Bridge Report (9416) August 28, 2020

https://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/ir_information.html

Stock Information
Number of Shares Issued(Treasury stock excluded)¥801
47,079,756 shares
DPS (Est.)
Dividend Yield (Est.)
EPS (Est.)-

Share Price

Total Market Cap

ROE（Act）

Trading Unit

¥37,710 million
PER (Est.)-

21.5%
BPS (Actual)¥226.80

100 shares
PBR
3.5x

* Stock price as of the close on August 27, 2020. Number of shares issued at the end of the most recent quarter excluding treasury shares. ROE and BPS are theactual value as of the end of the previous year.

Consolidated Earnings Trends
Fiscal Year
Dec. 2016 (Actual)Dec. 2017 (Actual)Dec. 2018 (Actual)Dec. 2019 (Actual)Dec. 2020 (Forecast)

Net Sales
Operating Income Ordinary Income
14,843
1,290
1,298
17,554
1,788
1,795
21,5032,484
2,499
27,3183,325
3,358
16,700-320-213

Net Income
812
1,208
1,529
2,226
-1,601

EPS (¥)
16.70
24.76
31.40
46.05
-

DPS (¥)-* The forecasted values were provided by the company. Unit: Million yen or yen. In October 2019, we split one share into three shares (EPS retroactively
adjusted).

This Bridge Report outlines Vision Inc.'s results for the first half of the fiscal year ending December 2020 and the forecast for the fiscal
year ending December 2020.

1

Bridge Report (9416) August 28, 2020

https://www.bridge-salon.jp/

Table of Contents
Key Points
1．Company Overview
2．First half of Fiscal Year December 2020 Earnings Results
3．Fiscal Year December 2020 Earnings Estimates
4. Growth strategy considering the post-pandemic world where people will lead their daily lives while coping with the novel coronavirus
5．Conclusions<For reference: Initiatives for ESG・SDGs><Reference: Regarding corporate governance>

Key Points⚫

For the first half of the fiscal year ending Dec. 2020, sales decreased 25.6% year on year, and an operating loss of 15 million
yen was posted (an operating income of 1.69 billion yen in the same period last year). While the Information andCommunication Service business absorbed the impact of COVID-19 and secured the same level of sales as the same period
last year, sales of the Global WiFi business decreased 43.4% year on year as there were almost no rental transactions withforeign visitors to Japan (inbound travelers) and Japanese travelers overseas (outbound travelers) in the second quarter(April to June). Despite a 35.7% year-on-year decline in gross profit, mainly in the Global WiFi business, the company wasable to substantially reduce SG&A expenses in a short period of time, and nearly balanced its operating income and loss.

⚫

For the full fiscal year, the company expects sales to decline 38.9% year on year and an operating loss of 320 million yen.
While assuming that there will be no social restrictions, such as a renewed declaration of a state of emergency, in the second
half of the fiscal year, the company does not anticipate renting to foreign travelers (outbound and inbound) (there is a small
amount of use by long-term overseas visitors). However, the company expects gross profit margin to improve after
bottoming out in the second quarter (April to June) due to progress in cost reduction, and the operating loss in the second
half is projected to be lower than the operating loss in the second quarter (April to June).

⚫

The results of the first half were significantly affected by the coronavirus crisis, but the company was able to reduce costs
substantially in a short period of time with its excellent adaptability. In the second half of the fiscal year, the Global WiFi
business has begun to break even on domestic WiFi alone while maintaining the same structure as when demand wasrecovering. In addition, the Information and Communication Service business, which has steadily been building up its
stock, has been one of the company’s strengths, demonstrating the diversity and stability of its earnings. The government
began negotiations on easing immigration in June and expanded the number of countries covered in July. While thecompany plans to operate under conservative assumptions, the business environment has been slowly improving. As thecompany is increasingly cutting down on its costs, profit will surge if revenue increases. We are looking forward toopportunities after the crisis.

