Ly Corporation · TSE:4689
Ly — Yahoo Japan — FY2015 2Q Earnings Presentation
63 slides from Ly's earnings presentation, Oct 30, 2015
Slide 1: FY2015-2Q Business Results
Yahoo Japan Corporation FY2015-2Q Business Results (July - September 2015) October 30, 2015
Slide 2: Table of Contents
Table of Contents P. 4 FY2015-2Q Financial Highlights P. 15 Key Performance Indicators P. 24 Core Businesses (Advertising/Auctions/Membership Services) P. 33 Investment-Stage Businesses (Shopping/Credit Card) P. 44 In Pursuit of Further Growth P. 49 Business Results Supplemental Information Yahoo Ja
Slide 3: Forward-looking statements
Statements made at the meeting or included in the documents that are not historical facts are forward-looking statements about the future performance of Yahoo Japan Corporation and its consolidated subsidiaries and affiliates. The Company cautions you that a number of important factors could cause a
Slide 4: FY2015-2Q Financial Highlights
FY2015-2Q Financial Highlights 4
Slide 5: Executive Summary for FY2015-2Q
Executive Summary for FY2015-2Q Revenue 1,382 (¥100M) YoY +33.9% Operating income 1,027 (¥100M) YoY +123.2% Net income attributable to owners of the parent 913 (¥100M) YoY +202.5% Diluted EPS ¥16.05 YoY +202.6% Advertising-related revenue 657 (¥100M) YoY +8.6% Via smartphones 41.4% Paid search adver
Slide 6: Executive Summary for FY2015-2Q
Executive Summary for FY2015-2Q Advertising-Related Business -YDN and others continued to be a major growth driver in overall advertising, due to the predicted steady revenue from YDN distributed as in-feed advertising which was introduced in the previous quarter; and continued impact of functional
Slide 7: Growth rate of transaction value in shopping business surged YoY +30.2%
Growth rate of transaction value in shopping business surged YoY +30.2% +13.7% -1.6% FY2013 FY2014 FY2015 2Q 2Q 2Q Note: Transaction value of Yahoo! Shopping and LOHACO. 7 LOHACO’s transaction value is the revenue of LOHACO business, operated by ASKUL, from Jun. 21 to Sep. 20, after 2013.
Slide 8: Number of valid credit card holders already reached planned number
Number of valid credit card holders already reached planned number for FY2015. Planned number of valid card holders 1.4 at the end of FY2015 1.0 million (as of May 2015) was 0.6 million set at 1.4 - 1.6 million. million FY2014 FY2015 FY2015 4Q 1Q 2Q 8 Note: Number of valid card holders is the actual
Slide 9: Core Businesses grew smoothly, Investment-stage Businesses showed better-than-expected progress
Core Businesses grew smoothly, Investment-stage Businesses showed a better-than-expected progress. 9
Slide 10: Revenue
Revenue (¥100M) 1,500 1,382 (¥100M) YoY +33.9％ 1,000 1,033 500 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q JGAAP (Gross basis) JGAAP (Net basis) IFRS Note1: Revenue of ASKUL from Aug. 28 to Sep. 30, 2015 has been consolidated. N
Slide 11: Operating Income
Operating Income Includes “Gain From Remeasurement Relating to Business Combination” (¥100M) 1,027 (¥100M) YoY 2.2x (億円) 1,000 500 460 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q JGAAP IFRS Note1: Consolidated ASKUL’s income fro
Slide 12: Net Income Attributable to the Owners of the Parent
Net Income Attributable to the Owners of the Parent (¥100M) 913 (¥100M) YoY 3x 1,000 500 302 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q JGAAP IFRS Note1: Consolidated ASKUL’s income from Aug. 28 to Sep. 30, 2015. Note2: Due to
Slide 13: Quarterly Revenue Breakdown
Quarterly Revenue Breakdown (¥100M) 1,382 Marketing Solutions Business 151 +41 YoY +9.5％ 1,033 Display advertising revenue grew. Includes 109 534 ASKUL’s revenue* 285 +249 Consumer Business * YoY +87.6％ Consolidation of ASKUL Corporation 662 +63 725 Other Businesses YoY +37.9％ FY2014 FY2015 Consolid
