with demand*3: Primarily resulting from reviews and subsequent reductions of various costs and a decline in sales-linked expenses(such as packing and shipping expenses, travel and transportation expenses, supplies expenses, and commission
expenses)

GPM increased 1.0pp YoY to 55.3% while the SG&A ratio rose 1.8pp YoY to 48.0%, causing OPM to fall 0.9pp YoY to 7.3%. In
the Global WiFi business, overseas communication costs fell sharply due to pay-as-you-go contracts that accumulate charges
based on communication usage. The cost ratio increased in the Information and Communications Service business, where
the increase in mobile phone sales contributed to a higher sales ratio of products incurring purchasing costs. Despite lower
SG&A expenses on the review and reduction of various expenses, reduced sales resulted in the SG&A ratio moving higher.

Recurring profit and net income attributable to owners of the parent
Recurring profit was JPY314mn (-36.8% YoY). The company booked JPY16mn in forex gains (versus JPY7mn in Q1 FY12/20).
Net income attributable to owners of the parent was JPY232mn (+99.4% YoY).

Trends by segment
Global WiFi
Segment sales were JPY1.5bn (-54.7% YoY) and segment profit was JPY118mn (-63.9% YoY).
Q1 FY12/21 saw the highest quarterly sales since before the impact of the pandemic became apparent in Q2 FY12/20(Q1 sales were JPY1.5bn, versus a quarterly low of JPY1.3bn in Q3 FY12/20).
Conditions remain severe both overseas and in Japan due to the impact of the COVID-19 pandemic. On the other hand, thespread of COVID-19 has had a major impact on business activities and people’s lifestyles, and teleworking and online sales
have become more widespread among companies due to changes in work styles. In education, the Ministry of Education,
Culture, Sports, Science and Technology (MEXT) has fast-tracked the implementation of the GIGA School concept, anddemand for online education environments is increasing. In addition, demand for Global WiFi for Biz, a permanent internal
WiFi routers for corporate customers with a domestic use option was also strong as the company responded to various needs
such as moving, hospitalization, business trips, and other events.

Information and Communications Service
Segment sales (external sales) were JPY2.4bn (-6.2% YoY) and segment profit was JPY410mn (-20.7% YoY).
The combined total of sales generated by the company’s monthly subscription services and recurring sales revenue was
JPY230mn (9.8% of segment sales).
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 andprofitability 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 growthstage of its customers.
Amid an increase in the number of companies embracing telework, sales of mobile communications equipment have been
robust, as have sales of the VWS cloud-based monthly subscription work flow service and Vision Crafts!, a simple website
production service that allows users to reduce their initial costs. However, both sales and segment profit were down YoY due
to a decline in sales resulting from sales promotions focusing on monthly subscription services with an eye to increasing
future earnings, a decline in sales of new power brokerage services due to a temporary surge in electricity trading prices* 1,
and the fact that demand was relatively strong in Q1 FY12/20 because the COVID-19 pandemic was not yet a factor.
*1: The company sells electric power as an agent for electric power business (and has therefore not entered theelectricity retail business). Accordingly, it does not incur a corresponding procurement risk.

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The eco solutions business accounted for 7.5% of Q1 GPM in the Information and Communications Service segment (downfrom 10.1% in Q1 FY12/20). The decline in this ratio occurred primarily because commissions received declined to about
50% of previous levels due to rising electricity prices. Vision responded with efforts to recover this lost revenue, relocating
employees primarily into its mobile communications business. The mobile communications business accounted for 25.6% ofsegment GPM (up from 18.0% in Q1 FY12/20).
In Q1, the combined total of sales generated by the company’s monthly subscription services (JPY140mn) and recurring sales
revenue (JPY80mn) was JPY230mn (9.8% of segment sales). The company is endeavoring to strengthen its sales and services
to achieve a full-year combined total of JPY1.0bn in FY12/21 (versus JPY830mn in FY12/20).