1. Company Overview
Under the management philosophy of “Contributing to the Information and Communications Revolution,” Vision conducts the Global
WiFi business, which leases the personal Wi-Fi (wireless LAN) routers which can be used in over 200 countries and regions on a flatrate basis, and as an Information and Communications Service distributor, it also provides Information and Communications Service
business 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 19 consolidated subsidiaries, both inside and outside Japan. Of those, the 7 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 operate2Bridge Report (9416) August 28, 2020

https://www.bridge-salon.jp/

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.
【Vision Group’s management philosophy – Contributing to the Information and Communications Revolutions in the world】
We will actively promote the Information and Communications Revolution in the world, bring innovations to an individual’s lifestyleand the company’s business style, and contribute to the advancement of humanity and society by continuing to be an distributor that
effectively and efficiently connects the client companies with end users and makes sure that its employee’s unlimited ambition, dreams
and thoughts are contributing to the stakeholders, without compromising nor ever forgetting the venture spirit and add to the progress ofthe human race and the society.
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).
The term-end number of leased Wi-Fi routers that are equipped with the next-generation telecommunication technology (Cloud WiFi)
capable of managing Subscriber Identity Modules (SIMs) on the cloud accounts for over 90% of all leased devices (Depending on
telecommunication carriers, some countries are not supported, thus the company has almost reached the upper limit).

（From the reference material of the company）

Advantages(1) 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.
The store digitalization strategy and establishment of 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 (3) the
QR code-based reception counter that features immediate customer identification (Smart Check), while expanding the number ofmanned counters in Japan. The company aims to evolve its stores to ones that can be used by Japanese tourists travelling abroad and3

Bridge Report (9416) August 28, 2020

https://www.bridge-salon.jp/

foreign tourists visiting Japan, more conveniently, more comfortably, and with greater peace of mind, as well as strengthen its efforts
toward the increase of routers on lease (number of routers delivered) and increase of optional services (such as insurance services andaccessories).

（From the reference material of the company）

In addition to strengthening the contact point with users, the store digitalization will make it possible to optimize the level of services
according to user needs (reducing the waiting time for repeat users who do not require explanations while making airport staff deal withusers who need it). As it is difficult to expand and install more airport counters, the company is planning to increase Smart Pickup lockers,
which will save labor, and improve throughput and reduce costs by utilizing the limited space effectively.
Furthermore, the combination of 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 (the system has
made it possible for the company to cope expeditiously with online application submitted right in front of airport counters by linking itwith the database).

同社WiFiレンタルサービス利用浸透率（日本）
20.0%
18.0%
16.0%
14.0%

12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
12/12期

13/12期

14/12期

15/12期

海外利用シェア（アウトバウンド）

16/12期

17/12期

18/12期

19/12期日本市場内シェア（アウト＋イン）

国内利用シェア（インバウンド、日本人含む）

4

Bridge Report (9416) August 28, 2020

https://www.bridge-salon.jp/

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 15 offices nationwide and incooperation 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 118,532 in Japan in 2019),
that the company has conducted transactions with around one in every 10 corporations newly founded in Japan. These advantageous
points are backed 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 highproductivity (up/cross selling) 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 expanding the target customer from enterprises with growth potential to ones in the growth stage.

2．First half of Fiscal Year December 2020 Earnings Results
2-1 Consolidated Business Results
1H of FY 12/19
Sales
12,937Gross profit
7,496
SG&A expenses
5,806
Operating income
1,690
Ordinary income
1,673
Net income
1,075

Ratio to Sales
100.0%
57.9%
44.9%
13.1%
12.9%
8.3%

1H of FY 12/20
9,630
4,822
4,837
-15
66
-1,352

Ratio to Sales
100.0%
50.1%
50.2%
0.7%
-

YoY
-25.6%-35.7%-16.7%-96.0%-*Unit: ¥mn

Sales dropped 25.6% year on year, and operating loss was 15 million yen (an operating income of 1.69 billion yen in the same
period last year).
Sales were 9.63 billion yen, down 25.6% year on year. The sales of the Information and Communication Service business rose 0.2%
year on year, but the sales of the Global WiFi business dropped 43.4% year on year as there were almost no rental transactions withforeign visitors to Japan (inbound travelers) and Japanese travelers overseas (outbound travelers) in the second quarter (April to June)
due to the impact of COVID-19.
In the Information and Communication Service business, lease inspections of OA equipment sales were temporarily suspended (leading
to a delay in recording sales, etc.) due to the suspension of screening operations caused by the requests for voluntary restraint, but thiswas offset by sales of cost-saving products and mobile communications devices (such as devices for teleworking). In the Global WiFi
business, on the other hand, domestic Wi-Fi enhancements were successful in capturing demands associated with telework and online
classes, but were unable to offset the decline in outbound and inbound demands.
Operating loss was 15 million yen. Despite the decline in sales, gross profit fell 35.7% to 4.82 billion yen due to the higher cost of sales
ratio in both businesses, however, the company was able to significantly reduce SG&A expenses in a short period of time by reviewing
5

