Rakuten Group, Inc. · TSE:4755
Rakuten — Q3 2024 Earnings Presentation
82 slides from Rakuten's earnings presentation, Nov 13, 2024
Slide 1: FY2024 Third Quarter Consolidated Financial Results Appendix
FY2024 Third Quarter Consolidated Financial Results Appendix November 13, 2024 Rakuten Group, Inc. • Figures in this document are rounded to one decimal place, so there may be some discrepancies with the numbers in other disclosed materials. • Past figures may be retroactively adjusted due to change
Slide 2: Executive Summary
Executive Summary Consolidated Results • Revenue increased across all segments: Internet Services, FinTech, and Mobile. Q3 revenue: JPY 566.7 bn (+9.3% YoY), a record high. Rakuten Mobile's revenue increased, losses improved through cost optimization, and Rakuten Card showed strong profit growth. Co
Slide 3: Executive Summary: Internet Services
Executive Summary Internet Services • Segment revenue: JPY 314.6 bn (+4.4 YoY), Non-GAAP OI*1: JPY 21.2 bn (+54.2% YoY), achieving increases in both revenue and profit • Domestic EC GMS: JPY 1.5 tn (-6.9% YoY), due to a high YoY hurdles from a rush to purchase on Rakuten Ichiba up to the end of Sept
Slide 4: Executive Summary: FinTech
Executive Summary FinTech • Segment revenue: JPY 208.2 bn (+12.8% YoY), Non-GAAP OI*1: JPY 40.0 bn (+57.2% YoY). The customer base and transaction value continued to expand in each business • Rakuten Card: Shopping GTV grew on higher card membership and average customer spending. Q3/24 Shopping GTV:
Slide 5: Executive Summary: Mobile
Executive Summary Mobile • Segment revenue: JPY 106.0 bn (+19.5 YoY), Non-GAAP OI*1 : JPY -48.7 bn (+JPY 26.5 bn YoY) • Rakuten Mobile, Inc.: Increase in subscribers and Data ARPU. Revenue: JPY 72.5 bn (+30.3% YoY). Coupled with the effects of ongoing cost reductions, Non-GAAP OI*1: JPY -50.6 bn (+J
Slide 6: Appendix Contents
Appendix Contents 1 Ecosystem KPIs Number of Monthly Active Users and Ratio of Users of Two or More Services Membership Value Global GTV 2 Consolidated Financial Results Consolidated Financial Results Summary Revenue and Non-GAAP Operating Income or Loss Breakdown Overview of Consolidated and Major
Slide 7: 1. Ecosystem KPIs
1. Ecosystem KPIs
Slide 8: Rakuten Ecosystem Services Line-Up (Excerpt)
Rakuten Ecosystem Services Line-Up (Excerpt) Established leading positions in many markets. Highest cross-use rate among MNO carriers* Internet Services Segment FinTech Segment Mobile Segment Internet Services Overseas Businesses Payment Insurance Securities Bank Mobile (Rakuten Ichiba) (Rakuten Rew
Slide 9: Number of Monthly Active Users and Ratio of Users of Two or More Services
Number of Monthly Active Users and Ratio of Users of Two or More Services Monthly Active User Growth in Japan Ratio of Users of Two or More Services*2 42.72 mm 76.6 % + 4.4 % YoY*1 + 0.9 pts YoY*3 Sep/19 Sep/20 Sep/21 Sep/22 Sep/23 Sep/24 Sep/19 Sep/20 Sep/21 Sep/22 Sep/23 Sep/24 *1: Comparison of m
Slide 10: Membership Value
Membership Value*1 Although decreased due to high YoY hurdles caused by nationwide travel campaign (partially ended in July 2023) and accelerated demand of hometown tax (in September 2023), etc., some services such as Rakuten Bank and Rakuten Card, membership value increased due to increase in numbe
Slide 11: Total Global GTV
Total Global GTV*1*2 (JPY tn) +9.5% *3 YoY LTM Total Global GTV 8.4 10.1 11.1 JPY 43.3tn Q3/22 Q3/23 Q3/24 *1: Global Gross Transaction Value = Domestic E-Commerce GMS + Credit Card GTV + Rakuten Edy GTV + Rakuten Pay GTV+ Rakuten Point Card GTV + Overseas E-Commerce GTV + Rakuten Rewards (Ebates) G
Slide 12: 2. Consolidated Financial Results
2. Consolidated Financial Results
Slide 13: Consolidated Financial Results Summary
Consolidated Financial Results Summary*1 (JPY bn, rounded) Q3/23 Q3/24 YoY Consolidated Revenue 518.4 566.7 +9.3% Internet Services Segment 301.2 314.6 +4.4% FinTech Segment 184.6 208.2 +12.8% Mobile Segment 88.7 106.0 +19.5% Adjustments -56.0 -62.1 -6.1 Non-GAAP Operating Income (Loss)*2 -41.0 12.3
