Ly Corporation · TSE:4689
Ly — Yahoo Japan — Q3 FY2016 Earnings Presentation
59 slides from Ly's earnings presentation, Feb 3, 2017
Slide 1: FY2016-3Q Business Results
Yahoo Japan Corporation FY2016-3Q Business Results (October - December 2016) February 3, 2017
Slide 2: Table of Contents
Table of Contents P. 4 FY2016-3Q Financial Highlights P. 13 Usage Trend of Services P. 16 Core Businesses (Advertising/Auctions/Membership Services) P. 26 Upfront Investment-Stage Businesses (Shopping/Credit Card) P. 35 Looking Back on the Three Years of e-Commerce Strategy P. 53 Business Results Su
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: FY2016-3Q Financial Highlights
FY2016-3Q Financial Highlights 4
Slide 5: Executive Summary for FY2016-3Q
Executive Summary for FY2016-3Q Revenue 221.3 (¥B) YoY +12.7％ Operating income 51.7 (¥B) YoY +20.0％ EBITDA 61.1 (¥B) YoY +17.7％ Net income attributable to owners of the parent 35.6 (¥B) YoY +24.0％ Diluted EPS ¥6.2 YoY +24.0％ Via smartphones Advertising-related revenue 72.9 (¥B) YoY +10.4％ 51.2％ Disp
Slide 6: Executive Summary for FY2016-3Q
Executive Summary for FY2016-3Q Advertising-Related Business -Advertising-related revenue achieved a double-digit YoY growth. -Paid search advertising revenue increased YoY. -Proportion of revenue via smartphones exceeded 50% for the first time. e-Commerce-Related Business -Shopping transaction valu
Slide 7: Revenue ¥221.3 billion YoY +12.7%
Revenue (¥Billion) ¥221.3 billion YoY +12.7% 196.4 200 100 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q JGAAP IFRS Gross basis Net basis 7 Note: Between FY2008 and FY2012, we indicated revenue on a net rather than gross b
Slide 8: Quarterly Revenue Breakdown
Quarterly Revenue Breakdown (¥Billion) 221.3 Marketing Solutions Business 196.4 19.1 +2.9 16.1 YoY +6.6% Recovery in the growth rate of advertising-related revenue +17.3 134.9 Consumer Business (*) 117.6 YoY 14.7% Growth in revenues of consolidated subsidiaries; and shopping-related +4.3 advertising
Slide 9: Operating Income ¥51.7 billion YoY +20.0%
Operating Income (¥Billion) ¥51.7 billion YoY +20.0% 50 43.1 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q JGAAP IFRS 9
Slide 10: EBITDA ¥61.1 billion YoY +17.7%
EBITDA (¥Billion) ¥61.1 billion YoY +17.7% 51.9 50 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q JGAAP IFRS Note: EBITDA = operating income (loss) + depreciation and amortization 10 Figures for FY2012 and before are those
Slide 11: Sales Promotional Activities
Sales Promotional Activities Promotion cost decreased year on year due to improved efficiency (¥Billion) FY2014 FY2015 FY2016 FY2016 3Q Breakdown of sales promotion costs (*1) Shopping 60% 18.6 YAHUOKU! 20% 13.7 Financial & Payment 10% 10.9 Video services, etc. (*2) 10% 9.5 6.5 4.0 4.2 5.2 4.6 4.3 4
Slide 12: Net Income Attributable to Owners of the Parent
Net Income Attributable to Owners of the Parent (¥Billion) ¥35.6 billion YoY +24.0% 30 28.7 20 10 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q JGAAP IFRS 12
Slide 13: Usage Trend of Services
Usage Trend of Services 13
Slide 14: Daily Unique Browsers
Daily Unique Browsers Smartphones (*1) PC+Others (*2) Usage via 50.61 57.61 smartphones 42.43 64.5% 28.07 FY2013 FY2014 FY2015 FY2016 3Q 3Q 3Q 3Q *1 Quarterly average; includes accesses to Yahoo! JAPAN via applications and browsers. Access via applications and access via browsers are counted separat
Slide 15: Number of Monthly Active User IDs
Number of Monthly Active User IDs (Million) 37.31 +15.9% 27.52 29.11 32.20 YoY December December December December 2013 2014 2015 2016 15 Note: Number of Yahoo! JAPAN IDs logged-in in each month.
