Ly Corporation · TSE:4689
Ly — Z Holdings — FY2021 Earnings Presentation
55 slides from Ly's earnings presentation, Apr 28, 2022
Slide 1: FY2021 Full Year & Q4 Appendix
Security Code: 4689 Z Holdings Corporation Business Results FY2021 Full Year & Q4 Appendix April 28, 2022
Slide 2: FY2021 Q4 Consolidated Business Results
FY2021 Q4 Consolidated Business Results
Slide 3: FY2021 Q4 Factors of Change in Operating Income
FY2021 Q4 Factors of Change in Operating Income Whole Group (JPY B) FY2021 Q4 YoY Difference YoY Major Factors of Change (JPY B) • LINE consolidation +54.7 Revenue 407.2 +75.2 +22.7% • ASKUL Group +7.1 • LINE consolidation +6.2 Cost of sales 130.6 +17.1 +15.1% • ASKUL Group +6.1 SG&A 270.3 +71.6 +36
Slide 4: FY2021 Q4 Factors of Change in Net Income Attributable to Owners of the Parent
FY2021 Q4 Factors of Change in Net Income Attributable to Owners of the Parent Whole Group (JPY B) FY2021 Q4 YoY Difference YoY Major Factors of Change (JPY B) Operating income 12.9 -6.9 -34.7% - • Gain on sales of SRE Holdings shares +5.4 Other non-operating income 17.2 +10.5 +157.2% • Deemed gain
Slide 5: FY2021 Q4 Equity in Losses of Associates and Joint Ventures
FY2021 Q4 Equity in Losses of Associates and Joint Ventures Whole Group Major Equity- Equity Based in Business Equity in Losses of Associates and Joint Ventures2 Method Affiliates Ratio1 Content (JPY B) WEBTOON U.S. 33.4% • Operation of e-manga services Entertainment Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Co
Slide 6: Adjusted EBITDA – Breakdown of Adjustment Items
Adjusted EBITDA – Breakdown of Adjustment Items Whole Group (JPY B) Depreciation Stock Adjusted EBITDA & Loss on compensation amortization retirement of Impairment expenses Other Op. income ＋ depreciation & fixed assets losses amortization ± EBITDA +35.2 adjustment items 46.3 +0.9 +0.2 +3.4 -6.5 EBI
Slide 7: Impact from Consolidation of LINE Corporation
Impact from Consolidation of LINE Corporation Whole Group Item LINE FY2021 Q4 (JPY B) FY2021 Q4 (Excl. LINE ) (JPY B) YoY Revenue 79.9 327.3 +6.7% Operating income -8.2 21.1 -26.5% Net income -11.5 22.9 +72.0% Net income attributable to owners of the parent -11.5 22.0 +128.9% 6
Slide 8: Impact from Consolidation of LINE Corporation (Goodwill, PPA)
Impact from Consolidation of LINE Corporation (Goodwill, PPA) Whole Group • Measured based on assumptions such as estimated future cash flows, discount rate, declining rate for existing customers, future revenue generated from the trademarks, royalty rates, etc. • Began amortizing PPA from FY2021 Q1
Slide 9: Impact from Consolidation of ZOZO, Inc. (Goodwill, PPA)
Impact from Consolidation of ZOZO, Inc. (Goodwill, PPA) Whole Group Item Amount (JPY B) Annual Amortization Amount (JPY B) Amortization Period (Straight Line) Goodwill 212.9 - - PPA 502.1 13.2 - Customer base (Shops/users) 322.0 - 18-25 years Trademarks1 178.7 - No amortization Others 1.4 - 4 years
Slide 10: FY2021 Q4 Consolidated Statement of Financial Position
FY2021 Q4 Consolidated Statement of Financial Position Whole Group (JPY B) FY2021 Q3 FY2021 Q4 Difference Assets 7,119.8 7,110.3 -9.5 Cash and cash equivalents 1,235.6 1,127.5 -108.1 Trade and other receivables 362.3 368.6 +6.2 Loans in credit card business 460.4 475.5 +15.0 Investment securities in
Slide 11: Financial Data: CAPEX and Adjusted FCF
Financial Data Whole Group CAPEX1 Adjusted FCF2 (JPY B) (JPY B) 66.1 151.2 126.6 61.1 44.5 38.9 30.7 18.5 34.4 18.1 22.2 -26.4 -24.6 -16.7 -42.6 32.0 29.6 23.7 5.6 8.8 22.5 0.05 6.7 35.4 24.0 -231.7 22.5 23.2 17.0 -266.1 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Property and Equipm
Slide 12: Financial Data: Interest-Bearing Debt and Net Leverage Ratio
Financial Data Whole Group Interest-Bearing Debt & Net Interest-Bearing Debt1 Net Leverage Ratio2 / Adjusted Net Leverage Ratio3 (Excludes banking business) (Excludes banking business) (JPY B) (JPY B) 1,757.3 1,747.8 2.87x 1,624.4 3.00 900 177.9 176.1 2.55x 2.52x 1,431.8 186.0 800 1,357.9 234.0 234.