Slide 14: Revenue Breakdown
Revenue Breakdown* (JPY bn) +9.3% YoY Internet Services Segment *Effective September 1, 2023, Rakuten Pay (online payment) business and Rakuten Points (online) business were transferred from the Internet Services segment to the FinTech segment. No retrospective revisions have been made to past resul
Slide 15: Non-GAAP Operating Income or Loss Breakdown
Non-GAAP Operating Income or Loss Breakdown*1*2 (JPY bn) JPY +53.4bn YoY Q3/23 Domestic EC Other Internet Minority FinTech Mobile Consolidation Q3/24 Services Investments Segment Segment Adjustment (excl. Minority Investment) Internet Services Segment *1: Effective September 1, 2023, Rakuten Pay (on
Slide 16: EBITDA Breakdown
EBITDA Breakdown*1*2*3 (JPY bn) +159.1% YoY Internet Services Segment *1: Effective September 1, 2023, Rakuten Pay (online payment) business and Rakuten Points (online) business were transferred from the Internet Services segment to the FinTech segment. No retrospective revisions have been made to p
Slide 17: Balance Sheets as of September 30, 2024
*1*2 ’B – As of September 30, 2024 Non-consolidated balance sheets include internal transactions (JPY bn) Consolidated *3 Rakuten Group, Inc. Rakuten Mobile, Inc. Total Assets Total Assets Total Assets *4 Rakuten Bank, Ltd. Rakuten Card Co., Ltd. Rakuten Securities, Inc. Total Assets Total Assets To
Slide 18: Consolidated Balance Sheet as of September 30, 2024
’B () – As of September 30, 2024 (JPY bn, rounded) Q2/24 Q3/24 QoQ Rakuten Group, Inc. (Consolidated) Total Assets 24,828.3 24,879.7 +0.2% *1 Cash and Equivalents 5,942.2 5,886.9 -0.9% Financial Assets for Securities Business 4,857.0 4,878.4 +0.4% Investment Securities and Loans for Banking Business
Slide 19: Non-consolidated and Rakuten Mobile Balance Sheets
’B ( ) – As of September 30, 2024 *1*2 (JPY bn, rounded) Q2/24 Q3/24 QoQ Rakuten Group, Inc. (Non-consolidated) *Including internal transactions Total Assets 4,798.6 4,870.5 +1.5% *3 Cash and Cash Equivalents, etc. 506.2 679.9 +34.3% Other Assets 4,292.5 4,190.6 -2.4% Total Liabilities 3,049.3 3,140
Slide 20: 3. Segment Results and KPIs
3. Segment Results and KPIs 20
Slide 21: Rakuten Group Organizational Chart and Segment Correspondence Chart
Rakuten Group Organizational Chart and Segment Correspondence Chart Rakuten Group, Inc. signed share transfer agreement to transfer 14.99% of Rakuten Card Co., Ltd. (Approx. JPY 165 bn) to Mizuho FG on November 13th Will continue to be a consolidated subsidiary of Rakuten Group, Inc. after the trans
Slide 22: Segment Management System
Segment Management System*1 Internet Services FinTech Mobile Segment Leader Segment Leader Segment Leader *2 Hiroshi Mikitani Masayuki Hosaka Kentaro Hyakuno Kazuhiro Suzuki Representative Director, President of FinTech COO Representative Director and Chairman, President and Group Company President
Slide 23: Internet Services Segment Structure
Internet Services Segment Structure * Internet Services Segment Domestic EC ◼ Rakuten Ichiba Core Businesses ◼ Rakuten Travel ◼ Rakuten Rebates ◼ Rakuten BIC From September 1, 2023, Rakuten Pay (online ◼ Rakuten GORA etc. payment) business and Rakuten Points (online) business transferred to FinTech
Slide 24: FinTech Segment Structure
FinTech Segment Structure FinTech Segment Rakuten Card ◼ Rakuten Card Rakuten Bank ◼ Rakuten Bank Rakuten ◼ Rakuten Securities and Overseas Subsidiaries Securities ◼ Rakuten Life Insurance Insurance ◼ Rakuten General Insurance Business ◼ Rakuten Insurance Planning etc. ◼ Rakuten Pay Rakuten ◼ Rakute
Slide 25: Mobile Segment Structure
Mobile Segment Structure Mobile Segment Rakuten ◼ Rakuten Mobile Mobile Rakuten ◼ Rakuten Symphony Symphony Rakuten ◼ Rakuten Electricity Energy ◼ Rakuten Gas etc. Others ◼ Rakuten Communications etc.
