Bridge Report (9416) August 20, 2019http://www.bridge-salon.jp/

Vision Inc. (9416)

President Kenichi Sano

Company Information
MarketIndustryCEO
HQ Address
Year-end
HP

TSE 1st Section
Information and telecommunications
Kenichi Sano
Shinjuku i-Land Tower, 6-5-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo
Decemberhttps://www.vision-net.co.jp/en/

Stock Information
Number of Shares Issued(Treasury stock excluded)¥4,860
16,234,152 shares
DPS (Est.)
Dividend Yield (Est.)
EPS (Est.)¥130.38

Share Price

Total Market Cap

ROE（Act）

Trading Unit

¥78,897 million
PER (Est.)
37.3x

16.7%
BPS (Actual)¥602.84

100 shares
PBR
8.8x

* Stock price as of the close on August 19, 2019. Number of shares issued at the end of the most recent quarter excluding treasury shares.

Consolidated Earnings Trends
Fiscal Year
Dec. 2015 (Actual)Dec. 2016 (Actual)Dec. 2017 (Actual)Dec. 2018 (Actual)Dec. 2019 (Forecast)

Net Sales
Operating Income Ordinary Income
12,485804
807
14,843
1,290
1,298
17,554
1,788
1,795
21,5032,484
2,499
25,7933,264
3,248

Net Income
585
812
1,208
1,529
2,116

EPS (¥)
48.95
50.12
74.30
94.02
130.38

DPS (¥)-* The forecasted values were provided by the company.
*Unit: ¥mn.

This Bridge Report outlines Vision's results for the second quarter of the fiscal year ending December 2019 and the forecast for the fiscal
year ending December 2019.

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Bridge Report (9416) August 20, 2019http://www.bridge-salon.jp/

Table of Contents
Key Points
1．Company Overview
2．Second Quarter of the Fiscal Year December 2019 Earnings Results
3．Fiscal Year December 2019 Earnings Estimates
4．Initiatives and Progress in the Fiscal Year Ending December 2019
5．Growth Strategy
6．Conclusions<Reference: Regarding corporate governance>

Key Points⚫

For the second quarter of the fiscal year ending Dec. 2019 (cumulative total), sales and operating income grew 31.3% and36.7%, respectively, year on year. The sales of the Global WiFi business grew 36.7% year on year with the increase in thenumber of rental transactions, and acquisition of new customers and boosting sales from existing customers led to a 17.8%
increase in sales of the Information and Communications Service business. The improvement in operational efficiency
through utilization of AI chatbots and RPA absorbed the increased cost rate resulting from additional costs from productmix of the Information and Communications Service business and personnel expenses for drivers for the company’s new
business ProDrivers., which raised the operating income rate by 0.6 points to 13.1%.

⚫

As for the forecast for the full fiscal year, which was revised upward based on the performance of the second quarter, sales
and operating income are estimated to augment 19.9% and 31.4%, respectively, year on year. However, the revised forecast
considered only the extra profit earned in the second quarter (cumulative total), and the company decided to leave theforecasts for the third and fourth quarters unchanged as they were in the beginning of the term, although there were no
special concerns for those two quarters. We would like to pay attention to how far the company can exceed the revised
forecast. Also, the company will split one share into three shares with the record date being September 30, 2019.

⚫

While the Global WiFi business continued to grow, the penetration ratio of the company’s Wi-Fi rental service were still
not more than 17.9% for outbound travelers and 2.9% for inbound travelers. However, the penetration ratio of mainly theoutbound travelers in the second quarter (cumulative total) rose, surpassing the previous trend, as a result of both offensive
and defensive initiatives, such as improving convenience through store digitalization, “Global WiFi for Biz” and “Unlimited
Plan Offer,” and cutting down on cost, which is the source of the company’s price competitive power. The penetration ratio
is expected to continue growing from the third quarter onward as well.