Slide 13: Change in Reporting Segments
Change in Reporting Segments Whole Group • Introduced 3 new business segments: Media, Commerce, and Strategic by classifying businesses according to the growth phase of each business. FY2020 FY2021 Q1 – Media/Advertising, Search, Marketing solution, Vertical Commerce Media Business Business Media/Ad
Slide 14: Media Business
Media Business
Slide 15: Consolidation of E-book Businesses
Consolidation of E-book Businesses Media Business • Consolidated co-existing e-book businesses within the Group. As a result of a series of transactions, ZHD now owns 33.4% of WEBTOON Entertainment Inc. In addition to reinforcing competitiveness in the domestic market, will strengthen development in
Slide 16: Full-Year Total Advertising Revenue
Full-Year Total Advertising Revenue Media Business • In addition to the recovery in advertisers’ demand, product improvements and launch of new advertising products drove revenue to JPY581.5 B. Group Total Advertising Revenue1 Group Total Advertising Revenue – YoY Growth Rate1 (JPY B) 581.5 +47.5% 5
Slide 17: Business Results (P/L): Media Business
Business Results (P/L): Media Business Media Business (JPY Million) FY2020 Q41 FY2021 Q4 YoY Revenue 117,517 169,101 +43.9% Yahoo Japan (pre-integration ZHD) Advertising revenue 83,202 90,087 +8.3% Search advertising 45,134 49,383 +9.4% Display advertising (Programmatic)2 31,394 34,033 +8.4% Display
Slide 18: Major Services and Products of Media Business Segment
Major Services and Products of Media Business Segment Media Business Item Breakdown Yahoo! JAPAN Ads Search advertising Yahoo! JAPAN Ads “Search advertising” Display advertising Programmatic advertising Yahoo! JAPAN Ads “Display advertising” (Programmatic-based), etc. Reservation advertising Yahoo!