Bridge Report (9416) August 28, 2020

https://www.bridge-salon.jp/

and reducing various expenses such as advertising costs including listing expenses, performance-linked bonus allowances, packing andfreight expenses, travel and transportation expenses, and consumables expenses, which offset the decline in gross profit.
While the company secured an ordinary income of 66 million yen through improvements in non-operating income/loss from subsidies,it posted an extraordinary loss of 1.59 billion yen due to asset write-offs from the coronavirus crisis in the Global WiFi business, resulting
in a net loss of 1.35 billion yen.
In the Global WiFi business, assuming overseas travel (outbound and inbound) will not recover even after the end of the current term,
the company reduced the book value of assets (Wi-Fi routers, options, software, equipment, fixtures, etc.) that have become unprofitable
and are unlikely to recoup their investments, and recorded an impairment loss of approx. 1.2 billion yen (an impairment loss of 1.39
billion yen on a consolidated basis) as an extraordinary loss. As a result, the company expects to reduce depreciation costs by 370 million
yen in the second half and 410 million in the next fiscal year.
Sales and profit by segment

Global WiFi
Information and Communications Service

1H of FY
12/19
8,184
4,509

Composition
Ratio
63.3%
34.9%

1H of FY
12/20
4,634
4,520

Composition
Ratio
48.1%
46.9%

247

1.9%

478

5.0%

-4
12,937
1,596
832
-157
-580

100.0%
19.5%
18.5%
-

-2
9,630
-20
817
-306
-504

100.0%
18.1%--43.4%
+0.2%
+93.2
%
-25.6%
-1.8%
-

1,690

13.1%

-15

-

-

12/20-1Q
5,989
3,252
2,764
488
496
116
54.3%
46.2%

2Q
3,641
1,569
2,072
-503
-429
-1,46843.1%
56.9%

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

YOY*Unit: ¥mn

Quarterly business results
12/18-1Q
Sales
4,922
Gross profit
2,930
SG&A expenses
2,194
Operating income
736
Ordinary income
745
Net income
514
Gross Profit Margin
59.5%
SG&A ratio
44.6%

2Q
4,933
2,888
2,388
499
499
295
58.6%
48.4%

3Q
5,961
3,579
2,679
900
900
623
60.0%
44.9%

4Q
5,686
3,251
2,903
348
353
96
57.2%
51.1%

12/19-1Q
6,470
3,797
2,817
980
980
669
58.7%
43.6%

2Q
6,467
3,698
2,988
710
692
406
57.2%
46.2%

3Q
7,610
4,474
3,194
1,280
1,338
911
58.8%
42.0%

4Q
6,770
3,719
3,364
354
346
239
54.9%
49.7%

*Unit: ¥mn

In the second quarter (April to June), there were almost no rental transactions with inbound and outbound travelers in the Global WiFi
business, while in the Information and Communication Service business, lease inspections of OA equipment sales were temporarilysuspended due to the suspension of screening operations caused by the requests for voluntary restraint, resulting in a delay in recording
sales. For this reason, sales declined significantly in comparison to the same period last year and the previous quarter. The company
reviewed and reduced various expenses and cut down on SG&A expenses by 25.0% on a consolidated basis compared to the first quarter,but gross profit margin declined, resulting in an operating loss of 500 million yen.
In the Global WiFi business, the cost of sales ratio rose in line with lower sales, and in the Information and Communication Service
6

Bridge Report (9416) August 28, 2020

https://www.bridge-salon.jp/

business too, the cost of sales ratio rose as the sales of mobile communication devices (mobile phones) increased (due to a higher
proportion of products that generate procurement costs).

