Lifull Co.ltd. · TSE:2120
Lifull Co.ltd — Q2 FY2020/9 Earnings Presentation
55 slides from Lifull Co.ltd's earnings presentation, May 14, 2020
Slide 1: Quarterly Results (IFRS) FY2020/9 Quarter 2
LIFULL Co., Ltd. Quarterly Results (IFRS) FY2020/9 Quarter 2 (October 1, 2019 – March 31, 2020) Disclaimer The opinions and projections, etc. contained herein represent the judgment of LIFULL Co., Ltd. at the time this document was prepared. Please be aware that actual results may vary considerably
Slide 2: Index
Index 1. Revisions to the Earnings Forecast Page 2 2. Second Quarter Financial Results Page 4 3. Quarter Review Page 16 • HOME’S Services • Overseas 4. Repurchase of Treasury Shares Page 31 5. Appendices Page 34 6. IR Office Information Page 54 1
Slide 3: Revisions to the Earnings Forecast
Revisions to the Earnings Forecast (Disclosed on April 20, 2020) Copyright(c) LIFULL Co., Ltd. All Rights Reserved. 2
Slide 4: Assumptions Behind the Revisions - Timing of Effects of COVID-19
Assumptions Behind the Revisions - Timing of Effects of COVID-19 - POINT • Impact from the novel coronavirus (COVID-19) has been felt around the world • As a result, we have revised our earnings forecast based on a worst-case scenario in which the conditions as of April 20, 2020 (such as stay home o
Slide 5: LIFULL Business Environment Survey - Effects of COVID-19
LIFULL Business Environment Survey - Surveys of Real Estate Businesses and Users on Effects of COVID-19 - POINT Over 90% of realtors’ businesses affected while 56% of Japanese users plan on completing their moves Effects on Real Estate Businesses User Behavior Realtors responding that “business Prim
Slide 6: Revised Earnings Forecast for FY 2020/09 IFRS
Revised Earnings Forecast for FY 2020/09 IFRS Revised Earnings Forecast disclosed on April 20, 2020 (https://lifull.com/wp-content/uploads/2020/04/release_20200420_en_revision.pdf) Condensed Statemants of Income and Loss Revenue by Segment FY2020 FY2020 FY2020 FY2020 Oct.-Sep. Oct.-Sep. Change Chang
Slide 7: Response to COVID-19 (1) - For All Stakeholders
Response to COVID-19 (1) - For All Stakeholders - Putting the safety of all stakeholders as top priority, we have quickly taken action to ensure continuous POINT business operations and development of the market Users & Society Businesses Employees (Realtors & Partners) Regular updates and releases
Slide 8: Response to COVID-19 (2) - Strengths of the LIFULL Group
Response to COVID-19 (2) - Strengths of the LIFULL Group - POINT The nature of our service and low operation costs ensure that business is not hindered even in unpredictable times • Online Services: Users and clients can continue to access services even if temporary lockdown restrictions are put int
Slide 9: Response to COVID-19 (3) - Strengthening the Financial Position
Response to COVID-19 (3) - Strengthening the Financial Position - POINT To prepare for future demand for funds and maintain business flexibility, we are borrowing 7.1 billion yen Solid Financial Base Cash and cash equivalent as of the end of March 2020: 7,984 mil. yen Borrowing to thoroughly secure
Slide 10: Low impact on business operations; opportunity to accelerate digital transformation
Low impact on business operations. Unique opportunity to accelerate the digital transformation of the real estate industry Strong financial position and flexibility for continued growth in an unpredictable future
Slide 11: Second Quarter Financial Results
FY 2020/9 Second Quarter Financial Results Copyright(c) LIFULL Co., Ltd. All Rights Reserved. 10
Slide 12: Condensed Statements of Income and Loss (IFRS)
Condensed Statements of Income and Loss (IFRS) Revenue: -2.1% YoY EBITDA: +50.8% YoY Quarterly Profit: +53.8% YoY Unit: JPY mil. FY2019 Q2(Oct.-Mar.) FY2020 Q2(Oct.-Mar.) Change Change % Revenue 19,599 19,185 -414 -2.1% *1 Cost of revenue 2,306 2,274 -32 -1.4% SG&A (excl. depreciation and amortizati
Slide 13: Revenue and Income and Loss by Segment (IFRS)
Revenue and Income and Loss by Segment (IFRS) Improved media presence in HOME’S Services, but still not meeting expectations from partial pricing structure change Despite 5.6% stronger yen, Overseas seeing increases in revenue and earnings resulting from the acquisition of Mitula FY2019 Q2 FY2020 Q2
Slide 14: Progress Toward FY2020/9 Forecast (IFRS)
Progress Toward FY2020/9 Forecast (IFRS) Condensed Statements of Income and Loss Revenue by Service FY2020 FY2020 Q2 FY2020 FY2020 Q2 Oct.-Sep. Oct.-Mar. Oct.-Sep. Oct.-Mar. [Full-Year Progress [Full-year Progress Unit: JPY mil. [Actual] Unit: JPY mil. [Actual] Forecast] forecast] Revenue 30,760 19,
Slide 15: Condensed Statement of Financial Position and Goodwill (IFRS)
Condensed Statement of Financial Position and Goodwill (IFRS) Under IFRS 16, Operating Leases have been reclassified as Right-of-Use Assets resulting in +4.6 billion yen in total assets As of As of Change Change % Main items Unit: JPY mil. Sep 30, 2019 Mar 31, 2020 Cash -1,254 Refer to "Condensed St
Slide 16: Condensed Statement of Cash Flow (IFRS)
Condensed Statement of Cash Flow (IFRS) Partial payment and refinancing of short-term loans for the acquisition of Mitula Free cash flow increased to 1.23 billion yen while cash and cash equivalents increased to 7.9 billion yen FY2019 Q2 FY2020 Q2 Change Main items Unit: JPY mil. Oct.-Mar. Oct.-Mar.