Full-year FY12/20 results (out February 15, 2021)
SummaryIn FY12/20, the company reported sales of JPY16.7bn (-39.0% YoY), operating profit of JPY104mn (-96.9% YoY), recurring
profit of JPY228mn (-93.2% YoY), and a net loss attributable to owners of the parent: JPY1.2bn (net income of JPY2.2bn in
FY12/19).
Against its revised full-year FY12/20 forecast* (announced November 9, 2020), progress rates were 99.7% for sales, 179.1%
for operating profit, and 136.5% for recurring profit.
Sales down 39.0% YoY: Sales declined 59.0% YoY in the Global WiFi business. Due to the COVID-19 outbreak, there werebasically no outbound or inbound rentals from March 2020 onward, but the business moved back into the black on amonthly basis on aggressive efforts to capture domestic WiFi demand. Segment sales (external sales) in the Information andCommunications Service business decreased 1.8% YoY. Sales were favorable in cost-saving products and mobile
communications equipment, including equipment used for teleworking. However, sales declined YoY on a drop in thenumber of leasing contracts for office equipment as leasing volume declined eight months in a row (according to the Japan
Leasing Association).
Operating profit down 96.9%: The Global WiFi business posted a segment loss of JPY91mn (versus segment profit of
JPY3.3bn in FY12/19). Operating profit rose 11.5% YoY in the Information and Communications Service business. GPM
declined 4.6pp YoY to 52.8% while the SG&A ratio rose 6.9pp YoY to 52.2%, causing OPM to fall 11.6pp YoY to 0.6%. In the
Global WiFi business, overseas communication costs fell sharply due to pay-as-you-go contracts that accumulate charges
based on communication usage. The cost ratio increased in the Information and Communications Service business, where
the increase in mobile phone sales contributed to a higher sales ratio of products incurring purchasing costs. Despite lower
SG&A expenses on the review and reduction of various expenses, reduced sales resulted in the SG&A ratio moving higher.
However, the business returned to profitability in Q3, and posted operating profit in Q4 as well.
Recurring profit down 93.2% YoY: The company booked JPY124mn in subsidy income (versus JPY67mn in FY12/19).
Net loss attributable to owners of the parent of JPY1.2bn: In Q2, the company booked an impairment loss of JPY1.4bn on
rental assets and other assets related to the Global WiFi business. It also booked JPY357mn in loss on valuation of investment
securities in certain investee companies.
Revised FY12/20 full-year forecast (announced November 9, 2020)
Sales: JPY16.7bn (previous forecast was JPY16.7bn)
Operating profit: JPY58mn (operating loss of JPY320mn)
Recurring profit: JPY167mn (recurring loss of JPY213mn)
Net loss attributable to owners of the parent: JPY1.2bn (net loss of JPY1.6bn)
Reasons for the revision
Based on a comprehensive review of the impact of the COVID-19 pandemic on its business activities and performance in
Q3 FY12/20, the company now expects profits to exceed the previous forecast due to various cost efficiency efforts.
The revised forecast assumes that the sharp drop in international travelers (both outbound and inbound) will continueeven after end-FY12/20 despite the phased lifting of restrictions on business travel, but not tourism, and that there will
be no further emergency declarations or other social restrictions within Japan.

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43Impairment loss
In Q2, the company booked an extraordinary impairment loss of JPY1.4bn as it reduced the recoverable amount of assets(including goodwill) where it was unlikely to recoup its investment due to lower margins to their recoverable value on its
books. Segment impairment losses booked are as shown below.
Global WiFi: JPY1.2bn (WiFi routers, options, software, equipment)
Chauffeur-driven car sharing service included in Other segment: JPY186mn

Trends by segment
Global WiFi
FY12/20 segment sales were JPY7.3bn (-59.0% YoY) and segment loss was JPY91mn (segment profit of JPY3.3bn in FY12/19).
The global increase in COVID-19 infections resulted in many countries issuing moving restrictions such as stay-at-homedirectives and immigration restrictions. As a result, in FY12/20, the number of Japanese travelling abroad fell 84.2% YoY,
while the number of overseas visitors to Japan fell 87.1% YoY, according to the Japan National Tourism Organization (JNTO)
data. The company’s outbound and inbound WiFi rentals have remained at almost zero since March 2020.
On the other hand, the spread of COVID-19 has had a major impact on business activities and people’s lifestyles, andteleworking and online sales have become more widespread among companies due to changes in work styles. In education,
the Ministry of Education, Culture, Sports, Science and Technology (MEXT) has fast-tracked the implementation of the GIGA
School concept, and demand for online education environments is increasing.
In addition, demand for Global WiFi for Biz, a permanent internal WiFi routers for corporate customers with a domestic use
option was also strong as the company responded to various needs such as moving, hospitalization, business trips, and otherevents.
In anticipation of a prolonged fight against COVID-19, the company minimized segment losses through thoroughimplementation of low-cost operations. Specific measures included temporarily shrinking the outbound and inbound rentals
business, restraining communications costs through the use of pay-as-you-go contracts, reducing airport and logistics
outsourcing, and reassigning some employees to other businesses where demand was anticipated.

Information and Communications Service
Segment sales (external sales) were JPY8.8bn (-1.8% YoY) and segment profit was JPY1.5bn (+11.5% 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.
Amid an increase in the number of companies embracing telework, sales of mobile communications equipment have been
robust, as have orders for Vision Crafts!, a simple website production service that allows users to reduce their initial costs.
However, there was a drop in sales for office equipment as leasing volume declined eight months in a row from May 2020(according to the Japan Leasing Association).
In line with the change in work styles brought on by COVID-19, the company worked to reduce business opportunity losses
and cut operating costs by shifting to video conferencing instead of visiting clients and gradually incorporating teleworking
into its marketing activities and responses to web-based inquiries.
As a result, segment sales fell slightly while segment profit rose YoY.