Slide 26: Internet Services Segment
Internet Services Segment 26
Slide 27: Internet Services Segment Financial Results
Internet Services Segment Financial Results*1*2 Non-GAAP Q3/24 (JPY bn) Revenue YoY YoY Operating Income Domestic EC 230.6 +2.5% 25.4 -10.7% Core Businesses 198.7 +1.4% 35.1 -9.5% Growth Investment Businesses 31.9 +10.3% -9.7 +0.6 Other Internet Services 84.0 +10.0% -4.2 +10.5 *3*4 International Bus
Slide 28: Internet Services Segment Revenue Breakdown
Internet Services Segment Revenue Breakdown*1 (JPY bn) +4.4% YoY *2 B B B *2*3 Domestic EC Other Internet Services *1: Effective September 1, 2023, Rakuten Pay (online payment) business and Rakuten Points (online) business were transferred from the Internet Services segment to the FinTech segment. N
Slide 29: Internet Services Segment Non-GAAP Operating Income Breakdown
Internet Services Segment Non-GAAP Operating Income Breakdown*1*2 (JPY bn) +54.2% YoY Q3/23 Core Businesses Growth Logistic International Minority Others*3 Q3/24 Investment Business Business Unit *3*4 Investment Businesses (excl. Logistic Business) Domestic EC Other Internet Services *1: Effective S
Slide 30: Domestic E-Commerce GMS
Internet Services Segment Domestic EC Other Internet Services Domestic E-Commerce GMS *1*2*3 Domestic E-commerce GMS: -6.9% YoY, mainly due to the Hometown tax rule changes and continued effects of SPU revisions. However, excluding these temporary factors, underlying growth remained positive (JPY bn
Slide 31: Domestic E-Commerce Revenue
Internet Services Segment Domestic EC Other Internet Services Domestic E-Commerce Revenue * Core business growth slowed due to Hometown Tax revision on Rakuten Ichiba and nationwide travel support on Rakuten Travel. B p f y p “ -p ” (JPY bn) Domestic EC 224.9 230.6 +2.5% 195.8 28.9 31.9 YoY 25.4 Gro
Slide 32: Domestic E-Commerce Operating Income
Internet Services Segment Domestic EC Other Internet Services Domestic E-Commerce Operating Income * Excluding one-off factors such as Payment online transfer, SPU 0/5 rule revisions and the National Travel Support, the estimated 2-year CAGR of operating profit is approximately 22% (JPY bn) Domestic
Slide 33: Domestic EC: Adjusting for Temporary Factors
Internet Services Segment Domestic EC Other Internet Services Domestic EC: Adjusting for Temporary Factors Domestic EC GMS was negative YoY due to high YoY hurdles from last-minute demand following strong hometown tax donations in Q3/23. Expecting growth from Q4 onwards as impact of SPU/05 rule revi
Slide 34: Domestic EC: Adjustment Items in FY2024
Internet Services Segment Domestic EC Other Internet Services Domestic EC: Adjustment Items in FY2024 In FY2024, our goal is to continue growing operating income even though the growth rate of Domestic EC GMS is expected to moderate compared to FY2023, considering the following factors We aim to acc
Slide 35: Growth of Online Shopping from a Macroeconomic Perspective
Internet Services Segment Domestic EC Other Internet Services Growth of Online Shopping from a Macroeconomic Perspective Online shopping usage surged with the spread of COVID-19, and has become firmly established, even as the economy normalized Online shopping expenditure remains steady, despite inf
Slide 36: Upgrading Logistics for Continued Development of Rakuten Ichiba
Internet Services Segment Domestic EC Other Internet Services Upgrading Logistics for Continued Development of Rakuten Ichiba “Saikyo y” J y Aiming to improve user convenience and reduce redeliveries through expanded delivery and receipt options Growth rate of GMS of Improvement in products using UX