Slide 19: Advertising Products
｜ Advertising Products Media Business Item Fee Calculation Placement Pages Type of Advertiser Search advertising Cost per-click Search results pages Major corporations/SMEs Display advertising Programmatic Top page Yahoo! JAPAN Ads “Display advertising” Cost per-click Interior pages of service sites
Slide 20: Advertising Products
｜ Advertising Products Media Business Item Fee Calculation Placement Pages/Product Outline Type of Advertiser Display ads Cost per-click LINE VOOM LINE VOOM tab Major corporations/SMEs Cost per-view Cost per-click LINE NEWS NEWS tab Major corporations/SMEs Cost per-view Cost per-click Chat List Top
Slide 21: Commerce Business
Commerce Business
Slide 22: Updates on Business Strategy: Measures to Increase LINE Official Accounts
Updates on Business Strategy: Measures to Increase LINE Official Accounts Commerce Business • Cross-selling to Yahoo! JAPAN Shopping and PayPay Mall merchants progressing steadily. • In FY2022, by enhancing user experience, will aim to increase revenue of LINE Official Accounts through increased num
Slide 23: LINE GIFT
｜ LINE GIFT Commerce Business • A service that allows users to give gifts to family and friends connected through LINE. • Two types of gifts: “E-Gifts” – suitably priced for casual presents; “Delivery Gifts” – available in wide price ranges to suit various purposes. User Attribute1 Givers Receivers
Slide 24: Yahoo! JAPAN Mart by ASKUL
Mart ｜ Yahoo! JAPAN Mart by ASKUL Commerce Business • Rebranded to “Yahoo! JAPAN Mart by ASKUL” for full launch. Number of stores increased to 19. • Efforts continue to speedily establish a system that can serve all 23 wards of Tokyo within FY2022. Item Status Next Steps Delivery Bases (Tokyo’s 23 w
Slide 25: Business Results (P/L): Commerce Business
Business Results (P/L): Commerce Business Commerce Business (JPY Million) FY2020 Q41 FY2021 Q4 YoY Revenue 190,649 208,657 +9.4% Merchandise EC 152,968 165,639 +8.3% Shopping business 70,918 80,491 +13.5% Reuse business 12,871 13,714 +6.6% ASKUL online BtoB business 69,178 71,434 +3.3% Services EC 2
Slide 26: Main Service Platforms of Shopping Business
Main Service Platforms of Shopping Business Commerce Business Existing E-commerce Quick Commerce Social Commerce Shopping Mall Mart Mall-type Mall-type Direct sales Direct sales Immediate delivery Mall-type E-commerce store Live commerce (Approx. 390 mil. (Approx. 1,700 (Approx. 900,000 (No. of item
Slide 27: Major Services and Products of Commerce Business Segment
Major Services and Products of Commerce Business Segment Commerce Business Item Breakdown Merchandise EC - Yahoo! JAPAN Shopping, PayPay Mall, ZOZOTOWN, LOHACO, Charm, LINE SHOPPING, Shopping business LINE FRIENDS, LINE GIFT, MySmartStore, Yahoo! JAPAN Mart by ASKUL Reuse business YAHUOKU!, PayPay F
Slide 28: KPI - Definition of EC Transaction Value
KPI - Definition of EC Transaction Value Commerce Business Item Major Services EC transaction value - Merchandise - Yahoo! JAPAN Shopping, PayPay Mall, ZOZOTOWN, LOHACO, Charm, LINE SHOPPING, Shopping business LINE GIFT, LINE FRIENDS, MySmartStore, Yahoo! JAPAN Mart by ASKUL Reuse business YAHUOKU!,
Slide 29: Strategic Business
Strategic Business
Slide 30: Updates on Business Strategy: PayPay Atobarai
｜ Updates on Business Strategy: PayPay Atobarai Strategic Business • PayPay Atobarai (deferred payment) now made available in Yahoo! JAPAN Shopping and PayPay Mall. • In FY2022, to focus on the cross-use of e-commerce and payment/financial services. Cross-Use of E-commerce and Payment/Financial Serv
Slide 31: Updates on Business Strategy: PayPay's Measures Against Fraudulent Use
｜ Updates on Business Strategy: PayPay’s Measures Against Fraudulent Use Strategic Business • To ensure safety and security of users, focused on reinforcing KYC (identity verification) and measures to prevent fraudulent use. • The incidence rate of fraudulent use of PayPay is lower than credit cards