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44

Cumulative Q3 FY12/20 results (out November 9,
2020)
Summary
In cumulative Q3 FY12/20, the company reported sales of JPY13.1bn (-36.2% YoY), operating profit of JPY58mn (-98.0% YoY),
recurring profit of JPY168mn (-94.4% YoY), and a net loss attributable to owners of the parent: JPY1.2bn (net income of
JPY2.0bn in cumulative Q3 FY12/19).
Against its revised full-year FY12/20 forecast* (announced November 9, 2020 with upward adjustments to profit
projections), progress rates in cumulative Q3 were 78.5% for sales (versus 75.2% of full-year FY12/19 results in cumulative
Q3 FY12/19), 100.3% for operating profit (89.3%), and 100.5% for recurring profit (89.7%).
After previously recording operating loss, the company reported operating profit of JPY73mn in Q3 (July–September2020). Improvement was significant in comparison to Q2 (April–June 2020), when the company incurred an operating
loss of JPY503mn. The company revised its FY12/20 profit projections upward as various measures and cost control
efforts proved successful.
The company does not expect to record operating profit in Q4 (October–December 2020) after subtracting cumulative
Q3 results from the full-year FY12/20 earnings forecasts. This view is based on a conservative outlook regarding
uncertainties caused by the COVID-19 pandemic and anticipated spending on new businesses and other investments in
the runup to FY12/21.
Sales down 36.2% YoY: Sales declined 55.5% YoY in the Global WiFi business. Due to the COVID-19 outbreak, as in Q2,
there were basically no outbound or inbound rentals in Q3 (July–September 2020), but the business nearly moved backinto the black on a monthly basis on aggressive efforts to capture domestic WiFi demand. Segment sales (external sales) in
the Information and Communications Service business decreased 2.6% YoY. Sales were favorable in cost-saving products andmobile communications equipment, including equipment used for teleworking, but declined YoY on a drop in the numberof leasing contracts for office equipment as leasing volume declined nine months in a row (according to the Japan Leasing
Association).
Operating profit down 98.0%: The Global WiFi business posted a segment loss of JPY48mn (versus segment profit of
JPY2.9bn in cumulative Q3 FY12/19). Operating profit rose 0.9% YoY in the Information and Communications Service
business. GPM declined 6.2pp YoY to 52.1% while the SG&A ratio rose 7.8pp YoY to 51.6%, causing OPM to fall 14.1pp YoY
to 0.4%. Despite lower SG&A expenses on the review and reduction of various expenses, reduced sales resulted in the
SG&A ratio moving higher. However, the business posted operating profit of JPY73mn in Q3 (July–September 2020),
putting it back in the black (the company reported profit on a monthly basis beginning in July 2020).
In the Global WiFi business, the company curtailed communication costs through pay-as-you-go contracts, and overseas
communication costs fell as a result (more details below).
The cost ratio also increased in the Information and Communications Service business, where the increase in mobile
phone sales contributed to a higher sales ratio of products incurring purchasing costs.
Recurring profit down 94.4% YoY: The company booked JPY106mn in subsidy income (versus JPY67mn in cumulative Q3
FY12/19). It booked JPY20mn in share buyback expenses in cumulative Q3 FY12/19 but just JPY1mn in cumulative Q3
FY12/20.
Net loss attributable to owners of the parent of JPY1.2bn: In Q2, the company booked an impairment loss of JPY1.4bn on
rental assets and other assets related to the Global WiFi business (detailed discussion follows). It also booked JPY188mn inloss on valuation of investment securities in certain investee companies.
COVID-19 impact and countermeasures: The decrease in overseas travelers contributed to a sharp decline in the number ofrentals in the Global WiFi business. While suffering from sluggish volume in the outbound and inbound rentals business,the company made efforts to minimize the impact by temporarily shrinking the business and reducing costs, including byrestraining communications costs through the use of pay-as-you-go contracts and reducing airport and logistics outsourcing.
The company has also relocated excess staff to areas expected to show favorable demand going forward. Sales in the
Information and Communications Service business were affected by a temporary halt to office equipment customer leasing
assessments.
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45

Revised FY12/20 full-year forecast (announced November 9, 2020)
Sales: JPY16.7bn (previous forecast was JPY16.7bn)
Operating profit: JPY58mn (operating loss of JPY320mn)
Recurring profit: JPY167mn (recurring loss of JPY213mn)
Net loss attributable to owners of the parent: JPY1.2bn (net loss of JPY1.6bn)
Reasons for the revision
Based on a comprehensive review of the impact of the COVID-19 pandemic on its business activities and performance in
Q3 FY12/20, the company now expects profits to exceed the previous forecast due to various cost efficiency efforts.
The revised forecast assumes that the sharp drop in international travelers (both outbound and inbound) will continueeven after end-FY12/20 despite the phased lifting of restrictions on business travel, but not tourism, and that there will
be no further emergency declarations or other social restrictions within Japan.

Impairment loss
In Q2, the company booked an extraordinary impairment loss of JPY1.4bn as it reduced the recoverable amount of assets(including goodwill) where it was unlikely to recoup its investment due to lower margins to their recoverable value on its
books. Segment impairment losses booked are as shown below.
Global WiFi: JPY1.2bn (WiFi routers, options, software, equipment)
Chauffeur-driven car sharing service included in Other segment: JPY186mn