Slide 14: Quarterly Margin
Quarterly Margin Margin rose temporarily due to gain from remeasurement relating to business combination from ASKUL’s consolidation. Operating margin 74.3％ 50% Ratio of net income attributable to owners of the parent 0% 66.1％ FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q
Slide 15: Key Performance Indicators
Key Performance Indicators 15
Slide 16: Past and Coming Three Years
Past and Coming Three Years The past 3 years The coming 3 years Expanding smartphone Expanded service usage via applications usage and enhanced profitability in ＋ Expanding total domestic smartphones e-commerce transaction value 16
Slide 17: Daily Unique Browsers
Daily Unique Browsers PC+その他 *1 *1 PC + others スマートフォン *2 *2 Smartphones (10 thousand) (Quarterly average) Smartphone DUB is 4,923 5,161 Approx. continuously 3,943 60% increasing YoY +30.9％ QoQ +4.8％ FY2014 FY2015 2Q 3Q 4Q 1Q 2Q *1 Includes PCs, tablets and feature phones. *2 Includes accesses to Ya
Slide 18: Number of Monthly Active User IDs
Number of Monthly Active User IDs (Quarterly average) (10 thousand) Continuously increasing after 3,094 2,829 3,007 achieving 30 million IDs in 1Q FY2014 FY2015 2Q 3Q 4Q 1Q 2Q 18 Note: Number of Yahoo! JAPAN IDs logged-in in each month.
Slide 19: Trend After Launching Yahoo! JAPAN Startup Page for Smartphones
Trend After Launching Yahoo! JAPAN Startup Page for Smartphones in Timeline-View Trend in number of daily users (monthly average)* In FY2015-2Q, number of users exceeded the level Launched before the conversion to Timeline-View timeline-view 0 FY2015 Apr. May Jun. Jul. Aug. Sep. 19 *Total number of
Slide 20: Usage Trend of Focused Smartphone Applications
Usage Trend of Focused Smartphone Applications Growth in number of application users * – April 2014 as the starting point (April 2014=100) 400 Continued growth Weather News resulting from 300 multiple effects, 200 e.g. functional improvement, 100 sales promotion, etc. 0 FY2014 FY2015 Apr. Sep. 20 *C
Slide 21: Total Domestic e-Commerce Transaction Value
Total Domestic e-Commerce Transaction Value Auction-related *1 Shopping-related *2 ASKUL *3 3,335 (¥100M) -Growth of shopping-related 2,815 163 transaction value accelerated 1,139 even further 895 +27.3％ -Auction-related transaction value also increased steadily 1,920 2,032 +5.8％ YoY +18.5％ FY2014 F
Slide 22: Quarterly Transaction Value of Shopping-related and Auction-related business
Quarterly Transaction Value of Shopping-related and Auction-related business YoY Growth Trend Shopping-related * Auction-related 30% +27.3％ Special demand before tax hike 20% 10% +5.8％ 0% New e-commerce Impact of special demand before strategies introduced tax hike in the previous year -10% FY2012 F
Slide 23: Our Primary Revenue Sources
Our Primary Revenue Sources Core businesses Investment-stage businesses Advertising Shopping Auctions Membership services Credit card 23
Slide 24: Core Businesses
Core Businesses Advertising Auctions Membership Services 24
Slide 25: Quarterly Advertising-Related Revenue
Quarterly Advertising-Related Revenue Display ディスプレイ広告 検索連動型広告 Paid search YoY +8.6％ (¥100M) 657 605 223 +32.8％ 296 Growth in display advertising 382 -5.4％ 361 YDN continues to be a major growth driver. FY2014 FY2015 2Q 2Q 25
Slide 26: Quarterly Advertising-Related Revenue YoY Growth Trend
Quarterly Advertising-Related Revenue YoY Growth Trend 40% Display advertising Display Paid search +32.8％ +29.5% 30% +21.0% +18.2% +19.2% 20% 10% +1.7% +0.6% 0% -2.1% -1.8% -5.4% -10% FY2013 FY2014 FY2015 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 26
Slide 27: Quarterly Advertising-Related Revenue via Smartphones