2-2 Trends by segment

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

12/181Q
3,089

2Q

3Q

4Q
3,589

12/191Q
4,075

4,109 5,084

12/201Q
4,462 3,347

2,898

3,929

1,286

1,818

2,009

1,977

1,970

2,302

2,207 2,330

2,115

2,515

2,004

14
4,922
701

26
4,933
448

58
5,965
769

131
5,691
495

92
6,470
871

155
195
6,471 7,611
724 1,274

193
6,772
430

126
5,989
326

351
3,641
-347

296

337

371

212

482

350

342

188

517

299

-28
-232

-38
-247

-29
-211

-97
-262

-86
-286

-70
-293

-61
-275

-47
-217

-91
-264

-214
-240

736

499

900

348

980

710 1,280

354

488

-503

2Q

3Q

4Q

2Q

*Unit: ¥mn

Global WiFi businessIn the second quarter (April to June), the company enhanced its domestic Wi-Fi business, and successfully tapped into the demand fortelework and online classes by leveraging its wide range of high-quality products and product inventory, which led to increase orders
from companies, government agencies, and universities. As a result, the company posted sales of 1.28 billion yen from domestic Wi-Fi
business alone.
The company also succeeded in cutting costs significantly. Specifically, the company reduced operating expenses from 3.02 billion yen
in the first quarter to 1.63 billion yen through the reduction of personnel costs (including job rotation), rent, promotional expenses,
advertising expenses, store closures, and suspension of operation of some stores.
Information and Communication Service businessAlthough sales and profit decreased in the second quarter from the first quarter due to the suspension of lease inspections of OA
equipment sales and a decline in OA equipment sales due to telecommuting, the sales of cost-cutting products such as VWS (Vision
Web Service) and mobile communication devices (such as devices for telework) were steady as a result of marketing efforts aimed at
capturing the needs of corporations for cost reduction and telework amid the coronavirus crisis.
VWS is a service based on the SaaS model in which services developed and used by the company are deployed to users. The company
offers services such as time and attendance management and workflow, and is expanding its lineup. Since it is a cloud-based system, theburden of introducing the system is low for users, and running costs can be kept down as necessary functions can be used as needed. On
the other hand, it will lead to increase recurring revenue for the company.

7

Bridge Report (9416) August 28, 2020

https://www.bridge-salon.jp/

2-3 Financial Condition
December 2019
Cash and deposits
8,485
Trade receivables
2,218
Current assets
11,792
Property, plant and equipment
1,200
Intangible fixed assets
666
Investments and Other
1,514
Noncurrent assets
3,381

June 2020
5,738
1,616
8,580
373
161
1,779
2,313

Trade payables
Income taxes payable
Provision for bonuses
Current liabilities
Noncurrent liabilities
Net assets
Total liabilities Equity

December 2019
1,203
634
280
4,222
46
10,905
15,173June 2020
661
85
70
2,304
24
8,565
10,894*Unit: ¥mn

Total assets at the end of the second quarter were 10.89 billion yen, down 4,270 million yen from the end of the previous term. On the
debit side, cash and deposits decreased due to lower sales in the Global WiFi business, inventory holdings in the mobile communication
business, and purchases of hygiene products for sale, as well as a drop in property, plant and equipment and intangible fixed assets due
to impairment losses. On the credit side, net assets declined due to a decrease in retained earnings and an increase of treasury shares.
Capital-to-asset ratio is 78.4% (71.7% at the end of the previous term).
Acquisition of treasury shares
The company acquired 909,000 common shares (1.89% of the total number of shares outstanding, excluding treasury shares) between
February 25, 2020 and February 28, 2020, in order to improve capital efficiency. The total acquisition price was 985,674,100 yen. As ofthe end of the second quarter of the fiscal year ending Dec. 2020, the total number of outstanding shares was 49,027,800, and the numberof treasury shares held by the company was 1,948,044.
Setting the commitment line
The company set a commitment line of 3.0 billion yen in May. In addition, with an overdraft facility of 250 million yen, the company
had actual cash in hand of around 8.98 billion yen at the end of the second quarter. It is possible to take financial measures to implement
agile financial strategies, including investments and measures that respond to changes in the environment. Also, even if the company
executes all of its commitment lines, its capital-to-asset ratio will remain healthy at approx. 60% (based on the consolidated balance
sheet at the end of the second quarter, if the company executes the full amount of its commitment lines and overdraft facilities).

8

Bridge Report (9416) August 28, 2020

https://www.bridge-salon.jp/

3．Fiscal Year December 2020 Earnings Estimates
3-1

Consolidated Earnings

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

FY 12/19 (actual)
27,31815,69012,365
3,325
3,358
2,226

Ratio to sales
100.0%
57.4%
45.3%
12.2%
12.3%
8.1%

FY 12/20 (forecast)
16,700
8,883
9,203
-320
-213
-1,601

Ratio to sales
100.0%
53.2%
55.1%
-

YOY
-38.9%-43.4%-25.6%-*Unit: ¥mn

Sales are estimated to fall 38.9% year on year, while operating loss is expected to be 320 million yen.
While the company assumes that there will be no social restrictions, such as a renewed declaration of a state of emergency, in the second
half of the term, it does not anticipate renting to foreign travelers (outbound and inbound) (there is a small amount of use by long-term
overseas visitors). Also, the company will conduct its management based on the assumption that the number of people travelling overseas
will continue to fall dramatically even after the end of the fiscal year ending Dec. 2020. The company expects gross profit margin to
improve after bottoming out in the second quarter (April to June) due to progress in cost reduction, and the operating loss in the second
half is projected to be lower than the operating loss in the second quarter (April to June) (operating loss is expected to be 300 million
yen in the second half and was 500 million yen in the second quarter).
Quarterly Results
12/20-1Q
Sales
Gross Profit
SG&A
Operating income