Trends by segment
Global WiFi
Cumulative Q3 FY12/20 segment sales were JPY5.9bn (-55.5% YoY) and segment loss was JPY48mn (segment profit of
JPY2.9bn in cumulative Q3 FY12/19).
The increase in COVID-19 infections resulted in many countries, including Japan, issuing restrictions on overseas travel aswell as stay-at-home directives, which contributed to a global slump in travel-related demand. According to the Japan
National Tourism Organization (JNTO) data, the number of Japanese travelling abroad fell 79.6% YoY in cumulative Q3, while
the number of overseas visitors to Japan fell 83.7% YoY.
Amid such an environment, new applications dropped sharply from February 2020, majority of existing applications werecancelled, and overseas subsidiaries were forced to suspend operations by local governments, all of which contributed toboth sales and profit in the business declining. Due to the COVID-19 outbreak, as in Q2 (April–June 2020), there werebasically no outbound or inbound rentals in Q3 (July–September 2020).
The company made efforts to minimize the impact by temporarily shrinking the outbound and inbound rentals business andreducing costs, including by restraining communications costs through the use of pay-as-you-go contracts, reducing airportand logistics outsourcing, and reassigning some employees to other businesses where demand was anticipated.
The company reported JPY271mn in monthly overseas communication costs in February 2020, but this figure plummeted
to JPY2–3mn in July and August of the same year.
Depreciation costs began decreasing in Q3 due to the recording of impairment loss (JPY1.2bn reported in the Global
WiFi business) associated with rental assets and other fixed assets attributed to the business.
On the other hand, there are an increasing number of companies heeding government requests and introducing telework inorder to ensure the safety of their employees and prevent the further spread of COVID-19. At the same time, online learning
is taking hold with the progress of the government’s GIGA school program. This has contributed to an increase intelecommunications-related demand in Japan and a sharp expansion in sales in the domestic WiFi rental business, which
posted record cumulative Q3 sales.
Demand associated with remote work expanded in response to the state of emergency declaration issued by the Japanese
government in Q2. However, the state of emergency was lifted in Q3, and the company expressed concern that Wi-Fi

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46contract cancellations might increase as employees resumed commuting to work in higher numbers. Despite thisconcern, the company did not encounter as many cancellations as it had anticipated.
Rentals of the company’s Wi-Fi units are expanding in a varied range of municipalities (currently rented out at a rate ofseveral thousand units per municipality), including Osaka (3,300 units), and these units are being provided at a wider
range of clients, including companies and educational corporations. When the state of emergency was in effect, remote
work was being pushed primarily by large companies, but recently, an increasing number of small- to medium-sizedcompanies are implementing remote work. The company indicates that, as a result, results generated by its domestic WiFi rental business continue to rise on a net basis.
Due to these circumstances, operating loss reported in the Global WiFi business shrank from JPY347mn in Q2 (April–June2020) to JPY28mn in Q3 (July–September 2020) as results recovered to the point at which the business was just shy ofgenerating monthly operating profit.
Although outbound demand is gradually increasing as business and resident travel has resumed between some countries,
the company aims to remain flexible in its approach as it carefully watches market trends and the impact of the pandemic.

Information and Communications Service
Segment sales (external sales) were JPY6.7bn (-2.6% YoY) and segment profit was JPY1.2bn (+0.9% 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.
Vision makes cross-selling and upselling proposals suited to the growth stages and needs of its key target customers (startups
and venture firms). The company worked to offset business opportunity losses caused by stay-at-home requests by shifting tovideo conferencing instead of visiting clients and gradually incorporating teleworking into its marketing activities andresponses to web-based inquiries.
Amid an increase in the number of companies embracing telework, sales of mobile communications equipment have been
robust, as have orders for Vision Crafts!, a simple website production service that allows users to reduce their initial costs.
However, there was a drop in the number of leasing contracts for office equipment as leasing volume declined nine months
in a row (according to the Japan Leasing Association). As a result, segment sales were down 2.6% YoY. Nevertheless, segment
operating profit was up 0.9% YoY as the company reduced costs by moving equipment installation work and website
production in-house and curtailing non-urgent and unnecessary spending.
In addition to the website production service (HomePage.com) it offered previously, the company introduced Vision
Crafts!, a simplified website production service, in June 2020 for monthly fees starting at JPY3,980. The Vision Crafts!
subscription service offers lower introductory costs and is therefore gaining support from client startup companies.
Having produced websites at rate of 100 or more sites per month, Vision has accumulated a wealth of relevant expertise,
which it uses to meet the needs of its customers.

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47

Income statement
Income statement

FY12/13

FY12/14

FY12/15

FY12/16

FY12/17

FY12/18

FY12/19(JPYmn)

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

FY12/20
Cons.

Sales

9,204

10,185

12,485

14,844

17,55521,50427,31816,654

YoY

41.0%

10.7%

22.6%

18.9%

18.3%

22.5%

27.0%

-39.0%

Cost of sales

4,005

4,533

5,575

6,221

7,394

8,854

11,628

7,861

Gross profit

5,199

5,652

6,910

8,622

10,161

12,65015,690

8,794

-

8.7%

22.3%

24.8%

17.8%

24.5%

24.0%

-44.0%

56.5%

55.5%

55.3%

58.1%

57.9%

58.8%

57.4%

52.8%

YoY
Gross profit margin
SG&A expenses

5,189

5,366

6,105

7,332

8,372

10,166

12,365

8,690

SG&A ratio

56.4%

52.7%

48.9%

49.4%

47.7%

47.3%

45.3%

52.2%

10

286

805

1,290

1,789

2,484

3,325

104

-

-

181.2%

60.3%

38.6%

38.9%

33.8%

-96.9%

0.1%

2.8%

6.4%

8.7%

10.2%

11.6%

12.2%

0.6%

20

38

3

8

7

15

34

124

Operating profit
YoY
Operating profit margin
Non-operating income
Financial income

