Ly Corporation · TSE:4689
Ly — Yahoo Japan — Q1 FY2015 Earnings Presentation
62 slides from Ly's earnings presentation, Jul 30, 2015
Slide 1: FY2015-1Q Business Results
Yahoo Japan Corporation FY2015-1Q Business Results (April - June 2015) July 30, 2015
Slide 2: Table of Contents
Table of Contents P. 4 FY2015-1Q Financial Highlights P. 15 Key Performance Indicators P. 23 Core Businesses (Advertising/Auctions/Membership Services) P. 35 Investment-Stage Businesses (Shopping/Credit Card) P. 47 Business Results Supplemental Information Yahoo Japan Corporation adopted Internation
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: FY2015-1Q Financial Highlights
FY2015-1Q Financial Highlights 4
Slide 5: Executive Summary for FY2015-1Q
Executive Summary for FY2015-1Q Revenue 1,105 (¥100M) YoY +10.6% Operating income 491 (¥100M) YoY +0.8% Net income attributable to owners of the parent 333 (¥100M) YoY -8.3% Diluted EPS ¥5.86 YoY -8.3% Advertising-related revenue 633 (¥100M) YoY +9.5% Via smartphones 38.3% Paid search advertising 36
Slide 6: Executive Summary for FY2015-1Q
Executive Summary for FY2015-1Q Transition in Usage from PC to Smartphones -Number of total monthly page views via smartphones exceeded PCs for the first time in May. (Via-smartphone ratio: 50.2%) Advertising-Related Business -Smartphone version of Yahoo! JAPAN startup page fully converted to timeli
Slide 7: Monthly Page Views via Smartphones
Monthly Page Views via Smartphones PC + others * Smartphones Ratio of page views via 80% smartphones exceeded 50% for the first time in 60% May 2015. 40% 50.2% 40.4% 20% 25.9% 0% May 2013 2013年 May 2014 2014年 May 2015 2015年 5月 5月 5月 7 * Access rate via PCs, tablets and feature phones.
Slide 8: Number of Total Monthly Page Views
Number of Total Monthly Page Views (100M) PC + others * Smartphones Steady growth associated with the expansion of smartphone usage 500 0 May 2013 2013年 May 2014 2014年 May 2015 2015年 5月 5月 5月 8 * Includes PCs, tablets and feature phones.
Slide 9: Revenue
Revenue 1,500 (¥100M) 1,105 (¥100M) YoY +10.6% 1,000 999 500 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q JGAAP IFRS Gross basis Net basis Note: Between FY2008 and FY2012, we indicated revenue on a net rather than gross basis, by
Slide 10: Operating Income
Operating Income (¥100M) 491 (¥100M) YoY +0.8% 500 487 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q JGAAP IFRS 10
Slide 11: Net Income Attributable to the Owners of the Parent
Net Income Attributable to the Owners of the Parent (¥100M) 333 (¥100M) 500 YoY -8.3% 364 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q JGAAP IFRS 11
Slide 12: Net Income after Adjustment of One-time Gains
Net Income Attributable to the Owners of the Parent after the Adjustment of One-time Gains After the adjustment of 2014-1Q’s one-time gains of ¥8.7 billion YoY +20.6% (¥100M) -Non-operating income* due to incremental 87 realization of re- evaluation profits from the shares of The Japan Net Bank, Lim
Slide 13: Quarterly Revenue Breakdown
Quarterly Revenue Breakdown (¥100M) 1,105 Marketing Solutions Business 999 YoY +11.4% Display advertising revenue grew. 701 629 +71 Consumer Business YoY +0.8% Auctions-related revenue increased. 286 +2 289 Other Businesses 107 +36 143 YoY +33.6% FY2014 FY2015 Consolidation of YJ Card Corporation 1Q
Slide 14: Quarterly Margin
Quarterly Margin The profitability of existing businesses is maintained although margins are negatively influenced by consolidation of subsidiaries and by upfront investments. Operating margin 50% 44.5% Ratio of net income attributable to owners of the parent 30.2% 0% FY2002 2003 2004 2005 2006 2007
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: DUB (Daily Unique Browsers)
DUB (Daily Unique Browsers) PC + others*1 Smartphones*2 (10 thousand) (Quarterly average) Smartphone DUB is 4,923 Approx. continuously 3,604 4,592 60% increasing YoY +36.6% QoQ +7.2% FY2014 FY2015 1Q 2Q 3Q 4Q 1Q *1 Includes PCs, tablets and feature phones. *2 Includes accesses to Yahoo! JAPAN via ap
Slide 18: Number of Monthly Active User IDs
Number of Monthly Active User IDs (Quarterly average) (10 thousand) Exceeded 30 million IDs for the first time since the start of 2,785 2,953 3,007 offering services (May 2015) FY2014 FY2015 1Q 2Q 3Q 4Q 1Q 18 Note: Number of Yahoo! JAPAN IDs logged-in in each month.