5,989
3,252
2,764
488

Ratio tosales
100.0%
54.3%
46.2%
8.1%

Ratio tosales
100.0%
43.1%
56.9%
-

2Q
3,641
1,569
2,072
-503

3Q＋4Q Forecast
7,069
4,060
4,365
-304

Ratio tosales
100.0%
57.4%
61.7%
-

*Unit: ¥mn

Trends by segment

Global WiFi
Information and Communications
Service
Others and Adjustments
Consolidated Sales
Global WiFi
Information and Communications
Service
Others and Adjustments
Consolidated Operating Income

FY 12/19(actual)17,732Composition
Ratio
64.9%

FY 12/20(forecast)
6,971

Composition
Ratio
41.7%

8,955

32.8%

9,079

54.4%

+1.4%

630
27,3183,301

2.3%
100.0%
18.6%

650
16,700-234

3.9%
100.0%-+3.2%-38.9%
-

1,363

15.2%

1,400

15.4%

+2.7%

-1,339

--1,485

-

-

3,325

12.2%

-320

-

-

YOY
-60.7%*Unit: ¥mn

9Bridge Report (9416) August 28, 2020

https://www.bridge-salon.jp/

Quarterly Results

3,347
2,515

Composition
Ratio
55.9%
42.0%

126
5,989
326
517

2.1%
100.0%
9.7%
20.6%

351
3,641
-347
299

9.6%
100.0%
14.9%

172
7,069
-214
583

2.4%
100.0%
12.8%

-355
488

8.1%

-454
-503

-

-675
-304

-

12/20-1Q
Global WiFi
Information and Communications
Service
Others and Adjustments
Consolidated Sales
Global WiFi
Information and Communications
Service
Others and Adjustments
Consolidated Operating Income

1,286
2,004

Composition
Ratio
35.3%
55.0%

3Q＋4Q
Forecast
2,337
4,561

Composition
Ratio
33.0%
64.4%

2Q

*Unit: ¥mn

4. Growth strategy considering the post-pandemic world where people will lead their daily
lives while coping with the novel coronavirus【Growth strategy】
By the end of the second quarter, the company had largely completed its loss improvement (defensive) measures. From the third quarter
onwards, the company will be on the offensive to acquire earnings, while utilizing the experience and know-how it has cultivated overthe 25 years since its founding to the maximum and making various investments.
Currently, the Global WiFi business has improved its monthly loss to less than 100 million yen, while the Information andCommunication Service business has remained at the same level as the same period last year despite the impact of COVID-19. As apolicy, the company aims to return to profitability on a single month basis in the Global WiFi business as early as possible and will
allocate all resources other than those for the domestic Wi-Fi sales and ensuring its quality and operations, (in order to maintain acompetitive advantage after the recovery of the number of travelers) to the Information and Communication Service business and new
business development. In the Information and Communication Service business, the company plans to develop businesses and services
utilizing its advantage in reeling in newly established companies in order to accelerate growth. In addition, the company will leverage
corporate culture, organizational structure, business partners, and customer assets to the fullest extent possible to cross-sell services thatare highly demanded by existing customers in the Global WiFi business and the Information and Communication Service business. The
company will also work on the development of new businesses, products and services.

4-1 Global WiFi businessAccording to data released by the Japan National Tourism Organization (JNTO), the number of people who traveled overseas in eachmonth from April to June was close to zero, down 99% year on year for both outbound and inbound travelers. Assuming that the numberof people traveling overseas will not recover this year and even after the next year, the company aims to secure profits by operating at aminimal cost. The company also strives to build an organization that can withstand operations with a minimum number of staff byimproving the efficiency of operations and productivity, etc., to maximize profit margins and increase the usage rate after the recovery
of international travelers.
Specific initiatives include “strengthening domestic Wi-Fi,” “personnel,” “shipping centers,” “airport counters,” “cost reduction,” and“new services.”