-6

-4

-0

7

1

2

16

8

Subsidy income

33

42

48

5

4

0

67

124

Other

-7

0

-45

-4

1

14

-49

-8

Recurring profit

30

324

808

1,298

1,795

2,500

3,359

228

-89.5%

987.9%

149.3%

60.8%

38.3%

39.3%

34.4%

-93.2%

Recurring profit margin

0.3%

3.2%

6.5%

8.7%

10.2%

11.6%

12.3%

1.4%

Extraordinary gains (losses)

194

70

120

-53

-41

-308

161

1,822

YoY

Income taxes
Implied tax rate
Net income attributable to non-controllinginterests
Net income attributable to parent company
shareholders
YoY
Net margin

148

119

343

432

546

667

973

-239

66.3%

30.1%

36.9%

34.7%

31.1%

30.4%

27.6%

-11.6%

-

-

-

-

-

-4

0

-1

75

275

585

814

1,209

1,529

2,226

-1,184-264.9%

112.6%

39.0%

48.5%

26.5%

45.6%

-153.2%

0.8%

2.7%

4.7%

5.5%

6.9%

7.1%

8.1%

-

Source: Shared Research based on company data
Note: Figures may not match company numbers due to differences in rounding methods.

Since the launch of the Global WiFi business in FY12/12, sales had been expanding steadily. Earnings dipped due tolaunching costs of the Global WiFi business, but after this segment became profitable in FY12/14, profits had been
expanding steadily up till FY12/19. Consolidated OPM rose from 0.1% in FY12/13 to 12.2% in FY12/19. The Global WiFi
earnings were hard hit in FY12/20 by the force majeure circumstances of the COVID-19 pandemic.
Subsidies booked as non-operating income mainly relate to subsidies from public authorities for the opening of the Vision
Future Business Center in Saga. However, the subsidies were finished in FY12/15. There have also been receipts frompublic authorities relating to language training for employees, but the amount is negligible and this item is likely to shrink
considerably from FY12/16. With the start of its day care facility for employees in FY12/19, the company received subsidies
totaling JPY67mn, topping JPY40mn for the first time in four years. In FY12/20, the company took in JPY124mn in subsidies,
primarily consisting of employment adjustment subsidies.

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48Balance sheet
Balance sheet

FY12/13

FY12/14

FY12/15

FY12/16

FY12/17

FY12/18

FY12/19

FY12/20

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cash and deposits

1,328

1,546

5,774

6,242

6,256

7,563

8,485

6,650

Accounts receivable

896

875

1,144

1,229

1,485

1,967

2,219

1,429

Inventories

80

73

59

83

64

78

140

130

Other

567

303

446

602

1,228

895

1,015

Allowance for doubtful accounts

-36

-19

-19

-26

-38

-47

-67

-62

Total current assets

2,835

2,777

7,404

8,130

8,995

10,455

11,792

8,872

Buildings (net)

42

67

63

71

214

259

337

231

Tools, furniture, and fixtures (net)

28

36

32

45

52

83

90

27

Rental assets (net)

0

126

186

325

543

650

651

37

Lease assets (net)

0

0

0

39

13

2

64

-

70

229

282

481

859

1,072

1,200

343

Software

187

206

327

423

591

162

Goodwill(JPYmn)AssetsTotal tangible fixed assets

725

563

488

132

80

-

-

-

113

178

35

Total intangible assets

319

286

327

423

591

677

667

197

Investment securities

124

206

103

518

616

566

428

303

Long-term loans receivable

20

20

48

-

-

-

28

25

Deferred tax assets

33

87

31

26

35

448

477

823

Other

302

360

355

372

410

570

616

799

Allowance for doubtful accounts

-21

-47

-22

-16

-22

-42

-35

-48

Investments and other assets

458

626

516

901

1,038

1,541

1,515

1,901

Total fixed assets

847

1,140

1,124

1,805

2,488

3,290

3,381

2,441

3,683

3,917

8,528

9,935

11,484

13,552

15,174

11,313

Accounts payable

420

478

554

608

805

877

1,203

717

Short-term debt

328

313

27

10

2

-

-

-

Lease obligations

-

-

-

27

20

2

40

16

Total assets
Liabilities

1,131

1,113

1,438

1,955

2,068

2,869

2,980

1,775

Total current liabilities

Other

1,879

1,904

2,019

2,600

2,895

3,749

4,222

2,508

Long-term debt

213

100

13

2

-

-

-

-

Lease obligations

-

-

-

21

2

-

38

31

Other
Total fixed liabilities
Total interest-bearing debt

12

14

-

-

-

0

8

5

225

113

13

23

2

0

46

36

541

413

40

60

25

2

78

46

2,104

2,017

2,032

2,623

2,897

3,749

4,268

2,544

Capital stock

300

300

2,337

2,337

2,347

2,360

2,364

2,364

Capital surplus

332

332

2,370

2,370

2,380

2,393

2,396

2,396

Retained earnings

882

1,157

1,765

2,579

3,788

5,317

7,543

6,359

-

-

-

-

-2

-311

-1,431-2,417

1,514

1,790

6,472

7,285

8,513

9,759

10,872

8,703

64

110

25

-

-

-8

-8

48

-

-

-

-

-

-

-

-

Total net assets

1,579

1,899

6,496

7,312

8,586

9,803

10,905

8,769

Working capital

555

470

649

704

745

1,167

1,156

842

Total liabilities
Net assets

Treasury stock
Total shareholders' equity
Valuation difference on securities
Non-controlling interests

Total interest-bearing debt

541

413

40

60

25

2

78

46

Net debt-787-1,133-5,734-6,182-6,231-7,561-8,407-6,604

Source Shared Research based on company data
Note: Figures may not match company numbers due to differences in rounding methods.