Slide 37: Rakuten Travel
Internet Services Segment Domestic EC Other Internet Services Rakuten Travel p y ’ p , q k warnings and multiple typhoons, Rakuten Travel GTV grew +43.1% compared to pre-COVID levels in 2019 *1 Areas Affected by Natural Disasters Alert over risk of Nankai Trough Megaquake issued (8/8, 9) Regions Aff
Slide 38: List of Logistics Centers
Internet Services Segment Domestic EC Other Internet Services List of Logistics Centers JP Rakuten Logistics Rakuten Mart Logistics Centers Yao Opened in 2023 RSL* Kawanishi Opened in 2012 Rakuten 24 Hirakata Opened in 2019 RSL* Nanko Opened in 2016 Narashino Ibaraki Fukuoka Rakuten 24 Opened in 202
Slide 39: Other Internet Services Revenue
Internet Services Segment Domestic EC Other Internet Services Other Internet Services Revenue *1 ◼ Rakuten Viber Contents*2 sales continue to recover, and telecom*2 revenues etc., also contributed ◼ Rakuten Kobo also saw continued strong sales of new color devices launched in April as subscription u
Slide 40: Other Internet Services Operating Income
Internet Services Segment Domestic EC Other Internet Services Other Internet Services Operating Income *1*2 ◼ In addition to significant improvements in Rakuten Viber, Rakuten Kobo, and other overseas businesses, Minority Investment performance drove significant YoY profit growth ◼ B ’ *3 focus on m
Slide 41: Rakuten Rewards
Internet Services Segment Domestic EC Other Internet Services Rakuten Rewards * Top-line continues to grow steadily Minor profit decline due to the impact of foreign exchange rate fluctuations, but cost reductions ongoing (USD mm) GMS Take Rate Revenue Non-GAAP Operating Income 9.5% 7.8% 8.1% 7.9% 7
Slide 42: Global Customer Base
Internet Services Segment Domestic EC Other Internet Services Global Customer Base Global customer base of Rakuten services are steadily expanding (Rakuten Rewards) GMS Total Users* Registered Users Registered Users Registered Users Q3/24 (As of the end of Sep/24) (As of the end of Sep/24) (As of th
Slide 43: Rakuten Capital Investment Performance
Internet Services Segment Rakuten Capital Investment Performance *1 Domestic EC Other Internet Services (A f p’ )*2 (JPY bn) 288.8 Gain +140.1 77.9 Remaining (Unrealized) ROI +105% IRR +17% 148.7 210.9 Exit Amount (Realized) Initial Investment Remaining + Exited (2012~2024 Q3) *1: Investment Busines
Slide 44: Minority Investment Portfolio
Minority Investment Portfolio Remaining Exited*1 Non R-Capital*2 Number of *3 Investments : 48 42 2 Internet Ride Sharing Healthcare (Partial) (Affiliated Company) Sustainability Mobile / AI Other (Q4/24 Inv.) *1: Exit since 2015. Exit number does not include a partial exit. *2: Lyft and Rakuten Med
Slide 45: FinTech Segment
FinTech Segment
Slide 46: FinTech Segment Financial Results
FinTech Segment Financial Results*1*2*3*4*5 Non-GAAP Q3/24 (JPY bn) Revenue YoY Operating Income YoY Rakuten Card 85.2 +8.8% 16.5 +53.9% Rakuten Bank 41.5 +29.0% 17.1 +42.5% Rakuten Securities 33.7 +10.9% 9.3 +0.3% Insurance Business 20.5 -3.7% 0.1 -93.7% Rakuten Payment 23.1 +15.6% 1.4 +3.3 Others
Slide 47: FinTech Segment Revenue Breakdown
FinTech Segment Revenue Breakdown* (JPY bn) +12.8% YoY R k R k B k R k R k B y *Effective September 1, 2023, Rakuten Pay (online payment) business and Rakuten Points (online) business were transferred from the Internet Services segment (Domestic EC) to the FinTech segment. Retroactive revisions were
Slide 48: FinTech Segment Non-GAAP Operating Income Breakdown