1. Company Overview
Under the management philosophy of “Contributing to the Information and Communications Revolution,” Vision conducts the Global
WiFi service, which leases the personal Wi-Fi (wireless LAN) routers which can be used in over 200 countries and regions on a flat-rate
packet basis, and as an information and telecommunications service distributor, it also provides information and telecommunications
services of arranging telecommunications infrastructure and office equipment necessary for business activities, such as fixed-line
telecommunications, mobile telecommunications, broadband etc.
The company forms a group with its 18 consolidated subsidiaries, both inside and outside Japan. Of those, the 6 based in Japan are
Members Net Inc. (which conducts the business of charging agency, fixed-line telephone service subscription agency, etc.) and Best
Link Inc. (which carries out the business of broadband service subscription agency), etc. There are 12 overseas subsidiaries that operate
as overseas hubs for the Global WiFi service in South Korea, Singapore, UK, Hong Kong, Hawaii, Taiwan, China (Shanghai), France,
Italy, California and New Caledonia; there is also a local subsidiary in Vietnam, which is an offshore hub for database construction andsystem development.
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Bridge Report (9416) August 20, 2019http://www.bridge-salon.jp/【Corporate slogan - More vision, More success】
The present era, where information and telecommunication technology is rapidly advancing, is full of business and communication
opportunities, and the company continues to be the No.1 distributer in many fields related to information and telecommunications
services. The company believes that it is because the company was able to “provide the best value by considering a customer’s
perspective.” The future of telecommunication will be for the betterment of everyone’s future. The company will support customers inrealizing many dreams by creating new services that customers can use with more peace of mind, convenience and efficiency.
【Vision Group’s management philosophy – Contributing to the Information and Communications Revolutions in the world】
This philosophy is put in with Vision’s determination to “actively promote the Information and Communications Revolution in the world,bring innovations to an individual’s lifestyle and the company’s business style, and contribute to the advancement of humanity andsociety by continuing to be an distributor that effectively and efficiently connects the client companies with end users and makes surethat its employee’s unlimited ambition, dreams and thoughts are contributing to the stakeholders, without compromising nor everforgetting the venture spirit.”
1-1 Business Description
Global WiFi business
The company offers services including “Global WiFi” (a Wi-Fi router rental service that allows people traveling overseas to use local
internet services at a competitive rate through its partnerships with the overseas operators) and “NINJA WiFi” (a Wi-Fi router rental
service for overseas visitors to Japan, etc.), while also engaging in services for the travelers between foreign countries in overseas bases(South Korea, Taiwan and California).

（From the reference material of the company）

Advantages① Affordable fixed-rate system, ② the most comprehensive area coverage, ③ comfort, ④ safety/security, and ⑤
substantial support bases and corporate sales capabilities ⇒ One of the largest customer bases in the industry
The advantages of “Global WiFi” and “NINJA WiFi” include the following: ① cost benefits of up to 89.9% (the rental fee per day is
300 yen at the minimum, depending on the travel destination) compared to the overseas fixed-rate packet plans offered by other Japanese
mobile carriers, ② the industry’s most comprehensive coverage of over 200 countries and regions, ③ high-speed telecommunications
services through partnerships with telecommunication operators all over the world, ④ available at 24 hours a day, 365 days a year, at
47 bases worldwide, and ⑤ the industry’s largest number of available spots at airport counters.
Furthermore, from the business perspective, another advantageous point is the fact that use by corporations, through which stable demandcan be expected, has accounted for about 30%~40% in this business segment. As a result, the company has secured a great number ofusers, which is one of the largest market shares in the industry.

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Bridge Report (9416) August 20, 2019http://www.bridge-salon.jp/

Earnings structure
Title

Overview

Sales①Rental fee per day × No. of days of using a router (average: ¥1,000/day for 7 days) + Optional services, such as the insurance
service and mobile batteries②Monthly fee + Charges for data telecommunications × No. of days of using a router

Cost of sales

・Data telecommunications fee (to carriers in each county)
・Price of terminals (expenses associated with mobile Wi-Fi routers are posted in rental assets and depreciation costs are recorded;
the depreciation period is 2 years)
・Outsourcing expenses (commission for distributors), etc.

SG&A expenses

・Personnel cost, advertising cost, operation costs/land and building rent of shipping centers/airport counters/customer centers, andother SG&A expenses