Assets
The company’s Information and Communications Service business is involved primarily in intermediary services andequipment purchase and sales, so tangible fixed assets form a small proportion of total assets. Rental assets booked astangible fixed assets are mobile WiFi routers for rent in the Global WiFi business. Previously, the entire amount was
expensed when mobile WiFi routers were rented out, but from FY12/13, in addition to being accounted for as rental assets
in tangible fixed assets, depreciation was changed to the straight-line method over two years. In FY12/15, current assets grew
rapidly year-over-year. This was due to an increase of JPY4.2bn in cash and deposits accompanying the issue of shares uponlisting on the stock market.
Since then, the company’s growing business led to further increases in current assets extending into FY12/19, driven for themost part by increase in cash and deposits and trade accounts receivable. In FY12/20, current assets decreased YoY on
declines in cash and deposits and trade accounts receivable as the Global WiFi business performed poorly due to the
COVID-19 pandemic.

Liabilities
Since the company began consolidated earnings reporting in FY12/13, cash and deposits have exceeded interest-bearing
liabilities (i.e., the company has been in a net cash position). Interest-bearing liabilities have consisted of lease liabilities only
since FY12/18. In FY12/15, there was a large increase in cash and deposits due to the issue of shares accompanying thestock market listing. Meanwhile, a decline in corporate bonds and long-term borrowings meant that the net cash position
grew by roughly 5x from the previous year to JPY5.7bn. In FY12/19, robust earnings contributed to net cash of JPY8.4bn. In

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FY12/20 as well, in spite of the YoY declines in sales and operating profit due to the COVID-19 crisis, the company
maintained ample net cash of JPY6.6bn.

Net assets
The share of valuation and translation adjustments in net assets is negligible, with shareholders’ equity the main component.
Shareholders’ equity has been rising due to accumulated retained earnings. The dramatic increase in net assets in FY12/15
was due to the issuance of new shares accompanying Vision’s stock market listing in December 2015. As a result of thisfundraising, capital and capital reserves rose by JPY2.0bn each as of end December 2015.
The funds raised were earmarked for investments related to the overseas expansion of the Global WiFi business,development expenses for databases and business systems, training of new recruits, debt repayments and working capital tosupport business expansion and to accelerate business growth. As of the end of FY12/19 net assets were up to JPY10.9bn,
thanks in large part to additions to internal reserves and the resulting increase in shareholders equity. Net assets as of endFY12/20 shrank to JPY8.8bn due to the recording of impairment losses and the repurchase of stock.

Cash flow statement
Cash flow statement

FY12/13

FY12/14

FY12/15

FY12/16

FY12/17

FY12/18

FY12/19

FY12/20

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cash flows from operating activities (1)

317

553

799

1,493

1,617

2,889

3,550

-396

Cash flows from investing activities (2)

83

-312

-629

-473

-1,416-1,458-1,436-375

Free cash flow (1+2)

400

241

170

1,020

201

1,431

2,114

-771

Cash flows from financing activities

26

-128

3,667

-38

-8

-312

-1,165-1,036

Depreciation and amortization (A)

107

137

179

318

479

850

1,089

532

Capital expenditures (B)

-100

-251

-408

-572

-1,253-863-1,323-390(JPYmn)Working capital changes (C)

555

-85

179

55

41

422

-10

-314

Simple FCF (NI + A - B - C)

-273

749

994

1,649

2,899

2,821

4,648

52

Source: Shared Research based on company data
Note: Figures may not match company numbers due to differences in rounding methods.

Cash flows from operating activities
The main components of operating cash flows are net income and depreciation. Operating cash flows had been on a rising
trend through FY12/19 due to growth in net income and increased depreciation expenses on growing tangible fixed assets.
In FY12/20, however, operating activities resulted in a net cash outflow of JPY396mn as the COVID-19 pandemic took a tollon the Global WiFi business.

Cash flows from investing activities
The main elements affecting investing cash flows are the purchase of tangible fixed assets and inflows to term deposits. In
FY12/14 and FY12/15, investing cash flows were negative (outflows) due to the acquisition of fixed assets in the Global WiFi
business and term deposits. In FY12/16, despite revenue (JPY486mn) from funds recouped from term deposits, investing
cash flows were negative due to cash outlays to acquire fixed assets and marketable securities. In three fiscal years from
FY12/17 to FY12/19, investing activities (including the acquisition of fixed assets, purchases of investment securities) resulted
in net outflows of more than JPY1.4bn.