FinTech Segment Non-GAAP Operating Income Breakdown*1*2 (JPY bn) +57.2% YoY R k R k B k R k R k B y *1: Effective September 1, 2023, Rakuten Pay (online payment) business and Rakuten Points (online) business were transferred from the Internet Services segment (Domestic EC) to the FinTech segment. Re
Slide 49: Rakuten Card Financial Results
FinTech Segment Card Bank Securities Insurance Payment Rakuten Card Financial Results Revenue grew due to increased fee income from expanded shopping and installments GTV Profit increased significantly due to top-line growth, increased operating leverage from optimized marketing, and maintaining low
Slide 50: Rakuten Card KPIs
FinTech Segment Card Bank Securities Insurance Payment Rakuten Card KPIs Steady growth due to an increase in shopping, installments GTV accompanying an expansion in the membership base and average customer spending. Shopping GTV exceeded JPY 6tn for the first time in a quarter Shopping GTV Target: J
Slide 51: Rakuten Bank Financial Results and KPIs
FinTech Segment Card Bank Securities Insurance Payment Rakuten Bank Financial Results and KPIs Revenue grew due to a large increase in interest income, reflecting a steady increase in assets under management and the Bankof Japan's policy interest rate hike Continued significant increase in operating
Slide 52: Rakuten Securities Financial Results and KPIs
FinTech Segment Card Bank Securities Insurance Payment Rakuten Securities Financial Results and KPIs Broke the record-high revenue recorded in previous quarter due to strong performance in various transactions, in line with continued expansion of the customer base Ongoing cost control was successful
Slide 53: Insurance Business Financial Results
FinTech Segment Card Bank Securities Insurance Payment Insurance Business Financial Results In Life Insurance, although revenue and operating income declined due to the impact of accounting process changes in Q3/23, face- to-face insurance sales are recovering In General Insurance, although claim pa
Slide 54: Rakuten Payment Financial Results
FinTech Segment Card Bank Securities Insurance Payment Rakuten Payment Financial Results * Revenue increase on GTV expansion, especially through Rakuten Pay and Rakuten Cash Operating profit expanded through continuous revenue growth while maintaining lean operational structure. Expecting sustained
Slide 55: Mobile Segment
Mobile Segment 55
Slide 56: Mobile Segment Financial Results
Mobile Segment Financial Results Non-GAAP Q3/24 (JPY bn) Revenue QoQ QoQ Operating Income Rakuten Mobile 72.5 +6.9% -50.6 +2.1 MNO 43.2 +7.6% *2 MVNO 1.8 -12.4% Device Revenue 13.1 +1.1% Other Revenue 14.5 +13.7% (including Rakuten Hikari, etc.) Rakuten Symphony 15.0 +27.3% Rakuten Energy 12.3 +30.4
Slide 57: Mobile Segment Revenue Breakdown
Mobile Segment Revenue Breakdown (JPY bn) +11.6% QoQ Increased due to higher demand resulting from high temperatures R k R k R k y p y y
Slide 58: Mobile Segment Non-GAAP Operating Income/Loss Breakdown
Mobile Segment Non-GAAP Operating Income/Loss Breakdown* (JPY bn) Q3/23 Q4/23 Q1/24 Q2/24 Rakuten Mobile Others Q3/24 Rakuten Energy: Although revenue increased due to seasonal demand increase, profit fell QoQ due to sales promotion boost to acquire contracts JPY +5.2 bn QoQ *From Q3/24, Mobile Ecos
Slide 59: Rakuten Mobile, Inc. Quarterly Financial Results
Mobile Segment Rakuten Mobile Rakuten Symphony Rakuten Mobile, Inc. Quarterly Financial Results Revenue Non-GAAP Operating Income EBITDA (JPY bn) (JPY bn) (JPY bn) Q1/23 Q3/23 Q1/24 Q3/24 Q1/23 Q3/23 Q1/24 Q3/24 73 -13 -10 68 -24 -20 62 15 -38 -34 58 59 13 -7 56 -53 -51 -51 52 10 -62 -60 10 9 13 -71