Information and Communications Service businessWith Best Link Inc., a consolidated subsidiary, at its core, the group offers services aimed mainly at newly established corporations,venture businesses and multi-store development enterprises such as food-service chains, from its 7 offices nationwide and in cooperation
with its partner companies. The services include subscription agency operations for various telecommunications services such as
business phones, agency operations of arranging lines for landline telephones, subscriber telephones, and NTT Hikari telephones,
corporate mobile phones, broadband lines, sales and maintenance of mobile telecommunication devices, OA equipment and security
products (UTM), etc., designing websites, and agency operations for new power services targeting enterprises.
The company has advantages in prospecting for corporations newly established (within 6 months), one of its major targets, and it isestimated, according to the data by the Ministry of Justice (the number of newly registered companies was 116,208 in Japan in 2018),
that the company has conducted transactions with one in every 7-8 corporations newly founded in Japan. These advantageous points arebacked by the company’s strong power to attract customers through its unique online marketing (Internet media strategy), through which
the company maximizes running yield (recurring revenue-type business) and conducts additional sales with high productivity (up/crossselling) through the Customer Relationship Management (CRM; customer relationship and ongoing transactions) strategy.
For example, the company receives commission from operators for telephone line arrangements unless contracts for the service arecancelled, and it can earn maintenance fees for multifunction photocopiers on a continuous basis. Moreover, the follow-up service by its
customer loyalty team has enabled the company to establish a recurring revenue-type business model, in which earnings are accumulated
by taking in demand for lines and equipment that increases with customers’ business growth, and providing optimal services according
to customers’ growth stage (additional sales with high productivity through up/cross selling). The company will evolve its recurring
revenue-type business model while shifting the target customer from enterprises with growth potential to ones in the growth stage.

2．Second quarter of the Fiscal Year December 2019 Earnings Results
2-1 Second quarter of Consolidated Business Results
FY 18/12 2Q

Ratio to Sales

FY 19/12 2Q

Ratio to Sales

YoY

Initial forecast

Compared with the forecast

Sales

9,855

100.0%

12,937100.0%+31.3%

11,614+11.4%

Gross profit

5,819

59.0%

7,496

57.9%

+28.8%--

SG&A expenses

4,583

46.5%

5,806

44.9%

+26.7%--

Operating income

1,236

12.5%

1,690

13.1%

+36.7%

1,437+17.6%

Ordinary income

1,245

12.6%

1,673

12.9%

+34.4%

1,439+16.3%Net income

809

8.2%

1,075

8.3%

+32.9%

962+11.7%*Unit: ¥mn

Sales and operating income increased 31.3% and 36.7%, respectively, year on year.
Sales grew 31.3% year on year to 12,937 million yen. The sales of the Global WiFi business rose 36.7% to 8,184 million yen as thenumber of rental transactions increased (960,000 → 1,390,000 transactions), and the sales of the Information and Communications
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Bridge Report (9416) August 20, 2019http://www.bridge-salon.jp/

Service business augmented to 4,509 million yen, up 17.8% year on year, due to acquisition of new customers and up-selling and crossselling strategies for existing customers.
Operating income rose 36.7% year on year to 1,690 million yen. Gross profit rate declined 1.1 points as the proportion of commodities
giving rise to supply costs such as compound machines grew in the Information and Communications Service business and personnel
expenses incurred for drivers for the company’s new service ProDrivers added up to costs (posted from the third quarter of the fiscal
year ended Dec. 2018), but SGA rate dropped 1.6 points due to increased efficiency in operation through utilization of AI chatbots and
RPA (ratio of personnel expenses to sales reduced 4.3 points) and operating income margin improved.
2-2 Trends by segment
Global WiFi
Information and Communications Service
OthersConsolidated Sales
Global WiFi
Information and Communications Service
OthersAdjustments
Consolidated Operating Income

FY 18/12 2Q Composition Ratio
5,987
60.8%
3,827
38.8%
40
0.4%
9,855
100.0%
1,149
19.2%
634
16.6%
-67
-480
1,236
12.5%

FY 19/12 2Q Composition Ratio
YOY
8,184
63.2% +36.7%
4,509
34.9% +17.8%
247
1.9% +509.3%
12,937100.0% +31.3%
1,596
19.5% +38.9%832
18.5% +31.2%
-157
-580
1,690
13.1% +36.7%*Unit: ¥mn