Slide 19: Rankings of Smart Devices Applications Offered by Yahoo! JAPAN
Rankings of Smart Devices Applications Offered by Yahoo! JAPAN Free-of-charge applications which offer services that are deeply-rooted in the daily-lives of users achieved high ranks in iOS and Android (As of July 15, 2015). Applications for iOS, by categories Applications for Android, by categories
Slide 20: Total Domestic e-Commerce Transaction Value
Total Domestic e-Commerce Transaction Value (¥100M) Shopping-related *1 Auction-related *2 -Growth of shopping- related transaction value 3,051 3,110 2,795 accelerated. -Auction-related 2,090 2,088 1,952 transaction value also increased steadily. Total domestic e-Commerce 842 961 1,022 transaction v
Slide 21: Quarterly Total Domestic e-Commerce Transaction Value YoY Growth Trend
Quarterly Total Domestic e-Commerce Transaction Value YoY Growth Trend Special demand before tax hike Auction-related Shopping-related +21.3% 20% Shopping-related Auction-related 10% +6.9% 0% New e-commerce Affected by special demand before strategies introduction tax hike in the previous year FY201
Slide 22: Our Primary Revenue Sources
Our Primary Revenue Sources Core businesses Investment-stage businesses Advertising Shopping Auctions Credit card Membership services 22
Slide 23: Core Businesses
Core Businesses Advertising Auctions Membership Services 23
Slide 24: Quarterly Advertising-Related Revenue
Quarterly Advertising-Related Revenue Display Paid search PaidDisplay search (¥100M) YoY 578 633 +9.5% 209 271 Growth in display +29.5% advertising 368 362 Revenue of YDN distributed as in- -1.8% feed advertising was favorable. FY2014 FY2015 1Q 1Q 24
Slide 25: Quarterly Advertising-Related Revenue YoY Growth Trend
Quarterly Advertising-Related Revenue YoY Growth Trend 40% Display Paid search Display advertising +29.5% 30% +21.0% +19.7% +19.2% +18.2% 20% 10% +3.4% +1.7% +0.6% -2.1% 0% -1.8% FY2013 FY2014 FY2015 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q -10% 25
Slide 26: Quarterly Advertising-related Revenue via Smartphones
Quarterly Advertising-related Revenue via Smartphones ・Smartphone advertising revenue ratio expanded to 38.3%. ・Smartphone advertising revenue: ¥24.2billion (YoY +37.8%) (¥100M) Smartphones Other devices Via-smartphone ratio 750 (left axis) (left axis) (right axis) 40% 30% 500 390 20% 250 10% 242 0
Slide 27: Yahoo! JAPAN Startup Page for Smartphones in Timeline-View
Trend after Launching Yahoo! JAPAN Startup Page for Smartphones in Timeline-View Personalized contents Improvement in services Improvement in profitability Advertising -Conversion completed for both -Major KPIs such as number of applications and browsers into timeline- clicks trending favorably. vie
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 Launched Yahoo! JAPAN startup page in FY2015 timeline-view Yahoo! Premium DSP revenue expanding FY2014 Smartphone advertising revenue jumped
Slide 29: Core Businesses
Core Businesses Advertising Auctions Membership Services 29
Slide 30: Auction-related Transaction Value and Revenue
Auction-related Transaction Value and Revenue YoY Changes in Quarterly transaction value *1 transaction value and revenue *2 YoY change: transaction value (¥100M) FY2013 FY2014 FY2015 YoY change: revenue Growing steadily 2,000 +6.9% 1,000 0％ FY2014 FY2015 1Q 2Q 3Q 4Q 1Q 0 1Q 2Q 3Q 4Q *1 Includes tra
Slide 31: Measures to Expand Auction-Related Market
Measures to Expand Auction-Related Market Cooperative efforts with partner companies and affiliates to promote usage of EC in reuse market. Secondhand real estate Reuse market size estimation Sony Real Estate*4 + Secondhand Yahoo! Real Estate, YAHUOKU! Used goods *1 real estate *3 Approx. ¥1.5 trill
Slide 32: Core Businesses
Core Businesses Advertising Auctions Membership Services 32
Slide 33: Number of Monthly Paid-Membership IDs
Number of Monthly Paid-Membership IDs Monthly paid-membership IDs including Yahoo! Premium members was 15.54 million IDs. *At quarter-ends (Million) 14.40 15.54 14.16 FY2013 FY2014 FY2015 1Q 1Q 1Q Note: Number of monthly paid-membership IDs is the total of membership IDs of Yahoo! Premium members, Y