10

Bridge Report (9416) August 28, 2020

https://www.bridge-salon.jp/

Strengthening
Wi-Fi

domestic In addition to strengthening sales of Wi-Fi for telework to businesses, the company is also working to
expand sales to educational institutions and municipalities. For businesses, the company will raise
recognition of the “Global WiFi for Biz” domestic plan option, which would be always available within
the company, to expand sales.
Personnel
The company will enhance its sales promotion system for domestic Wi-Fi by transferring personnel not
involved in the development of new technologies to the Information and Communication Service
business, etc. In addition, it will use employment adjustment subsidies (special subsidies provided amid
COVID-19) to adjust the employment (absence from work) of some of the personnel.
Shipping centers
The company will utilize them as shipping centers for the Information and Communication Service
business to reduce outsourcing costs for the entire Group.
Airport counters

Cost reduction

New services

While the company has suspended operation or shortened business hours of some stores, it will movethe store digitalization strategy forward (increase the number of unmanned stores for smart pickups +SIM vending machines, etc.) in order to reduce store operating costs. It will also add a new delivery
method (convenience store) and significantly streamline the system (reduce fixed costs).
In addition to suspending or cancelling SIMs that generate fixed costs (approx. 80% of SIMs are
currently on a pay-as-you-go system), the company will cut advertising costs and reduce business travel
expenses and travel time by switching to Zoom negotiations.
The company is developing new services for corporate and individual clients travelling overseas. Also,
it will pursue business partnerships outside the Global WiFi business with domestic and international
partners.

Cost reduction
While the past effects of making costs more variable are becoming apparent, the company is working on further cost reduction. To be
specific, cost of sales has been reduced through a communication purchase contract based on the pay-as-you-go system that does notincur communication costs unless the communication is generated. The majority of SIMs that incur fixed costs (for overseas use) do notincur communication costs due to their suspension, and the communication costs of SIMs that incur fixed costs (for overseas use) arecompressed to around 4 million yen per month (with a small amount of use by long-term overseas residents).
Costs that vary depending on the number of rentals include communication costs, shipping and delivery costs, and credit card transaction
fee.

決算処理を含まない営業費用と営業損益の推移（百万円）
海外通信原価

1,400

売上原価

販管費

営業損益（右軸）

300

1,200

200

1,000

100

800

0

600

-100

400

-200

200
0

-300
1月

2月

3月

4月

5月

6月

11

Bridge Report (9416) August 28, 2020

https://www.bridge-salon.jp/

A New delivery method: commencement of pickup services at convenience storesConsidering the convenience, the company has begun offering pickup services at Seven-Eleven stores nationwide (excluding Okinawa)
near workplaces and homes. If the store is open, goods can be picked up even late at night, which can serve as an alternative to avoid
crowded places such as airport counters.

（From the reference material of the company）

4-2 Information and Communication Service businessDespite the delay caused by the temporary suspension in lease inspections due to the coronavirus crisis, the situation returned to normal
after the state of emergency was lifted. Also, in response to the rapid changes in work styles in the wake of the coronavirus crisis, thecompany worked to improve its infrastructure to facilitate telework and operation efficiency, and to reduce costs. In the future, thecompany will focus on providing products and services in response to the changes in work styles (by planning and selling products
supporting telework) and establish a sales style that is not restricted by location in order to maximize per capita productivity and generate
recurring revenue to support stable growth.
Specific efforts include “planning and selling products supporting telework,” “sales style not restricted by location,” “maximizing per
capita productivity,” “expanding sales of cost-cutting products,” “hybrid synergy model,” and “expanding recurring revenues.”
Planning and selling products supporting
telework

Sales style that is not restricted by location

Maximizing per capita productivity

Expanding sales of cost-cutting products

Hybrid synergy model

The company will plan and sell the VWS (Vision Web Service) series, “JANDI”(social networking service for business), “Meet in” (web conferencing and online
business meeting system), “tele receptionist (Telere)” (telephone answering
service), and other services that are operated and improved within the company, as
needed.
The company will actively promote teleworking and enhance online and insidesales. Also, it will expand sales areas while minimizing the number of sales visits tocustomers to reduce sales costs (such as transportation and overtime costs).
The company aims to improve productivity by maximizing the number of businessmeetings (with zero travel time) and standardizing training through the acquisitionof business meeting appointments based on its 15 years of experience in web
marketing, and strengthen retention CRM by thoroughly analyzing customer
attributes.
The company will promote sales by offering various discounted communication
services and enhance orders for low-cost website production/maintenance services.
It will also work on providing products and services that reduce initial installation
costs.
The company’s unique hybrid synergy model of “WEB marketing + CLT (customer
center) + sales” and cross-functional organizational structure will allow it tomaximize the use of customer assets and promote escalation (inter-divisioncollaboration and customer referrals).
12Bridge Report (9416) August 28, 2020

Expanding recurring revenues

https://www.bridge-salon.jp/

In addition to existing recurring revenues, the company will strengthen sales of
online products, corporate mobile phones maintenance services (Gala Support),
website maintenance services, LED sales, etc. Furthermore, it will increase thenumber of customers through business alliances.