Slide 16: Core Businesses
Core Businesses Advertising Auctions Membership Services 16
Slide 17: Advertising-Related Revenue
Advertising-Related Revenue (¥Billion) Display Ad Paid Search Ad 72.9 66.0 62.1 58.9 20.8 24.8 32.6 37.5 +10.4% 38.0 37.2 35.4 YoY 33.4 FY2013 FY2014 FY2015 FY2016 3Q 3Q 3Q 3Q 17
Slide 18: Paid Search Advertising Revenue –YoY Growth Rate
Paid Search Advertising Revenue –YoY Growth Rate +5.9% Continuous functional +0.6% improvements -1.8% -2.1% -3.4% Increase in demand from -5.4% some advertisers -10.9% -10.4% -12.7% FY2014 FY2015 FY2016 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 18
Slide 19: Proportion of Advertising-Related Revenue via Smartphones
Proportion of Advertising-Related Revenue via Smartphones 51.2% 41.4% 33.8% 22.9% Exceeded 50% for the first time FY2013 FY2014 FY2015 FY2016 3Q 3Q 3Q 3Q Note: Proportion of advertising revenue via smartphones in total advertising revenue. 19 The prior data have been retroactively adjusted. Contains
Slide 20: Advertising-Related Revenue via Smartphones
Advertising-Related Revenue via Smartphones (¥Billion) 37.3 Display Ad Paid Search Ad 27.3 YoY 20.9 13.4 +36.4% FY2013 FY2014 FY2015 FY2016 3Q 3Q 3Q 3Q 20
Slide 21: Introduction of Video Advertising on Smartphones
Introduction of Video Advertising on Smartphones Test distribution started on app services from January 11 21 Note: Screen image for illustrative purpose only.
Slide 22: Core Businesses
Core Businesses Advertising Auctions Membership Services 22
Slide 23: Auction-Related Transaction Value
Auction-Related Transaction Value (*) (¥Billion) 242.1 221.7 233.6 A record 205.1 1Q-3Q high FY2013 FY2014 FY2015 FY2016 3Q 3Q 3Q 3Q 23 Note: Includes transaction values of YAHUOKU!, tradecarview (http://www.tradecarview.com/), BOOKOFF Online (http://www.bookoffonline.co.jp/), and Yahoo! Tickets fro
Slide 24: Core Businesses
Core Businesses Advertising Auctions Membership Services 24
Slide 25: Number of Monthly Paid-Membership IDs
Number of Monthly Paid-Membership IDs (Million) Others Yahoo! Premium members 17.55 16.34 14.60 15.07 Yahoo! Premium members +8.4% December December December December (end of month) YoY 2013 2014 2015 2016 Note: Total of Yahoo! Premium members, Yahoo! BB subscribers, monthly paid-subscribers of digi
Slide 26: Upfront Investment-Stage Businesses: Shopping
Upfront Investment- Stage Businesses Shopping Credit Card 26
Slide 27: Number of Items
Number of Items (Million) 250 Biggest selection 180 80 140 in Japan(*) (end of month) December December December December 2013 2014 2015 2016 Note: Number of items listed on Yahoo! Shopping. * Survey by Yahoo! JAPAN 27
Slide 28: Shopping Transaction Value
Shopping Transaction Value (¥Billion) 140.7 114.0 A record 68.9 76.9 約 70% high FY2013 FY2014 FY2015 FY2016 3Q 3Q 3Q 3Q Note: Includes transaction values of Yahoo! Shopping and LOHACO. LOHACO’s transaction value is the revenue (closing date: 20th of every month) of LOHACO business, operated by ASKUL
Slide 29: Shopping-Related Advertising Revenue
Shopping-Related Advertising Revenue (¥Billion) 5.8 A record 1.1 1.3 約 70% 3.0 high FY2013 FY2014 FY2015 FY2016 3Q 3Q 3Q 3Q Note: Total of Yahoo Japan Corporation’s non-consolidated Shopping-related advertising revenue; advertising revenue of StoreMatch, an advertising product in Yahoo! Shopping sol
Slide 30: Upfront Investment-Stage Businesses: Credit Card
Upfront Investment- Stage Businesses Shopping Credit Card 30
Slide 31: Number of Valid Credit Card Holders
Number of Valid Credit Card Holders (Million) Launched Yahoo! JAPAN Card 3.41 YoY 1.9 x 1.81 0.62 0.59 December December December December (end of month) 2013 2014 2015 2016 Note: Includes card holders of KC Card, Yahoo! JAPAN Card and SoftBank Card (“Omakase charge”). 31
Slide 32: Credit Card Transaction Value
Credit Card Transaction Value (¥Billion) Launched Yahoo! JAPAN Card 174.1 YoY 2.6 x 67.8 15.7 16.5 FY2013 FY2014 FY2015 FY2016 3Q 3Q 3Q 3Q Note: Excludes cash advance service. 32 Includes card holders of KC Card, Yahoo! JAPAN Card and SoftBank Card (“Omakase charge”).