Cash flows from financing activities
The key element in financing cash flows is increases and decreases in interest-bearing liabilities. In FY12/14, financing cash
flows were negative (outflows), primarily due to the repayment of long-term loans and redemption of corporate bonds. In
FY12/15, the company repaid long-term loans, but the issue of shares raised JPY4.1bn, so financing cash flows were positive(inflows). Note that as of the end of FY12/15, the shareholders’ equity ratio had risen to 76.2% (from 48.5% previous year)
due to fundraising. In FY12/16, though the shortfall was narrow due to the repayment of short and long-term loans (outflows),
it turned negative. In FY12/17, outflows widened modestly, reflecting the exercise of stock options and proceeds fromissuance of subscription rights to shares, alongside repayments of long-term loans, repayments of lease obligations, andlisting related costs. In FY12/19 and FY12/20, financing activities resulted in a net outflow of more than JPY1.0bn, most ofwhich went to share buybacks.

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Other information
History
June 1995

Current CEO Sano established Vision LLC, the backbone of the company

April 1996
December 2001

Vision Co., Ltd. founded to act as an agency for international telephone subscription
Established subsidiary Vision Business Solutions Inc. to sell office equipment

December 2003

Started Internet advertising business (Internet media business)

November 2004
February 2007

Vision Business Solutions Inc. merged with Vision Co., Ltd. and trade name changed to Vision Inc.
Started corporate cellphone business

January 2008

Established Members Net Inc., a subsidiary (now consolidated subsidiary)
Established Best Communications (now consolidated subsidiary Best Link Inc.)

July 2008

Started agency service for broadband subscription

January 2010
June 2011

Started “e-ca” mobile WiFi router rental service for inbound business travelers and tourists
Started “Vision WiMAX” high-capacity mobile WiFi router rental service for domestic business travelers and inbound tourists

July 2011
February 2012

Opened helpdesk/call center Saga Vision Future Business Center (VFBC) in Saga city, Saga
Started “GLOBAL WiFi®” mobile WiFi router rental service for overseas travelers

December 2012

Started “WIFI-HIRE” short-term rental service for inbound business travelers and tourists

October 2013
December 2013

Transferred consumer broadband business from Best Link
Started MVNO (mobile virtual network operator) business for inbound business travelers and tourists

March 2015

Started “NINJA WiFi®” rental service for inbound business travelers and tourists (merged with WI-FI HIRE)

December 2015
December 2016

Listed on Tokyo Stock Exchange Mothers Index
Moved to the First Section of the Tokyo Stock Exchange

February 2018
March 2018

Established subsidiary Alpha Techno Inc. in Shinjuku-ku, Tokyo
Established subsidiary BOS Inc. in Shinjuku-ku, Tokyo

May 2018

Established Vision Ad Inc. (joint venture with Wiz Co., Ltd.) in Shinjuku-ku, Tokyo

August 2019
March 2020

Made ProDrivers Inc. a subsidiary
Established subsidiary Vision Digital Marketing Inc. (currently a consolidated subsidiary)

Source: Shared Research based on company data

Major shareholders (as of December 31, 2020)
Top shareholders

Shares held

Shareholding ratio('000)
Kenichi Sano

12,37726.29%The Master Trust Bank of Japan, Ltd. (Trust account)

4,025

8.55%

Custody Bank of Japan, Ltd. (Trust account)

3,474

7.38%

Northern Trust Co. (AVFC) Re HROO (Standing proxy: The Hongkong and Shanghai Banking Corporation, Ltd. Tokyo Branch)

1,323

2.81%

Goldman Sachs International (Standing proxy: Goldman Sachs Securities Co., Ltd.)

1,252

2.66%

Government of Norway (Standing proxy: Citibank N.A. Tokyo Branch)

1,197

2.54%

State Street Bank and Trust Company 505001 (Standing proxy: Mizuho Bank, Ltd. Settlement Department)

1,155

2.45%

BNY GCM Client Account JPRD AC ISG (FE-AC) (Standing proxy: MUFG Bank, Ltd.)

1,052

2.23%

The Nomura Trust and Banking Co., Ltd. (Trust account)

1,050

CGML PB Client Account/Collateral (Standing proxy: Citibank N.A. Tokyo Branch)
SUM

2.23%

991

2.11%

27,89959.26%

Source: Shared Research based on Bloomberg and company data

Shareholder returns
The company is currently prioritizing strengthening its balance sheet and growing the business as it thinks that further
improvement of corporate value will generate the most returns for shareholders. As a result, it has not paid a dividend yet
but recognizes shareholder returns as a key management priority. The company intends to enact a stable and continuous
program of returning profits to shareholders while retaining enough internal reserves to strengthen its financial structureand grow the business, with due consideration to the operating environment. Per the company, the possibility of paying adividend and potential timing is still undetermined.

Corporate governance and top management
Top management
CEO Kenichi Sano (born in 1969) joined Hikari Tsushin (TSE1: 9435) in 1990 after graduating from Kagoshima Commercial
High School. He became a leading salesperson and after heading the key sales division founded Vision LLC as CEO in 1995.
The company was reorganized to its current status as Vision Co., Ltd. in 1996.