Quarterly Advertising-Related Revenue via Smartphones ・Smartphone advertising revenue ratio expanded to 41.4％. ・Smartphone advertising revenue: ¥27.2 billion (YoY +36.3％) (¥100M) 750 Smartphones (left axis) Other devices (left axis) Via-smartphone ratio (right axis) 40% 500 385 30% 20% 250 272 10% 0
Slide 28: History of Yahoo! JAPAN's Advertising Business
History of Yahoo! JAPAN’s Advertising Business Have been offering new Structural Changes in device mix advertising products continuously change and product mix Started offering In-feed Advertising FY2015 Yahoo! Premium DSP revenue expanding FY2014 Smartphone advertising revenue jumped up FY2013 YDN
Slide 29: Core Businesses
Core Businesses Advertising Auctions Membership Services 29
Slide 30: Auction-Related Transaction Value
Auction-Related Transaction Value Areas to focus on Continued mid-to long-term growth in the second half of FY2015 (¥100M) Expand 2,000 smartphone usage via applications Enhance both transaction 1,000 value and Increase revenue transactions of cars and real estate 0 FY2013 FY2015 2Q 2Q Note: Include
Slide 31: Core Businesses
Core Businesses Advertising Auctions Membership Services 31
Slide 32: Number of Monthly Paid-Membership IDs
Number of Monthly Paid-Membership IDs Monthly paid-membership IDs including Yahoo! Premium members was 15.99 million IDs. (Million) 14.67 15.99 14.41 FY2013 FY2014 FY2015 (At quarter-ends) 2Q 2Q 2Q Note: Number of monthly paid-membership IDs is the total of membership IDs of Yahoo! Premium members,
Slide 33: Investment-Stage Businesses
Investment-Stage Businesses Shopping Credit Card 33
Slide 34: Key Indicators at End of September 2015
Key Indicators at End of September 2015 Number of store IDs *1 Examples of openings of 190 → 340 Monthly YoY new stores in the first half thousand thousand +80％ of FY2015 Number of items listed Culture Convenience Club Co.,Ltd. Monthly YoY FUTAKOTAMAGAWA TSUTAYA 120 million → 180 million +49％ ELECTR
Slide 35: Shopping Transaction Value (Yahoo! Shopping + LOHACO)
Shopping Transaction Value (Yahoo! Shopping + LOHACO) Quarterly transaction value Quarterly YoY changes (¥100M) FY2013 FY2014 FY2015 30% +30.2％ Further acceleration in growth 20% 500 10% 0% FY2013 FY2014 FY2015 0 -10% 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 1Q 2Q 3Q 4Q Note: Includes transaction value of Yahoo!
Slide 36: Outcome of the New Strategy
Outcome of the New Strategy 2 years have passed since the implementation of the new strategy, and the increase in transaction value has the momentum of exceeding the market growth rate. New strategy More Tougher Improved price competitiveness and quality implemented in products competition Oct. 2013
Slide 37: Indicators Contributing to the Increase in Transaction Value
Indicators Contributing to the Increase in Transaction Value Number of Continued new buyers usage rate Transaction value＝ Number of unique buyers × Annual spending per customer Increase in continued usage rate Increase in new buyers 37
Slide 38: Synergies across All e-Commerce-Related Businesses
Synergies across All e-Commerce-Related Businesses Expansion of related Expansion of shopping business businesses Credit card business Attract Purchase Improve purchase users conversion rate (Shopping cart) Membership services 38
Slide 39: Shopping Business and Credit Card Business
Shopping Business Credit Card Business Shopping cart in Yahoo! Shopping Promotional page for Yahoo! JAPAN Card 39 Note: As of Oct. 30, 2015.
Slide 40: Shopping Business and Membership Service Business
Shopping Business Membership Service Business Shopping cart in Yahoo! Shopping Encourage users to apply for Yahoo! Premium membership upon purchase. 40 Note: As of Oct. 30, 2015.