Slide 34: Measures to Expand Membership
Measures to Expand Membership Diversified Provision of attractive distribution channels content and services Link with Yahoo! Point-reward measures Entertainment- Platinum for Yahoo! Premium JAPAN services Pack Protection Members Tie-up with ＋ SoftBank Tie-up with Yahoo! BB Link with native applicat
Slide 35: Investment-Stage Businesses
Investment-Stage Businesses Shopping Credit Card 35
Slide 36: Key Indicators at June 2015 End
Key Indicators at June 2015 End Number of store IDs *1 Monthly YoY Other Key indicators 130 thousand → 310 thousand 2.4 times also continued to Number of items listed improve (Compared with same quarter last year) Monthly YoY 110 million → 170 million +47% -Conversion rate of buyers to site visitors
Slide 37: Shopping Transaction Value (Yahoo! Shopping + LOHACO)
Shopping Transaction Value (Yahoo! Shopping + LOHACO) Quarterly transaction value Quarterly YoY changes (100M) FY2013 FY2014 FY2015 30% Growth accelerated Special demand before tax hike +23.1% 20% 500 10% 0% 0 FY2013 FY2014 FY2015 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q -10% 37 Note: Includes transac
Slide 38: Progress after the New Strategy Implementation
Progress after the New Strategy Implementation The new strategy is leading to increase in number of buyers and transaction value. More Tougher products competition Improved price New strategy competitiveness and quality implemented in Oct. 2013 More Advertising Attractive platform sellers -related f
Slide 39: Adding Value in using Yahoo! JAPAN Services
Adding Value in using Yahoo! JAPAN Services to Cater to the Users’ Needs Yahoo! Premium members YJ Card holders SoftBank Subscribers Offering convenience and benefits such as T-POINT Yahoo! Shopping 39
Slide 40: Values Provided to Premium Members
Values Provided to Premium Members Offered preferential services to “blue chip” users -Targeted “blue chip” users with high average spending -Improved repeat purchase rate -Efficient sales promotion investment 40
Slide 41: Values Provided to SoftBank Subscribers
Values Provided to SoftBank Subscribers Takes only 10 seconds to make Aiming to offer purchase on Yahoo! Shopping more convenient via SoftBank smartphones* 10 and easier mobile Yahoo! Shopping seconds e-commerce Purchase -No information input required 10 Common EC services minutes -Easy to log-in -N
Slide 42: New Cooperative Effort with Stores in Yahoo! Shopping
New Cooperative Effort with Stores in Yahoo! Shopping In collabration with Alibaba Group, we will support stores of Yahoo! Shopping in cross- boarder EC trading. A promotional page introducing Alibaba Tmall 42
Slide 43: Investment-Stage Businesses
Investment-Stage Businesses Shopping Credit Card 43
Slide 44: Progress in Credit Card Business
Progress in Credit Card Business Number of valid card holders exceeded 1 million. 1.4 – 1.6 million (plan) 1 million 0.6 million FY2014 FY2015 FY2015 4Q 1Q 4Q 44 Note: Number of valid card holders is based on actual number or estimation at each quarter end, and includes card holders of Yahoo! JAPAN
Slide 45: Policy for Acquiring New Card Holders
Policy for Acquiring New Card Holders Will acquire new card holders with marketing efforts focused on e-commerce users and Yahoo! Premium members, while emphasizing the rate of active users. 45
Slide 46: Pillars of Future Growth
Aims to continuously strengthen the competitiveness of advertising, e-commerce, and financial and payment services – the pillars of future growth. 46 46
Slide 47: Business Results Supplemental Information
Business Results Supplemental Information P. 48 FY2015-1Q Business Results P. 57 Business Data P. 59 Organization, Personnel and Affiliated Companies 47
Slide 48: FY2015-1Q Statements of Income
FY2015-1Q Statements of Income Increase/ 2014/1Q 2015/1Q Change decrease Revenue (¥100M) 999 1,105 106 10.6% Cost of Sales (¥100M) 195 241 45 23.5% Gross Profit (¥100M) 803 864 60 7.5% SG&A and others (¥100M) 316 372 56 17.8% Operating Income (¥100M) 487 491 3 0.8% Other Non-operating Income and Exp
Slide 49: FY2015-1Q Operating Expenses