Global WiFi business
While the numbers of travelers from Japan to overseas and foreign visitors to Japan marked a record high, the penetration ratio for
outbound travelers (the proportion of travelers from Japan to overseas using the company’s Wi-Fi router) rose from 14.9% in the fiscal
year ended Dec. 2018 (full year) to 17.9%. The shipment quantity increased as the unlimited plan and the stationary plan for corporations“Global WiFi for Biz” were well received mainly by the corporate clients and the company met the increased demand during the Golden
Week by increasing the procurement of Wi-Fi routers, SIM cards, etc.
As for profit, the company’s continuous efforts to improve profitability, such as improving cost rate and operation, led to higher
profitability.
Information and Communications Service business
While increasing clients, including newly established corporations and venture firms steadily, the company increased sales from existingclients by continuing transactions through CRM (a recurring-revenue model) and implementing up-selling and cross-selling strategies.
Also, the sale of the in-house service (cloud-type workflow service) and acquisition of clients for consulting services that match thegrowth stage of each client company also started yielding good results.
2-3 Financial Condition and Cash Flow
Financial Condition
December 2018
Cash and deposits
7,563
Trade receivables
1,966
Current assets
10,262
Property, plant and equipment
3,289
Noncurrent assets
13,552June 2019
7,994
2,169
11,074
3,515
14,589Trade payables
Income taxes payable
Current liabilities
Noncurrent liabilities
Net assets

December 2018
877
598
3,748
0
9,803

June 2019
1,071
556
3,729
7
10,852*Unit: ¥mn

The company acquired its treasury shares from May 15, 2019 to June 11, 2019. It acquired 243,500 common shares for 1,120,100,000
yen. Capital-to-asset ratio was 74.2% (72.2% at the end of the previous term）.

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Cash Flow
Operating Cash Flow (A)Investing Cash Flow (B)Financing Cash Flow
Balance of cash and cash equivalents at end of period

FY 12/18 2Q
1,103
-902
-303
6,338

FY 12/19 2Q
1,444
-993
2
7,994

YOY
+340
+30.8%-91+305+1,656+26.1%*Unit: ¥mn

3．Fiscal Year December 2019 Earnings Estimates
3-1

Consolidated Earnings
FY 12/18 (actual) Ratio to sales FY 12/19 (forecast) Ratio to sales

Sales
Gross Profit
SG&A
Operating income
Ordinary income
Net income

21,503
12,65010,165
2,484
2,499
1,529

100.0%
58.8%
47.3%
11.6%
11.6%
7.1%

25,79315,094
11,830
3,264
3,248
2,116

100.0%
58.5%
45.9%
12.7%
12.6%
8.2%

YOY

Initial forecast+19.9%+19.3%+16.4%+31.4%+29.9%+38.4%

24,47014,64011,628
3,012
3,013
2,003

Compared withthe forecast
+5.4%
+3.1%
+1.7%
+8.4%
+7.8%
+5.6%

*Unit: ¥mn

Sales and operating income are projected to grow 19.9% and 31.4%, respectively, year on year. The forecast for the full fiscal year was
revised upward based on the results of the second quarter.
Trends by segment

Global WiFi
Information and Communications
Service
OthersAdjustments
Consolidated Sales
Global Wifi
Information and Communications
Service
OthersAdjustments
Consolidated Operating Income

FY 12/18 Composition(actual)Ratio
13,50562.8%

FY 12/19 Composition(forecast)Ratio
16,395
63.6%

YOY+21.4%

InitialCompared
forecast with the forecast
15,579
+5.2%

7,775

36.2%

8,587

33.3%

+10.4%

8,036

+6.9%

231
-8
21,5032,413

1.1%
100.0%
17.9%

814
-4
25,7932,916

3.2% +252.6%
100.0% +19.9%
17.8% +20.8%855
24,470
2,662

-4.8%
+5.4%
+9.5%

1,218

15.7%

1,543

18.0%

+26.6%

1,422

+8.5%

-194
-954
2,484

11.6%

-69
-1,126
3,264

12.7%

+31.4%

62-1,135
3,012

+8.4%

*Unit: ¥mn

4. Initiatives and Progress in the fiscal year ending December 2019
4-1 Global WiFi business
The company will work to provide “Global WiFi for Biz”, pursue corporate demand, and strengthen our relationships with corporate
customers. Moreover, while implementing the store digitalization strategy, the company will link this strategy with Cloud WiFi and thecustomer database to boost the "super last-minute online order receipt system,".
Cloud WiFi and Global WiFi for Biz (permanent in the office for 1,970 yen per month )6Bridge Report (9416) August 20, 2019http://www.bridge-salon.jp/