Slide 41: Investment-Stage Businesses
Investment-Stage Businesses Shopping Credit Card 41
Slide 42: Progress in Credit Card Business
Progress in Credit Card Business Number of valid card holders reached 1.4 million. 1.4 – 1.6 million (Planned value as of May 2015) 1.4 million 1.0 0.6 million million FY2014 FY2015 FY2015 FY2015 4Q 1Q 2Q 4Q 42 Note: Number of valid card holders is the actual number and the planned value at each qua
Slide 43: Trends in Card Transaction Value
Trends in Card Transaction Value Transaction value (*) grew by +71.0% QoQ, due to the acquisition of new card holders with a focus on the rate of active users. (¥100M) 400 200 0 FY2014 FY2015 1Q 2Q 3Q 4Q 1Q 2Q 43 *Excludes cash advance service. Consolidation of YJ Card Corporation
Slide 44: In Pursuit of Further Growth
In Pursuit of Further Growth 44
Slide 45: Sales Promotions in the 2nd Half of FY2015
Sales Promotions in the 2nd Half of FY2015 ・Enhance sales promotional activities in the latter half of the fiscal year to accelerate revenue growth in and after FY2016. ・Sales promotion-related costs (*) are projected to increase by ¥20 billion YoY. (¥100M) FY2014 FY2015 Approx. 300 (Planned value a
Slide 46: Increase in mid- and long-term revenue and income
Increase in mid- and long-term revenue and income Stronger media power Media (Advertising) • Promote service usage via smartphones • Continuously increase number of application users Larger domestic transaction value e- • Shopping business Commerce Aim to increase transaction value in the 2nd half o
Slide 47: Promote cross use of e-Commerce/Payment/Membership services
Promote the cross use of e-Commerce/Payment/Membership services to Yahoo! JAPAN users e-Commerce-related Yahoo! JAPAN’s media-related services Premium membership Financial and Payment-related (Concept image) 47
Slide 48: Strengthen competitiveness of pillars of future growth
Aim to continuously strengthen the competitiveness of advertising, e-commerce, and financial and payment services – the pillars of future growth. Aggressive Management Strengthening of Defense ・Strengthen corporate governance ・Enhance compliance ・Reduce risks in security issues, etc. 48
Slide 49: Business Results Supplemental Information
Business Results Supplemental Information P. 50 FY2015-2Q Business Results P. 58 Business Data P. 60 Organization, Personnel and Affiliated Companies 49
Slide 50: FY2015-2Q Statements of Income
FY2015-2Q Statements of Income Increase/ 14/2Q 15/2Q Change Decrease Revenue (¥100M) 1,033 1,382 349 +33.9% Cost of Sales (¥100M) 207 433 225 +108.7% Gross Profit (¥100M) 825 949 123 +15.0% SG&A and others (¥100M) 364 518 153 +42.0% Gain from Remeasurement Relating to Business - 596 596 n.a. Combina
Slide 51: FY2015-2Q Operating Expenses
FY2015-2Q Operating Expenses QoQ YoY 14/2Q 15/1Q 15/2Q Major Factors for YoY Changes (¥100M) Change Change Consolidation of ASKUL Corporation. Increase due to changes Cost of Sales 207 241 433 +79.6% +108.7% in the terms of agreements related to search system usage. Total SG&A 364 372 518 +39.0% +42
Slide 52: FY2015-2Q Statements of Financial Position
FY2015-2Q Statements of Financial Position (¥100M) Increase/ Increase/ 2015/3/31 2015/9/30 2015/3/31 2015/9/30 decrease decrease <Assets> <Liabilities> Current Assets 7,418 8,253 835 Current Liabilities 2,397 3,145 747 Cash and Cash Equivalents 5,039 5,218 178 *1 *2 Trade and Other Payables 1,589 2,