Slide 32: PayPay's Major Full-Year KPIs
｜ PayPay’s Major Full-Year KPIs Strategic Business • Various KPIs performed well even after the introduction of payment fee to small and medium-sized merchants. PayPay GMV No. of PayPay Payments Cumulative PayPay Registered Users No. of PayPay Merchants1 (JPY B) (Million) (Million) (Million) 5,443.6
Slide 33: Major Full-Year KPIs of PayPay Card
｜ Major Full-Year KPIs of PayPay Card Strategic Business • Launched PayPay Card/PayPay Atobarai (deferred payment). Aiming to accelerate growth of membership while reinforcing sales promotion activities. Active Cardholders Transaction Volume Revolving Balance (Million) (JPY B) (JPY B) 8.31 2,908.1 1
Slide 34: Major Full-Year KPIs of PayPay Bank
｜ Major Full-Year KPIs of PayPay Bank Strategic Business • Various KPIs performed steadily due to strengthened collaborations with PayPay. No. of Accounts Deposit Balance Loan Balance (Million) (JPY B) (JPY B) 6.02 1,461.7 416.7 5.12 1,216.8 4.58 4.07 3.77 920.3 247.2 803.8 750.3 97.4 73.8 79.1 FY20
Slide 35: Capital Structure (Shareholding Ratio)
｜ Capital Structure (Shareholding Ratio) Strategic Business May 2018 As of end of As of end of As of end of As of end of After conversion of preferred stocks (At founding) May 2019 Mar 2020 Dec 2020 Mar 2022 & Yahoo Japan 50% 25% 25% 25% 25% Paytm’s exercise of stock options3 SoftBank 50% 25% 25% 25
Slide 36: LINE NFT Business Service Map
｜ LINE NFT Business Service Map Strategic Business • Rapid spread of blockchains as crypto-assets, has expanded NFTs into all industries including digital content, gaming items, and the field of metaverse. Issue Trade/Manage Use/Reproduce Crypto-asset Issuer Crypto-asset Exchange Metaverse Crypto-as
Slide 37: Business Results (P/L): Strategic Business
Business Results (P/L): Strategic Business Strategic Business (JPY Million) FY2020 Q41 FY2021 Q4 YoY Revenue 23,304 29,233 +25.4% Fintech 23,134 28,629 +23.8% PayPay Card2 11,134 13,464 +20.9% PayPay Bank2 7,905 7,596 -3.9% Other fintech (LINE Fintech, etc.) 4,094 7,568 +84.8% Other Strategic Busine
Slide 38: PayPay Card Corporation – Business Results
PayPay Card Corporation – Business Results Strategic Business Revenue/Operating Income (Non-Consolidated IFRS)1 Statement of Financial Position (JGAAP)1 (JPY B) (JPY B) 13.6 13.4 FY2021 FY2021 Difference Q3 Q4 11.4 11.5 Assets 757.3 776.2 +18.9 11.1 Cash and cash equivalents 72.7 63.3 -9.4 Trade and
Slide 39: PayPay Bank Corporation – Business Results
PayPay Bank Corporation – Business Results Strategic Business Revenue/Operating Income (Non-Consolidated IFRS)1 Statement of Financial Position (JGAAP)1 (JPY B) (JPY B) 8.9 FY2021 FY2021 8.4 8.5 8.6 Difference 8.3 Q3 Q4 Assets 1,567.8 1,583.9 +16.0 Cash and cash equivalents 386.9 334.3 -52.5 Trade a
Slide 40: Major Services and Products of Strategic Business Segment
Major Services and Products of Strategic Business Segment Strategic Business Item Breakdown Fintech - PayPay Card - PayPay Bank - PayPay Asset Management, PayPay Insurance, Magne-Max, Other fintech LINE Pay, LINE Securities, LINE Score, LINE Pocket Money, LINE BITMAX, LINE NFT, etc. Others AI, LINE
Slide 41: Business Structure of PayPay Card and PayPay Atobarai
Business Structure of PayPay Card and PayPay Atobarai Strategic Business Instrument Available at Credit Line Revolving/Installment Payment Main Revenue Sources Provided by Top-up & Pay Payment from PayPay merchants • Payment fee from PayPay PayPay app - - PayPay Balance (Online/offline) merchants Co
Slide 42: International Business
International Business
Slide 43: International Business Development
｜ International Business Development LINE • Overwhelming reach and market share in Asian countries and regions, mainly Taiwan, Thailand, and Indonesia. • Generating revenue mainly from advertising, stickers, and game businesses based on messaging. International Business Revenue5 Taiwan 22 mil MAU1 （