Slide 33: Number of Yahoo! Wallet Accounts
Number of Yahoo! Wallet Accounts (Million) 35.79 Roughly 25.68 28.44 32.70 equals the number of Monthly Active User IDs December December December December (end of month) 2013 2014 2015 2016 33 Note: Yahoo! Wallet is a payment system which uses Yahoo! JAPAN IDs and passwords for authentication. It e
Slide 34: Yahoo! Wallet Transaction Value
Yahoo! Wallet Transaction Value (¥Billion) 322.4 YoY +35.4% 238.2 175.6 153.1 FY2013 FY2014 FY2015 FY2016 3Q 3Q 3Q 3Q Note: Yahoo! Wallet is a payment system which uses Yahoo! JAPAN IDs and passwords for authentication. It enables users to make payments for services and 34 merchandise using register
Slide 35: Looking Back on the Three Years of e-Commerce Strategy
Looking Back on the Three Years of e-Commerce Strategy 35
Slide 36: Yahoo! Shopping Strategy
Yahoo! Shopping Strategy Announced a new business model in October 2013. Transaction based Monthly tenant fee system-use fees Free Free 36
Slide 37: Yahoo! Shopping Strategy
Yahoo! Shopping Strategy 3 years have passed since the implementation of a business model in which we strove to monetize through advertising. More Tougher Improved price products competition competitiveness and quality Advertising More -related Attractive platform sellers for buyers revenue Improved
Slide 38: Number of Stores x 16
Number of Stores (Thousand) 481 Strategy change x 16 in 3 years 29 FY2013 FY2014 FY2015 FY2016 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 38 Note: Figures as of the end of each quarter. Number of stores in Yahoo! Shopping. Number of stores is based on accounts issued and includes accounts that are
Slide 39: Number of Items x 3
Number of Items (Million) 250 Strategy change x3 in 3 years 80 FY2013 FY2014 FY2015 FY2016 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 39 Note: Figures as of the end of each quarter. Number of items listed on Yahoo! Shopping.