The term-end number of leased personal Wi-Fi(Wireless LAN) routers that are equipped with the next-generation telecommunication
technology (Cloud WiFi) and capable of managing Subscriber Identity Modules (SIMs) on cloud has surpassed 90% of all leased devices( Depending on telecommunication operators, some countries are not supported, thus the company has almost reached the upper limit).
Cloud WiFi is a differentiated service that utilizes users’ own SIMs, to allow them to use telecommunication lines with just 1 device allover the world without inserting or replacing SIMs. The security hurdle for making a seamless connection with carriers in many countries
and regions is high, however, the company is enabling usage in over 100 countries and regions.
On the other hand, merits to the company include reducing telecommunications cost (improving the efficiency of using
telecommunication lines), saving labor for shipping and operation (reducing SGA), and offering new services and methods (improving
profitability). We can enumerate some examples of the new services offered, such as offering the Global WiFi for Biz service (a standingtype service that doesn’t require renting every time, offers up to 3GB free of charge per month to use in domestic telecommunication,and ready for everyday use), which is expected to promote long-term continuous use by corporate users (improving convenience andsatisfaction levels), forging alliances with travel agencies and incorporate the service into overseas travel products, expanding the stockat the airport counters as well as the support area coverage (minimizing opportunity loss), and to provide services to travelers who areabout to depart (increasing the number of users).
Started a rental service of “GW01,” the first smartphone-type Wi-Fi router supporting cloud functions in the world on August 1.
In order to meet the customer’s demand for the improvement in the weight and thickness of the device, the company started renting “theGlobal WiFi” smartphone-type Wi-Fi router “GW01” with reduced thickness by 59% and the weight by 25%. A single routerautomatically connects to 108 or more areas, like the Cloud WiFi routers that the company has been providing so far. Moreover, it canbe used for maximum 12 consecutive hours and a user can check the usage status on a large display without worrying about the remaining
battery.
As content setting is possible for each type of business firm, the company will make efforts in providing OEM using the smartphonetype Wi-Fi router supporting Cloud function “GW01” to improve the convenience for a wider range of travelers to overseas.
Started providing an unlimited plan
In recent years, data communication capacity has been increasing with diversification of smartphone applications, sending and receptionof images and videos with large capacity, postings on social networking sites, etc., and a larger number of people are sharing the datawith friends, family members, etc. Therefore, there was a great demand for a plan allowing users to use the internet without worrying
about the data capacity. In order to meet such demands, the company started offering an unlimited plan. This service is available in 71
countries as of August 9, 2019.
The store digitalization strategy and the super last-minute online order receipt system
The company is proceeding with the strategy of making stores digitalized by ①, installing automatic delivery lockers (Smart Pickup),②, adopting self-registration KIOSK terminals with multilingual support and payment settlement functions (Smart Entry), and the ➂QR code-based reception counter that features immediate customer identification (Smart Check). The company aims to evolve its stores
to ones that can be used by Japanese tourists travelling abroad and foreign tourists visiting Japan, more conveniently, more comfortably,
and with greater peace of mind, as well as strengthen its efforts toward the increase in the number of routers on lease (number of routersdelivered) and increase of optional services (such as insurance services and accessories).
As of the end of the second quarter, the company has installed 20 automatic delivery lockers (Smart Pickup) at 6 major airports out of
its 17 airports in Japan (8 units as of the end of FY 12/17, 18 units as of the end of FY 12/18). In addition to strengthening the contact
point with users, optimizing the level of services according to user needs will be possible (reducing the waiting time for repeat users who
do not require explanations while making airport staff deal with users who need it). As it is difficult to expand and install more airport
counters, the company is planning to increase SmartPickup lockers, which will save labor, and improve throughput and reduce costs byeffectively utilizing the limited space.
In addition, collaboration between the store digitalization strategy, Cloud WiFi, and the customer database has established a “super lastminute online order receipt system,” enabling the company to provide services for customers who are about to depart, whom thecompany failed to secure before the system was established (the system has made it possible for the company to cope expeditiously with7