FY2015-1Q Operating Expenses Composition QoQ YoY 14/1Q 14/4Q 15/1Q Ratio Major Factors for YoY Changes (¥100M) Change Change Increase due to changes in the terms of agreements Cost of Sales 195 234 241 39.3% 3.2% 23.5% related to search system usage Toal SG&A and others 316 418 372 60.7% -10.9% 17.8
Slide 50: FY2015-1Q Statements of Financial Position
FY2015-1Q Statements of Financial Position Increase/ Increase/ 2015/3/31 2015/6/30 2015/3/31 2015/6/30 (¥100M) decrease decrease <Assets> <Liabilities> Current Assets 7,418 7,022 -395 Current Liabilities 2,397 2,229 -168 Cash and Cash Equivalents 5,039 4,579 -459 *1 *2 Trade and Other Payables 1,589
Slide 51: FY2015-1Q Statements of Cash Flows
FY2015-1Q Statements of Cash Flows Major ItemsMajor Items FY2015-1Q (¥100M) Increase/decrease Operating Activities 137 Income before Income Taxes 505 Operating 137 Activities Depreciation and Amortization 55 Increase/Decrease in Trade and Other Receivables/Payables 63 Increase/Decrease in Other Curr
Slide 52: 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 53: FY2015-1Q Highlights – Marketing Solutions Business
FY2015-1Q Highlights – Marketing Solutions Business ■ Paid Search Advertising [Sponsored Search] - Increase in the use of search services on smartphones led to the increase in smartphone-related revenue year on year. On the other hand, PC-related revenue decreased compared with the same quarter last
Slide 54: FY2015-1Q Highlights – Consumer Business
FY2015-1Q Highlights – Consumer Business ■ Auction-related - Along with the continuing steady increase of auction-related transaction value, revenue of YAHUOKU! increased year on year. In particular, smartphone-related transaction value grew. ■ Shopping-related - In Yahoo! Shopping, along with enhan
Slide 55: Advertising Products
Advertising Products Main Main Fee Placement Advertising Products Advertiser Format Calculation Pages Base Paid Search Search results “Sponsored Search” Text Major Advertising pages Per-click rate corporations (Performance-based) *1 Small and Text medium-sized “Yahoo! Display Ad companies Network (Y
Slide 56: Revenue Trends by Advertising Products
Revenue Trends by Advertising Products (¥ 100M) 578 605 621 693 633 Total Advertising Revenue 296 248 271 223 209 181 114 131 147 184 500 92 101 114 Display 95 87 YDN and Others Premium Paid Search 368 382 372 397 362 0 '14/4-6 7-9 10-12 '15/1-3 4-6 56
Slide 57: Quarterly Business Data (1)
Quarterly Business Data (1) YoY Indicator (Quarterly average) Unit 2014/1Q 2014/2Q 2014/3Q 2014/4Q 2015/1Q Change Number of total monthly page views millions 59,468 62,483 60,561 61,969 64,990 9.3% Number of total monthly smartphone page views *1 millions 23,788 26,903 27,320 29,454 31,930 34.2% Num
Slide 58: Quarterly Business Data (2)
Quarterly Business Data (2) YoY Indicator (Quarterly total) Unit 2014/1Q 2014/2Q 2014/3Q 2014/4Q 2015/1Q Change 100 Auction-related transaction value *1 *4 millions 1,952 1,920 2,217 2,090 2,088 6.9% of yen 100 Shopping-related transaction value *2 *4 millions 842 895 1,028 961 1,022 21.3% of yen 10
Slide 59: Organization Chart of Yahoo Japan Corporation
Organization Chart of Yahoo Japan Corporation President & As of July 1, 2015 Representative Director / CEO SEVPCO / COO SEVPCO / CFO Board of Directors Media Company System Management Audit and Supervisory CEO Office Committee (803) Group (927) Marketing Solutions Data & Science People Development S
Slide 60: Number of Directors and Employees
Number of Directors and Employees (at the End of Quarter) (Number of People) 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 12/6 12/9 12/12 13/3 13/6 13/9 13/12 14/3 14/6 14/9 14/12 15/3 15/6 Directors and Auditors of 14 20 31 35 30 33 31 30 30 38 33 33 33 Subsidiaries Employees of 1,373 1,491 1,885 1,
Slide 61: Consolidated Subsidiaries and Associates
Consolidated Subsidiaries and Associates (as of June 30, 2015) Major consolidated subsidiaries at the end of FY2015-1Q Carview Corporation FirstServer, Inc. GYAO CORPORATION IDC Frontier Inc. Netrust, Ltd Synergy Marketing, Inc. ValueCommerce Co., Ltd. YJ Capital Inc. YJ Card Cor
Slide 62: Yahoo Japan Group IR information
Yahoo Japan Group IR information is available at : http://ir.yahoo.co.jp/en/ 62