Slide 60: Rakuten Mobile, Inc. Operating Cost and Capital Expenditure
Mobile Segment Rakuten Mobile Rakuten Symphony Rakuten Mobile, Inc. Operating Cost and Capital Expenditure Maintaining operating expenses (excluding depreciation and amortization) at optimized levels through the completion of network capex. Going forward, continuing to work on cost optimization Netw
Slide 61: Rakuten Mobile MNO Subscribers (B2C+B2B)
Mobile Segment Rakuten Mobile Rakuten Symphony Rakuten Mobile MNO Subscribers (B2C+B2B) * B2C led the net adds due to strong acquisition via the ecosystem and contributions from various programs such as Saikyo Senior Program (mm lines) 7.21 6.88 6.33 5.90 5.10 4.91 4.76 4.77 4.53 4.46 4.56 Q1/22 Q2/
Slide 62: Rakuten Mobile MNO Churn (B2C+B2B)
Mobile Segment Rakuten Mobile Rakuten Symphony Rakuten Mobile MNO Churn (B2C+B2B) *1 Although the churn rate increased due to the cancellation of lines after reviewing contracts with some agents and reevaluation of transactions in B2B, the adjusted MNO churn rate after taking these factors into acco
Slide 63: ARPU
Mobile Segment Rakuten Mobile Rakuten Symphony ARPU *1 Growth mainly in data ARPU on increased 5G traffic and acquisition of main line users with higher data usage From Q3/24, Ecosystem ARPU*2, which reflects additional revenue from group services driven by Rakuten Mobile subscribers, is included in
Slide 64: Data ARPU
Mobile Segment Rakuten Mobile Rakuten Symphony Data ARPU Compared monthly average data usage of B2C users that activated their lines from Jan-Jun 2024 vs. all B2C users Since 2024, acquisition of main line users with higher data usage has increased and is expected to further contribute to ARPU growt
Slide 65: Plan to Increase ARPU
Mobile Segment Rakuten Mobile Rakuten Symphony Plan to Increase ARPU ◼ Promoting high-value-added options such as the Saikyo Senior Pack. As subscribers grow, referrals from Rakuten Link to group services are also expanding; strengthening promotion and monetization of ad space Priority Measures Spec
Slide 66: Review of ARPU Definition
Mobile Segment Rakuten Mobile Rakuten Symphony Review of ARPU Definition Net ARPU x MNO Subscribers*1 should be compared to EBITDA cost to analyze EBITDA breakeven In addition to Data, Calls, Options and Others, revenue uplift effect of Rakuten Mobile ARPU MNO subscribers is now added to the calcula
Slide 67: Rakuten Mobile MNO Average Data Volume (B2C)
Mobile Segment Rakuten Mobile Rakuten Symphony Rakuten Mobile MNO Average Data Volume (B2C) Steady increase in average data usage volume due to expansion of areas connected to 5G and increase in the ratio of applications via MNP Averaged data consumption volume per day (GB) Rakuten UN-LIMIT VII Raku
Slide 68: Corporate Business: Partnership with Science Arts to Promote Solution Services
Mobile Segment Rakuten Mobile Rakuten Symphony Corporate Business: Partnership with Science Arts to Promote Solution Services Signed a capital and business alliance with Science Arts, Inc. in Oct 2024 to strengthen synergies/collaboration xp f “R k Buddycom ” k ,p X p ff y Promoting DX and operation
Slide 69: Rakuten Mobile Owned and Roaming Frequency Bands
Mobile Segment Rakuten Mobile Rakuten Symphony Rakuten Mobile Owned and Roaming Frequency Bands Spectrum Status Bandwidth 40MHz 1.7GHz Allocated Up: 1,730 – 1,750MHz Down: 1,825 - 1,845MHz Allocated in October 2023 6MHz Radio wave testing started in April 2024 700MHz Up: 715 - 718MHz 4G Scheduled to
Slide 70: Rakuten Symphony Revenue