Bridge Report (9416) August 20, 2019http://www.bridge-salon.jp/

online application submitted right in front of airport counters by collaborating with the database).
Status of installation of the automatic receipt locker (Smart Pickup), 20 lockers already installed
Haneda Airport: 3 lockers, Narita Airport: 6 lockers, Chubu Centrair International Airport: 3 lockers (1 locker added), KansaiInternational Airport: 6 lockers, Itami Airport: 1 locker and Kitakyushu Airport: 1 locker (1 locker newly installed).
4-2 Information and Communications Service business
The company is strengthening the sales channels and putting efforts in the sale of in-house services. To strengthen the sales channels, thecompany is developing “Vision Business Market,” a website for supporting the business of startup, venture, small and medium
enterprises. The “Vision Business Market” provides useful information and introduces the company’s services and products of the partnercompanies for not only above-mentioned enterprises but also individuals in preparation of starting their own businesses.
On the other hand, the company will provide in-house services on the cloud utilizing the company’s operational know-how for existingcustomers (utilizing the customer base the company has cultivated so far). The company sells Cloud-based services that it has developed
internally using its know-how, and as the first step, it began to sell “VWS WEB CALL SYSTEM,” a total solution for telephone
appointment business support. The service is easy to be adopted even by small-scale business operators because it has a competitiveedge in terms of the functions of increasing the staff operation efficiency and grasping the business condition, and the burden of fixed
cost is insignificant. The service is subject to the “IT-introduction subsidies.” The company plans to provide services with growing
customer needs one after another.
4-3 Other (travel-related service platform)
By utilizing the customer base of a total of 3.6 million people who stayed for 25.22 million nights (outbound: about 2.82 million people
who stayed 19.76 million nights, inbound: about 780,000 people who stayed for 5.45 million nights; actual data in 2018, surveyed by
the company), the company provides services and information (media) that help solve problems during overseas travel; it launched the
new service "ProDrivers," transportation service that makes all kinds of business and daily transportation more convenient by offering
airport pickup, transportation for executives, etc.
The company launched the service in Tokyo; the ProDrivers service offers features such as that it can be used in units of 2 hours,
customers can move along with their baggage, and it can be used by up to 9 people (allowing customers to split the cost). The company
possesses 30 vehicles, and is increasing the number of drivers on a continuous basis. The company is not only targeting customers of the
Global WiFi business, but also the customers of the Information and Communications Service business, and, of course, they are putting
effort into gaining new customers. They plan to sequentially expand the service area to cover major cities nationwide while forming
partnerships. In overseas nations, the company will meet the needs by offering the pickup-reservation service, “SmartRyde” of DLGB
Inc. (Representative: Sota Kimura, Chuo-ku, Tokyo), one of the enterprises with which the company has established capital and businessalliances.

5. Growth strategy
In the Global WiFi business, the company will work toward expansion (exploring a new market: growth of each stage, global expansion),
extension (improving profitability) and utilization (business development: platform for travel-related services) of the customer andbusiness bases, and in the Information and Communications Service business, strengthen the channels, products/services and thebusiness model.

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Bridge Report (9416) August 20, 2019http://www.bridge-salon.jp/（From the reference material of the company）

5-1 Global WiFi business
Market scale
About 31.19 million foreign tourists visited Japan (inbound travelers) in 2018 (according to the Japan National Tourism Organization).
The company has estimated the scale of the personal Wi-Fi router rental market at approximately 218.3 billion yen, based on the averagecustomer unit price. As the Japanese government has cited “40 million tourists in 2020” and “60 million tourists in 2060” as a goal, themarket scale is expected to further increase. Meanwhile, the number of Japanese tourists traveling to overseas nations (outboundtravelers) is about 17 million per year, and the company estimated that the market scale is about 132.6 billion yen. The number of tourists
travelling from one overseas country to another has exceeded 1.3 billion (according to the reference material of the company; source:
officially published material by the United Nations World Tourism Organization), and the market scale estimated by the company is over
9 trillion yen.

（From the reference material of the company）

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Room for increasing its market share
The company is growing rapidly, but its market share is still 17.9% for overseas use (outbound: from Japan to overseas) and 2.9% for
domestic use (inbound: from overseas to Japan, including Japanese people). Accordingly, their share in the Japanese market (outboundand inbound travelers) is 8.2%, which indicates that there remains room for increasing the market share. The company will endeavor tofurther increase the percentage by not only prospecting for new users, but also offering services to repeat users and taking in corporate
demand. Furthermore, it will strengthen the business foundation through cost reduction and productivity improvement in an attempt toboost profitability.
In the medium and long term, the company plans to develop a new business, “a travel-related service platform,” using the customer
bases of “Global WiFi” and “NINJA WiFi.”（From the reference material of the company）

Comparison of means of connecting to the Internet at overseas destinations (1)（From the reference material of the company）

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Means of connecting to the Internet at overseas destinations (2)（From the reference material of the company）