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Corporate governance system (as of March 31, 2021)
Organization and capital structure
Controlling interests

None

Parent company ticker
Directors-

Organizational typeCompany with Audit & Supervisory Board

Number of directors under Articles of Incorporation
Directors' terms under Articles of Incorporation

8
2 years

Number of directors
Number of independent outside directors

63

Voluntary committee equivalent to Nomination Committee or Compensation
Committee

None

Number of Audit & Supervisory Board members under Articles of Incorporation
Number of Audit & Supervisory Board members

44

Number of independent outside members of Audit & Supervisory Board

4

Independent officers (outside directors and Audit & Supervisory Board members)
Other

7

Participation in electronic voting platform
Disclosure of directors' compensation

No disclosure on individual remuneration

Disclosure of executive officers' compensation

None

Policy on compensation / method of calculating compensation
Corporate takeover defenses

In place
None

Source: Shared Research based on company data

Employees
Employees by segment(no. of employees)

FY12/12FY12/13

FY12/14

FY12/15

FY12/16

FY12/17

FY12/18

FY12/19

Par.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

229 (88)

325 (153)

356 (164)388 (149)

452 (139)

497 (136)

563 (145)

649 (146)

616 (120)

Global WiFi--

117 (72)

116 (72)

164 (74)

202 (73)220 (75)

237 (74)215 (52)

Information and Communications Service--

196 (74)

198 (73)

196 (62)202 (59)

231 (66)259 (68)281 (65)

Other

-

-

5 (-)

5 (-)

3 (-)

13 (1)

22 (1)

58 (-)

24 (-)

Company-wide--

62 (4)

69 (4)

89 (3)

80 (3)

90 (3)

95 (4)

96 (3)

Employee countFY12/20

Employees by segment

Source: Shared Research based on company data
Note: Numbers in brackets are average number of temporary employees.

Employees (unconsolidated, as of December 31, 2020)
Employee countAvg. age

535 (109)

Avg. years of service
33.0

Avg. annual salary (JPY'000)
6.3

4,896

Source: Shared Research based on company data
Note: Numbers in brackets are average number of temporary employees

By the way
The company name, VISION, was chosen for a sense of being future-oriented, and easy to remember. It also ties in with thecompany’s current corporate slogan: More vision, More success.

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News and topics
Revisions to 1H and full-year forecasts, and launch of glamping
business2021-05-13

Vision Inc. announced revised its 1H forecast, and withdrew its full-year forecast; see the results section for details.
On the same day, the company announced the launch of its new glamping business.
The company’s growth strategy centers on policies such as adapting to the “new normal” of the COVID-19 economy,
utilizing sales channels and business structures, leveraging customer bases, providing services that incorporate customer
feedback, and developing regional areas.
Vision has decided to launch its glamping business in 1H FY12/22 (tentative). The company believes it will be able togrow the business into a third earnings pillar based on a business model featuring the company’s strengths: namely, its
ability to utilize IoT to minimize contact during the “new normal” created by the pandemic (in acquiring customers,building a customer base, at airport counters, and in other applications), and its ability to realize low-cost operations.
These advantages will help the company achieve high customer satisfaction and efficient operations in the business.
New business: Operation of accommodation facilities featuring dome-shaped tents, wooden deck barbeque facilities, andopen-air baths.
The total planned expenditure for the launch of the business is approximately JPY1.2bn for the acquisition of land for the
project (including leasing) and the acquisition and installation of dome-shaped tents and other facilities. The company iscurrently considering locations across Japan for the installation of facilities (along with the number of facilities to beinstalled), and has yet to accurately determine the amount of expenditure that will be needed for the rollout ofnationwide operations.
Vision expects the business to have a negligible impact on FY12/21 results.

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Profile
Company Name

Head Office

VISION INC.

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

Phone
Listed On

03-5325-0344

Tokyo Stock Exchange First Section
EstablishedExchange Listing

2001-12-04

2015-12-21
Websitehttps://www.vision-net.co.jp/

Fiscal Year-End
Dec

IR Contact
IR Web-IR Phone
IR Email--

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54About Shared Research Inc.
We offer corporate clients comprehensive report coverage, a service that allows them to better inform investors and other stakeholders by
presenting a continuously updated third-party view of business fundamentals, independent of investment biases. Shared Research can be foundon the web at https://sharedresearch.jp.

Contact Details
Company namePhone

Shared Research Inc.

+81 (0)3 5834-8787

AddressEmail3-31-12 Sendagi Bunkyo-ku Tokyo, Japan

info@sharedresearch.jp

Websitehttps://sharedresearch.jp

Disclaimer
This document is provided for informational purposes only. No investment opinion or advice is provided, intended, or solicited. Shared
Research Inc. offers no warranty, either expressed or implied, regarding the veracity of data or interpretations of data included in this report.
We shall not be held responsible for any damage caused by the use of this report. The copyright of this report and the rights regarding thecreation and exploitation of the derivative work of this and other Shared Research Reports belong to Shared Research. This report may be
reproduced or modified for personal use; distribution, transfer, or other uses of this report are strictly prohibited and a violation of the copyrightof this report. Our officers and employees may currently, or in the future, have a position in securities of the companies mentioned in thisreport, which may affect this report’s objectivity.
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to the company are interpretations made by Shared Research. We represent that if this report is deemed to include an opinion from us that
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