Slide 44: International Business Development
｜ International Business Development LINE • To focus on expanding fintech and e-commerce/O2O services based on messengers and payments to generate new revenue. Fintech O2O Pure Internet bank Taxi dispatch service Taiwan • Exceeded 1.1 million users in approximately 1 year • 6.68 million followers on
Slide 45: Non-Financial Information
Non-Financial Information
Slide 46: User Base
User Base Whole Group Yahoo Japan - Number of Monthly Logged-in User IDs LINE - Monthly Active Users (Million) (Million) March 2022 Global MAU1：193 54.5 54.7 55.4 176 52.7 51.9 169 171 173 174 10 9 9 11 10 52 53 53 49 50 21 21 21 21 22 88 89 89 90 92 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q4'20 Q1'21 Q2'21 Q
Slide 47: Transition to the Prime Market
Transition to the Prime Market Whole Group • As announced by Tokyo Stock Exchange on January 11, 2022, transitioned to the Prime Market on April 4, 2022. Initiatives toward Transition to the Prime Market Exercise of Stock Acquisition Rights (Illustrative Image)1, 2 1 Acquisition of ZHD stocks In the
Slide 48: Materiality of Z Holdings Group (Materiality Evaluation Map)
Materiality of Z Holdings Group (Materiality Evaluation Map) Whole Group Improve services through the use of data Ensure security as a social infrastructure Contribute to the healthy and safe development of the Internet society Secure safe telecommunications and Support the promotion of disaster pre
Slide 49: Materiality Matrix for Z Holdings Group (Identified Materiality)
Materiality Matrix for Z Holdings Group (Identified Materiality) Whole Group Business Providing new (WOW!) experiences Customers foundation using data/AI Operating safe & secure digital platforms Partners UPDATE Building a resilient social infrastructure National and local governments THE Reinforcin
Slide 50: 2030 Carbon Neutrality Declaration
2030 Carbon Neutrality Declaration1 Whole Group • ZHD Group as a whole, aims to achieve carbon neutrality where greenhouse gas (GHG) emissions are reduced to net-zero by 2030. • Contribute to the realization of a sustainable society by encouraging carbon neutral initiatives both in and out of the ZH
Slide 51: Acknowledgment as a Sustainable Company
Acknowledgment as a Sustainable Company1 Whole Group • Acknowledged by various evaluators. • Aim to maintain/enhance a high third-party evaluation after integration, to secure our position as the industry- leading ESG issuer. 1. As of 2021, Z Holdings Corporation received an MSCI ESG Rating of AAA.
Slide 52: External ESG Evaluations
External ESG Evaluations Whole Group S&P Global – DJSI MSCI ESG Rating1 Approx. 320 companies selected Score rising every year since 2018 around the world Named as DJSI World Index Received Highest Rating: constituent for two AAA Named for the first time to MSCI Japan consecutive years ESG Select Le
Slide 53: Released "Integrated Report Portal"
Released “Integrated Report Portal” Whole Group • Financial/non-financial information useful for investment decisions are kept up to date Vision and Strategy Sustainability Value Creation Business Performance URL: (English) https://www.z-holdings.co.jp/integrated-report/en/ (Japanese) https://www.z-
Slide 54: Disclaimer
Disclaimer Statements made at the meeting or included in the documents that are not historical facts are forward-looking statements about the future performance of Z Holdings Corporation (Company, Z Holdings, ZHD) and its consolidated subsidiaries and affiliates. The Company cautions you that a numb
Slide 55: Unleashing the infinite potential of all people, with the power of information technology
Unleashing the infinite potential of all people, with the power of information technology