5-2 Information and Communications Service business
The company attracts customers through its unique online marketing (Internet media strategy), through which the company maximizes
running yield (recurring revenue-type business) and conducts additional sales with high productivity (up/cross selling) through its uniqueknow-how, the Customer Relationship Management (CRM; customer relationship and ongoing transactions) strategy.
The company has advantages in prospecting for corporations newly established (within 6 months), one of its major targets, and it isconstantly increasing client corporations by 8,000-9,000 every term. According to the data by the Ministry of Justice, the number of
newly registered companies was 116,208 in Japan in 2018, meaning that the company has conducted transactions with one in every 7-8
corporations newly founded in Japan. Also, the company is taking in demand for change procedures at the time of adding commodities
and transferring office, replacement of equipment, etc., through the recurring revenue-type business (the number of registered head andbranch offices for transfer is approx. 140,000 through the years, even after excluding the offices not requiring registration for transfer).
Number of incorporation registrations (total)

Number of registrations of transfer of head office andbranch (total)（From the reference material of the company）

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For example, the company continuously receives commission from operators for telephone line arrangements unless contracts for theservice are cancelled, and it can earn maintenance fees for multifunction photocopiers on a continuous basis. Moreover, the follow-up
service by its Customer Loyalty Team has enabled the company to establish a recurring revenue-type business model, in which earnings
are accumulated by taking in demand for lines and equipment that increases with customers’ business growth, and providing optimal
services according to customers’ growth stage (additional sales with high productivity through up/cross selling). The company will
evolve its recurring revenue-type business model while shifting the target customer from enterprises with growth potential to ones in thegrowth stage.
Stock-type Business Model（From the reference material of the company）

5-3 Sustainable growth and improving corporate value – Initiatives for ESG－
For the environment, the company takes measures for global warming, promotes eco-friendliness and recycling, and also provides
support for affected areas. Also, the company aims to contribute to society through recruitment/employment (diverse employment
channels, efforts for having advantages in recruitment) and the Work Style Reform (personnel system conforming to prevailing time andenvironment and unique benefits). As for corporate governance, the company is taking efforts in strengthening the governance andpromoting risk management and thorough compliance.
Environment

Society・Acquire “Green Site License” that offsets carbon emissions via websites
・Support for “Shinsai Regain” (a specified NPO)・Efforts in encouraging paper-free work (2018: fees for copying and papers were cut down 9.6% year
on year)・Cheap rental of LED lighting
・Utilize diverse employment channels
Fair employment, employee referral, active hiring of female employees, international employees,
and disabled employees
・Introduce a personnel system conforming to prevailing time and environment & unique company
benefit systems
Reduced working hours, shift-work system, flex-time system, half-holiday, hourly paid leave (paidleave), leave on spouse’s birthday (special leave) and allowance for hydration (summer time, subsidy
for influenza vaccination)
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Corporate governancehttp://www.bridge-salon.jp/

・Continuous increment in the average annual salary
Improvement in efficiency of work through an AI chatbot and RPA ⇒ increased productivity,
shift to work of a high added value, provision of commission, incentive and performance-based bonus,
increment in the average annual salary
・Open ”Vision Kids Nursery,” a company-led nursery school・Strengthen information security
Acquire the ISMS international standard “ISO/IEC 27001,” establish and run an information
security committee
・Compliance, risk management and internal control activity
Conduct training programs periodically

6．Conclusions
While the Information and Communications Service business continues to see a stable growth, the Global WiFi business is growing
rapidly. Increased sales and profit are anticipated for the fiscal year ending Dec. 2019 for six consecutive years, where sales are expected
to be 25.7 billion yen, which is 2.5 times more than the term five years prior (fiscal year ended Dec. 2014) when sales and profit started
continuous growth, and operating income is estimated to be 3.2 billion yen, which is 11.4 times more. However, the penetration ratio of
the company’s Wi-Fi rental service were still not more than 17.9% for outbound travelers and 2.9% for inbound travelers, indicating that
there is a room for improvement. As a matter of fact, the penetration ratio of mainly the outbound travelers in the second quarter(cumulative total) rose, surpassing the previous trend, as a result of both offensive and defensive initiatives, such as improving
convenience through store digitalization, “Global WiFi for Biz” and “Unlimited Plan Offer,” and improving business efficiency andcutting down on cost, which are the source of the company’s price competitiveness.
While the company might seem to be overly concerned about competition, it is leading in non-price competition in addition to pricecompetition, as it has a greater number of countries/areas available for use, where customers cannot only connect but also use the internet
at a high speed. In overseas, especially, “the most important thing is ‘to be able to connect’” (President Sano). The matter of interest foroverseas carriers is also to win the competition in the domestic market. Therefore, they consider Vision as a perfect partner as it resells
its own lines instead of roaming. From a medium-to-long-term perspective, a favorable relationship with overseas carriers may help in
expanding the overseas business (from oversea to overseas) with great potential.