Commencement of sales of a web conferencing and online business meeting system, “meet in.”
The system enables online business negotiations as long as there is an Internet connection. It has functions such as document and screen
sharing, contract stamping, business cards exchange with multiple people, recording, and questionnaires. Online business negotiations
and meetings can reduce travel time as well as travel expenses.
Launched “tele receptionist <Telere>,” a telephone answering service.
This is a telephone answering service that was started in response to client companies’ demands such as “I’m worried about setting up
an answering machine for companies that have introduced telework” and “I want to avoid missing calls when I’m not in the office forsales activities.” The service is available free of charge for 10 days.
Began offering a new website production service, “Vision Crafts!” full scale.
The company began offering a website production service that is easy to use and “visually communicated!” utilizing its experience of
producing more than 100 websites per month (available from 3,980 yen/month).

5. Conclusions
A report released in July by the United Nations Conference on Trade and Development (UNCTAD) said that the global tourism revenue
is expected to decline by up to $3.3 trillion due to restrictions on movement caused by the spread of COVID-19. The company’s results
for the first half of the term were also significantly affected, but it succeeded in reducing costs substantially in a short period of time. In
the second half, the Global WiFi business was able to break even on domestic Wi-Fi alone while maintaining the same structure as when
demand was recovering, thanks to constant efforts to reduce costs and a company-wide cost-cutting mindset that had been in place sinceearnings were strong. Further, the Information and Communication Service business, which has been steadily building its stock, has also
demonstrated the diversity and stability of its earnings.
The government positioned Vietnam, Thailand, Australia, and New Zealand as the first round of countries to negotiate the easing of entry
and exit from the country in June, and in July, it included Taiwan, China, South Korea, Singapore, Malaysia, Brunei, Myanmar,
Cambodia, Laos and Mongolia as the second round of countries. In June, the development Bank of Japan, a government-affiliatedfinancial institution, conducted a survey online jointly with the Nippon Kotsu Public Corporation (more than 6,200 people in 12 countries
and regions, including the U.S., France, China, and South Korea, responded to the survey) and asked the respondents whether theywould like to travel abroad after the coronavirus pandemic has ended. Many foreigners said they would like to travel again once thepandemic was over, and Japan was the most popular destination. While the company plans to operate under conservative assumptions,the business environment has been slowly improving. As the company is increasingly cutting down on its costs, profit will surge ifrevenue increases. We are looking forward to opportunities after the crisis.

<For reference: Initiatives for ESG・SDGs>
In a desire to contribute to “the future of telecommunication will be for the betterment of everyone’s future,” the company aims toincrease its corporate value and for continuous growth through management and business strategies giving consideration to ESG(“Environment, Social, and Governance.”) Further, it will contribute to the revolution in telecommunications technology and sustainable
development of the society by taking measure to solve major social issues included in the SDGs provided by the United Nations. The
SDGs are global goals intended to be achieved between 2016 and 2030, specified in the “2030 Agenda for Sustainable Development”
adopted in the United Nations Summit held in September 2015.
13

Bridge Report (9416) August 28, 2020

https://www.bridge-salon.jp/

Environmental

The company has acquired “Green Site License” that offsets carbon emissions via websites and an environmental certification forprevention of global warming by “Green Power” as part of CO2 reduction activities of website. Additionally, the company carries out
information transmission, support activities in affected areas, and cooperates with and provides support for “Shinsai Regain,” a specified
NPO supporting various activities, to achieve “realize a society where people can support each other in times of earthquake disasters.”
Furthermore, the company is promoting affordable rental of energy-saving LED lighting and paperless operation within the company.
SocialWith health and well-being, the balance between job satisfaction and economic growth, and equality in mind, the company is promoting
measures such as the use of various recruitment channels (fair hiring, referral hiring, employment of female workers (32%), multinational
workers (15.3%), and disabled people), the introduction of a personnel system and its own benefit system in line with the environmentof the times (shorter working hours, shift-work system, flextime system, hydration allowance in summer, flu shots subsidy, etc.), andcontinued increases in average annual income. Also, the company is making efforts to ensure an environment where employees canfocus on their work by running “Vision Kinds Nursery,” a company-led nursery and hire human resources with childcare responsibilities
and motivation to work, in addition to making work rules flexible and enhancing the leave system for employees at the time of childbirthor with small children, in order to support their child care and create a working environment with comfort.（established a childcare
facility on CLT’s premises, where more than 90% of the employees are women.）In addition to the above, the company supports theactivities of Japan Heart, which works based on the idea of “delivering medical care to where it does not reach” to realize a society where
everyone can receive medical care equally regardless of their countries, regions, race, politics, religion or circumstances and feel “gratefulto have been born,” as one of the corporate members.
GovernanceThe company has obtained “ISO/IEC 27001,” the ISMS international standard, and is taking measures for information assets’ correctand safe handling, operation, monitoring, revision, maintenance, and continuous improvement, in order to protect them within theapplicable range from the threats related to information security.
Furthermore, the company promotes risk management in business activities and thorough compliance to strengthen governanceconsidering the importance to win continuous trust from the stakeholders, and also appoints 3 out of 6 directors from outside(including
one woman) who are enterprise managers, and all 4 auditors too from outside who are accountants or lawyers to ensure transparency
and soundness in management.