Mobile Segment Rakuten Mobile Rakuten Symphony Rakuten Symphony Revenue ◼ Deliveries continued to progress for existing global customers but with more focus on anchor clients ◼ Revenue tends to be volatile due to timing of deliveries to clients etc. (USD mm) 231 Started full-fledged 161 delivery for
Slide 71: Rakuten Symphony: Open RAN Licensing Program
Rakuten Symphony: Open RAN Licensing Program With an open community subscription model, Rakuten Symphony gives commercial access to its Open RAN CU and DU* software, which has already been widely deployed in Japan and Germany High-touch / Direct sales • RAN license Partners Rakuten • Tech support Sy
Slide 72: Ad Business
Ad Business 72
Slide 73: Ad Business Financial Results
Ad Business*1 Financial Results Revenue*2 (JPY bn) Initiatives for Further Growth Ad Business Revenue Ratio to Expanding Ad Business with AI Solutions Consolidated Revenue (Launched Nov 7) 9.8% 9.4% +4.3% 51.0 53.2 A “ ” • AI performs a multi-faceted analysis of Rakuten Group’s transaction data, ide
Slide 74: 4. Finance
4. Finance 74
Slide 75: Cash Conversion Cycle Improvements
Cash Conversion Cycle Improvements ◼ Continuing efforts to optimize working capital to reduce leverage ◼ FY24 target of JPY 50bn cash generation from non-FinTech businesses achieved earlier than planned, reaching approx. JPY 97bn as of the end of September FY 2024 Cash generation target Further upsi
Slide 76: Diversifying Financing Sources including Equity, Asset Financing and Bonds
Diversifying Financing Sources including Equity, Asset Financing and Bonds 2019 2020 2021 2022 2023 2024 Public offering and Strengthening of Strategic Transaction Third-party allotments involving Rakuten Securities Strategic Transaction JPY 296 bn JPY 87 bn Third-party allotments Involving Rakuten
Slide 77: Rakuten Mobile Funding Flow
Rakuten Mobile Funding Flow Dividends, management fees, FinTech etc. Rakuten Mobile, Inc. FY2023: Companies JPY 65.7 bn raised JPY 170 bn through lease financing in Q3/24 Independently regulated and funded Equity/Loan Rakuten Group, Inc. Dividends, Rakuten Mobile, Inc. management fees, FCF from Inte
Slide 78: Sale and Leaseback Scheme
Sale and Leaseback Scheme Rakuten Mobile raised JPY 170 bn through sale and leaseback of telecom equipment owned by the company Treated as a financial transaction under IFRS/JGAAP accounting, therefore fixed assets sold to SPC will continue to be recognized Infrastructure Funds Rakuten Mobile, Inc.
Slide 79: Sale and Leaseback Accounting Treatment
Sale and Leaseback Accounting Treatment Rakuten Mobile raised JPY 170 bn through sale and leaseback of telecom equipment owned by the company Treated as a financial transaction under IFRS/JGAAP accounting, therefore fixed assets sold to SPC will continue to be recognized Rakuten Group, Inc. - Consol
Slide 80: 5. ESG
5. ESG 80
Slide 81: SBTi Validation for Emission Reduction Targets
SBTi Validation for Emission Reduction Targets R k p’ ( H ) y initiative SBTi (Science Based Targets initiative)* as science-based targets in line with the Paris Agreement R k p’ reenhouse gas emission reduction targets Metrics Targets Direct greenhouse gas Scope 1 emissions from the emissions compa
Slide 82: Forward-looking statements disclaimer
This presentation includes forward-looking statements that reflect management’s current assumptions and expectations of future events, and accordingly, they are inherently susceptible to uncertainties and changes in circumstances and are not guarantees of future performance. Actual results may diffe