Slide 40: Shopping Transaction Value x 2
Shopping Transaction Value (¥Billion) 140.7 Strategy change 68.9 x2 in 3 years FY2013 FY2014 FY2015 FY2016 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q Note: Includes transaction values of Yahoo! Shopping and LOHACO. 40 LOHACO’s transaction value is the revenue (closing date: 20th of every month) of
Slide 41: Shopping-Related Advertising Revenue x 5
Shopping-Related Advertising Revenue (¥Billion) 5.8 Strategy change x5 in 3 years 1.1 FY2013 FY2014 FY2015 FY2016 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q Note: Total of Yahoo Japan Corporation’s non-consolidated Shopping-related advertising revenue; advertising revenue of StoreMatch, an adverti
Slide 42: Strong confidence in the Success of the e-Commerce Strategy
Strong confidence in the Success of the e-Commerce Strategy 42
Slide 43: e-Commerce Ratio in Japanese Retail Market
e-Commerce Ratio in Japanese Retail Market 5% e-Commerce market still has a large room for growth 43 Source： The EC ratio as defined in FY2015 Infrastructure Development Related to Japan’s Socioeconomic Computerization and Shift to Service Industry/E-Commerce Market Survey (Ministry of Economy, Trad
Slide 44: Unique Measures for Expanding the e-Commerce Market
Unique Measures for Expanding the e-Commerce Market Strengthen our superiority 1 Further enhance the number of items listed which is already the largest in Japan Increase new buyers 2 Special benefits to members of Yahoo! JAPAN services or of the group companies’ services Increase new buyers 3 Traff
Slide 45: Yahoo! Shopping Number of Buyers
Yahoo! Shopping Number of Buyers New buyers Repeat buyers Repeat buyers contributed to growth FY2013 FY2014 FY2015 FY2016 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 45 Note: Number of new buyers is the number of IDs of buyers who purchased for the first time, and of buyers whose purchase was made
Slide 46: Yahoo! Shopping Transaction Value
Yahoo! Shopping Transaction Value Premium Members Non-Premium Members % of transaction value derived from Yahoo! Premium members 42％ 62% FY2013 FY2014 FY2015 FY2016 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 46
Slide 47: Number of Yahoo! Premium Members Subscribed via Yahoo! Shopping
Number of Yahoo! Premium Members Subscribed via Yahoo! Shopping x 49 in 3 years FY2013 FY2014 FY2015 FY2016 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 47
Slide 48: Upfront Investment-Stage Businesses Contribute to Growth of Core Businesses
Upfront Investment-Stage Businesses Contribute to the Growth of Core Businesses 48
Slide 49: Enhance Synergies between Services
Enhance Synergies between Services Collaboration between our core businesses and upfront investment-stage businesses is being accelerated Traffic referrals e-Commerce Benefits (Shopping) Yahoo! Media Benefits Premium Traffic Services Benefits referrals members Traffic referrals Traffic referrals Cre
Slide 50: Enhance Cross Use of Multi-Big Data
Enhance Cross Use of Multi-Big Data Cross use big data acquired through logged-in usage in each service Media Services Improve content/ advertising targeting accuracy e-Commerce Financial & Payment Improve conversion Improve accuracy in rate credit judgements 50
Slide 51: Strong Businesses are Sources of New Strong Businesses
Strong Businesses are Sources of New Strong Businesses 51
Slide 52: Targeted revenue composition by business segment
Targeted revenue composition by business segment (*) Strive to establish a well-balanced revenue structure Other Businesses (Financial & Payment, etc.) Consumer Business Marketing Solutions Business FY2014 FY2015 FY2020 Actual Actual Estimate 52 * Currently envisaged image excluding ASKUL Corporatio
Slide 53: Supplemental Information
Supplemental Information 53
Slide 54: Business Segment Breakdown
Business Segment Breakdown Marketing Solutions Business ・Advertising: Display advertising (“Yahoo! Display Ad Network (YDN)”, “Premium Advertising”), Paid search advertising “Sponsored Search” ・Business Services: CRM-related services, Media-related services, Recruiting-related services and others ・P
Slide 55: Advertising Products
Advertising Products Main Main Fee Placement Advertising Products Advertiser Format Calculation Pages Base Paid search Search results Major Sponsored Search® Text corporations advertising pages Per-click rate (Performance-based) *2 Small and Yahoo! Display Text medium-sized Ad Network Banner compani
Slide 56: Organization Chart of Yahoo Japan Corporation
Organization Chart of Yahoo Japan Corporation President & Representative Director / As of January 1, 2017 CEO SEVPCO / COO SEVPCO / CFO Board of Directors Media & Marketing System Management Audit and Supervisory Solutions Group Corporate Committee Group (864) Management Group Media Company Data & S
Slide 57: Consolidated Subsidiaries and Associates
Consolidated Subsidiaries and Associates (as of December 31, 2016) Major consolidated subsidiaries ASKUL Corporation Carview Corporation Dynatech inc. eBOOK Initiative Japan Co., Ltd. ecohai Co., Ltd. FirstServer, Inc. GYAO Corporation IDC Frontier Inc. Ikyu Corporation Netrust
Slide 58: Corporate Governance System
Corporate Governance System 58
Slide 59: YaHoo!
YaHoo! JAPAN