14

Bridge Report (9416) August 28, 2020

https://www.bridge-salon.jp/<Reference: Regarding corporate governance>◎ Organization type, and the composition of directors and auditors
Organization typeCompany with an audit and supervisory board
Directors
6 directors, including 3 outside one
Auditors
4 auditors, including 4 outside ones
◎ Corporate Governance Report ： Updated on April 1, 2020
Basic policy
Our corporate group improves ourselves to change clients’ expectations into impression, pursues innovation without hesitation toactualize the ideal, always feels grateful about the support of many people (stakeholders), and operates its business activities with ahumble mindset. Under this code of conduct, Vision observes laws, in-company regulations, and policies, carries out business in goodfaith, 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. For instance, in our company the board of directors will designate top executives from candidates who are consideredappropriate for the position in terms of their personality, knowledge, business performance, and other factors, in accordance with ourmanagement philosophy and business strategies. We will hold discussion on supervision of succession planning.
<Disclosure Based on the Principles of the Corporate Governance Code (Excerpts)>【Principle 4-8 Effective utilization of independent outside directors】
In the company, three of the six directors are independent outside directors. We believe that the three independent outside directors willcontribute to strengthening our corporate governance by utilizing their extensive experience in web marketing, inbound business, thefinancial industry, global business, and other areas, as well as their experience as corporate managers, to monitor the company’s
management and provide advice on the company’s overall management.
【Principle 4-9 Criteria for judging the independence of independent outside directors and their qualifications】
The company selects its directors with reference to the Companies Act and the standards established by the Tokyo Stock Exchange. In
addition, the company has selected individuals who can provide advice on all aspects of the company’s management based on theirextensive experience and knowledge.
【Supplementary Principle 4-11-1 Preconditions for ensuring the effectiveness of the board of directors and board of corporate auditors(policies and procedures for the composition and selection of the board of directors)】
The company’s board of directors consists of internal directors who are well versed in the company’s business and operations, andexternal directors who have a wealth of experience and a broad range of knowledge to ensure a balance and diversity of knowledge,
experience, and abilities across the board.
【Supplementary principle 4-11-2 Preconditions for ensuring the effectiveness of the board of directors and board of corporate auditors(concurrent positions of directors and corporate auditors)】
Directors and corporate auditors allocate the time and efforts necessary to properly perform their roles and responsibilities to their duties
as directors and corporate auditors, and their concurrent positions are within a reasonable range. The status of their concurrent positions
is disclosed in the reference document of the notice of the general meeting of shareholders, the business report, and the annual securities
report.

15

Bridge Report (9416) August 28, 2020

https://www.bridge-salon.jp/【Supplementary Principle 4-11-3 Preconditions for ensuring the effectiveness of the board of directors and board of corporate auditors(analysis and evaluation related to the effectiveness of the board of directors)】
Based on the current status of comments and discussions on the board including the outside directors and outside corporate auditors, we
believe that the effectiveness of the company’s board of directors is maintained. In addition, each director is asked to complete a selfevaluation questionnaire, the results of which are confirmed by the external auditors, in an effort to further improve the effectiveness andfunctions of the system.
【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, tocontribute to the sustainable growth of the company and the medium to long-term improvement in corporate value. As of now, Visionholds a briefing session attended by the president or a director in charge of IR two or more times per year, meetings with institutional
investors domestic and foreign, briefing sessions for individual 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 theleakage 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) 2020 Investment Bridge Co., Ltd. All Rights Reserved.

For back numbers of Bridge Reports on Vison Inc. (9416) and Bridge Salon(IR seminar), please go to our website at the following URL:
http://www.bridge-salon.jp/

16