Slide 53: FY2015-2Q Statements of Cash Flows
FY2015-2Q Statements of Cash Flows Major ItemsMajor Items 15/2Q (¥100M) Operating Activities 470 Income before Income Taxes 1,048 Depreciation and Amortization 65 Gain from Remeasurement Relating to Business Combination -596 Consolidation of ASKUL Corporation Increase/Decrease in Trade and Other Rec
Slide 54: FY2015 1H Investment Records
FY2015 1H Investment Records Total amount of investments : approx. 6.3 billion yen Major investments Ratio of Companies Date voting rights Skyscanner Japan K.K. July 2015 49.0% Dynatech inc. July 2015 100.0% Sony Real Estate Corporation July 2015 43.7% BuzzFeed Japan Corporation Aug. 2015 49.0% Note
Slide 55: Business Segment Breakdown
Business Segment Breakdown Marketing Solutions Business ・Advertising: Paid search advertising “Sponsored Search” Display advertising (“Yahoo! Display Ad Network (YDN)”, “Premium Advertising”) ・Business Services: Affiliate-related services, CRM-related services, Recruiting-related services and others
Slide 56: Advertising Products
Advertising Products Main Main Fee Placement Advertising Products Advertiser Format Calculation Pages Base Paid search Search results advertising Sponsored Search® Text pages Major Per-click rate corporations (Performance-based) *1 Small and Text medium-sized Yahoo! Display Ad companies Network (YDN
Slide 57: Revenue Trends by Advertising Products
Revenue Trends by Advertising Products 14/2Q 14/3Q 14/4Q 15/1Q 15/2Q Indicator Unit (Jul.-Sep.) (Oct.-Dec.) (Jan.-Mar.) (Apr.-Jun.) (Jul.-Sep.) 100 Total advertising revenue million yen 605 621 693 633 657 YoY Change % +7.2% +5.4% +8.4% +9.5% +8.6% 100 Paid search advertising revenue million yen 382
Slide 58: Quarterly Business Data (1)
Quarterly Business Data (1) 14/2Q 14/3Q 14/4Q 15/1Q 15/2Q YoY Indicator (Quarterly average) Unit (Jul.-Sep.) (Oct.-Dec.) (Jan.-Mar.) (Apr.-Jun.) (Jul.-Sep.) Change Number of total monthly page views millions 62,483 60,561 61,969 64,990 68,102 +9.0% Number of total monthly smartphone page views *1 mi
Slide 59: Quarterly Business Data (2)
Quarterly Business Data (2) 14/2Q 14/3Q 14/4Q 15/1Q 15/2Q YoY Indicator (Quarterly total) Unit (Jul.-Sep.) (Oct.-Dec.) (Jan.-Mar.) (Apr.-Jun.) (Jul.-Sep.) Change 100 Auction-related transaction value *1 million yen 1,920 2,217 2,090 2,088 2,032 +5.8% 100 Shopping-related transaction value *2 million
Slide 60: Organization Chart of Yahoo Japan Corporation
Organization Chart of Yahoo Japan Corporation President & As of October 1, 2015 Representative Director / CEO SEVPCO / COO SEVPCO / CFO Board of Directors Media Company System Management Audit and Supervisory CEO Office Committee (894) Group (829) Marketing Solutions Data & Science People Developmen
Slide 61: Number of Directors and Employees
Number of Directors and Employees (at the End of Quarter) (Number of People) 9,000 6,000 3,000 0 12/9 12/12 13/3 13/6 13/9 13/12 14/3 14/6 14/9 14/12 15/3 15/6 15/9 Directors and Auditors of 20 31 35 30 33 31 30 30 38 33 33 33 61 Subsidiaries Employees of 1,491 1,885 1,938 1,620 1,660 1,658 1,684 1,
Slide 62: Consolidated Subsidiaries and Associates
Consolidated Subsidiaries and Associates (as of September 30, 2015) Major consolidated subsidiaries ASKUL Corporation Carview Corporation Dynatech inc. ecohai Co.,Ltd. FirstServer, Inc. GYAO CORPORATION IDC Frontier Inc. Netrust, Ltd Synergy Marketing, Inc. ValueCommerce Co., L
Slide 63: YAHOO! JAPAN
YAHOO! JAPAN