<Reference: Regarding corporate governance>◎ Organization type, and the composition of directors and auditors
Organization type
Directors
AuditorsCompany with an audit and supervisory board
6 directors, including 3 outside one
4 auditors, including 4 outside ones

◎ Corporate Governance Report ： Updated on March 26, 2019
Basic policy
Our corporate group improves ourselves to change clients’ expectations into impression, pursues innovation without hesitation to actualize theideal, always feels grateful about the support of many people (stakeholders), and operates its business activities with a humble mindset. Under
this code of conduct, Vision observes laws, in-company regulations, and policies, carries out business in good faith, and strives to realize optimal
corporate governance.

<Main Reasons for Non-compliance with the Principles of the Corporate Governance Code (Excerpts) >【Principle 4-1-3 Roles and responsibilities of the board of directors (1) (To oversee the planning by a successor to the chief executive officer
and others)】
Under a business environment that will change from time to time, our company will have thorough discussion before appointing top executives.

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For instance, in our company the board of directors will designate top executives from candidates who are considered appropriate for the positionin terms of their personality, knowledge, business performance, and other factors, in accordance with our management philosophy and businessstrategies. We will hold discussion on supervision of succession planning.
【Supplementary Principle 4-10-1 Involvement and advice from independent directors on the matters of nomination and remuneration by
establishing a voluntary independent advisory committee.】
Regarding the nomination and appointment of candidates for directors and corporate auditors, we comprehensively take into account theknowledge, experience, capabilities, etc. and decide upon deliberation at the Board of Directors. Remuneration is determined in accordancewith the Board of Directors Regulations established by the Board of Directors including external directors within the framework of the total
remuneration resolved at a shareholders’ meeting. Based on these facts, we believe there is no need to establish a voluntary advisory committee
and the current system is functioning properly.

<Disclosure Based on the Principles of the Corporate Governance Code (Excerpts)>【Principle 1-4 So-called strategically held shares】
The basic policy of Vision is not to hold the shares of other companies strategically, unless it is considered beneficial for improving corporate
value in the medium to long term. If we hold listed shares for cross-shareholding, we will examine all the shares individually at the Board of
Directors every quarter. As for the shares of companies that are no longer expected to contribute to the improvement of our corporate value overthe medium to long term, we will sell the shares taking into consideration stock prices and market trends. Regarding the exercise of voting rights,
we have a policy to decide whether or not to approve for each case, and the decision is made based on its potential contribution to theimprovement of our corporate value over the medium to long term.
Regarding disclosure of the verification results of purposes of cross-shareholding, we do not disclose them because they are linked with ourbusiness strategies and benefits of the company and shareholders may be damaged by the disclosure.
【Principle 5-1 Policy for constructive dialogue with shareholders】
If shareholders or others want to have a dialogue with Vision, the company will respond positively within a reasonable range, to contribute to
the sustainable growth of the company and the medium to long-term improvement in corporate value. As of now, Vision holds a briefing session
attended by the president or a director in charge of IR two or more times per year, meetings with institutional investors, briefing sessions forindividual investors several times a year, and so on. The information on their results is properly shared through meetings of the board of directors,
etc. In addition, Vision takes thoroughgoing measures for preventing the leakage of insider information.

This report is intended solely for information purposes, and is not intended as a solicitation for investment. The information and opinions contained within
this report are made by our company based on data made publicly available, and the information within this report comes from sources that we judge to bereliable. However, we cannot wholly guarantee the accuracy or completeness of the data. This report is not a guarantee of the accuracy, completeness orvalidity of said information and opinions, nor do we bear any responsibility for the same. All rights pertaining to this report belong to Investment Bridge Co.,
Ltd., which may change the contents thereof at any time without prior notice. All investment decisions are the responsibility of the individual and should bemade only after proper consideration.
Copyright(C) 2019 Investment Bridge Co.,Ltd. All Rights Reserved.

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URL: www.bridge-salon.jp/

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