Slide 17: Services
Services Copyright(c) LIFULL Co., Ltd. All Rights Reserved. 16
Slide 18: Key Performance Indicators - Client Network and ARPA
Key Performance Indicators - Client Network and ARPA - The client network has shrunk since the implementation of the partial change in the pricing structure Delays in plans to boost media presence and effects of COVID-19 have lead to a decline in ARPA 6-Month Average 6-Month Average Client Network A
Slide 19: Technology to make moving house safer and more comfortable
Utilizing the benefits of technology we provide support to make moving house safer and more comfortable
Slide 20: Boosting Media Presence - More Details and More Complete Information
Boosting Media Presence - More Details and More Complete Information - To create richer property details, we altered parts of the pricing structure for rental and sale listings in October 2019 Achievements Challenges Rate of optional information on listings affected by the change to the pricing stru
Slide 21: Boosting Media Presence - Increasing Brand Awareness of LIFULL HOME'S
Boosting Media Presence - Increasing Brand Awareness of LIFULL HOME’S - Television commercials about Tag Search broadcast for the peak moving season (January – March) Promotion Results ＋8.5% Storyline ： #TagSearch for a place to live that suits your lifestyle Spokesperson ： Tsubasa Honda (Actress an
Slide 22: Boosting Media Presence - All-Around Home Search Support Services
Boosting Media Presence - All-Around Home Search Support Services for Users - In addition to our original search tools for homes, we also offer support to home-seekers over a variety of channels Online Online or Offline Professional Support Consultation Service LIFULL HOME’S Sumai no Madoguchi (Free
Slide 23: Bringing More of the Moving Process Online
Bringing More of the Moving Process Online By adding more properties that can be viewed online, we’re giving users a safer, more relaxed experience LIFULL HOME’S LIVE Results After Beginning free of charge for members1,2 Free Service (January vs. March) New Applications +50% Consultations Viewings D
Slide 24: Current Availability of Real Estate Transactions Online
Current Availability of Real Estate Transactions Online How much of the moving process can users complete using LIFULL HOME’S? Rent Search for Contact Personal Property Contracts and Properties Realtors Consultation Viewings Paperwork1 Sale Opportunities More Convenient Rent: More widespread use of
Slide 25: Online Transactions for Sale Properties - Online Trials for Verbal Disclosures
Online Transactions for Sale Properties - Online Trials for Verbal Disclosures and Other Initiatives - We have been pushing for legalization of online verbal disclosures for all properties to stimulate the real estate market Aug. 2015 Oct. 2017 Oct. 2019 TBD Gov. Start of Online Trials for Online Di
Slide 26: Overseas
Overseas Copyright(c) LIFULL Co., Ltd. All Rights Reserved. 25
Slide 27: Global Marketplace Group
Global Marketplace Group Connecting people to solutions in life’s biggest decisions
Slide 28: LIFULL CONNECT - Connecting Systems
LIFULL CONNECT - Connecting Systems - Campaign management and traffic acquisition system brings together the benefits of all aggregation brands with more value for clients Reach New Users Bidding Campaign Management and Traffic Bidding systems for buying and selling Acquisition System advertising in
Slide 29: LIFULL CONNECT - Connecting Expertise
LIFULL CONNECT - Connecting Expertise - By sharing expertise and exchanging SEO best-practices, organic traffic has been improving since December 2019 LIFULL CONNECT Aggregation Organic Traffic Trend FY2019 Drop in traffic from COVID-19 FY2020 February Traffic YoY Growth up 10% YoY Oct. 10月 Nov. 11月
Slide 30: Growth in Marketplaces - Growth in Up-coming Markets
Growth in Marketplaces - Growth in Up-coming Markets - Continuously producing stronger results thanks to new hires reinforcing local teams and sales initiatives Revenue Trends for Marketplaces in Southeast Asia and Latin America Decreases from COVID-19 Jan. Feb. Mar. FY 2019/9 FY 2020/9 1. Sum of sa
Slide 31: Connecting the Organization - Combining Resources for Added Flexibility
Connecting the Organization - Combining Resources for Added Flexibility - Team expansion targets have been pushed back until after the effects of COVID-19 have subsided Combining teams to react more quickly to changes Team Expansion Goals Pushed Back Due to COVID-19 Combining Teams Market- Aggregati
Slide 32: Repurchase of Treasury Shares
Repurchase of Treasury Shares Copyright(c) LIFULL Co., Ltd. All Rights Reserved. 31
Slide 33: Repurchase of Treasury Stock
Repurchase of Treasury Stock We have decided to repurchase shares of treasury stock as of May 14, 2020 Reasons Details of the Repurchase Type of Shares Total Shares Enhance shareholder 3,000,000 shares (max.) Common Stock returns Ratio of treasury stock to be acquired to shares outstanding [excludin
Slide 34: The Goal of the LIFULL Group: Make every LIFE FULL
The Goal of the LIFULL Group Make every LIFE FULL
Slide 35: Appendices
Appendices Copyright(c) LIFULL Co., Ltd. All Rights Reserved. 34
Slide 36: Corporate info (as of December 30, 2019)
Corporate info (as of December 30, 2019) Company LIFULL Co., Ltd. Stock code 2120 (TSE 1st Section) Representative Takashi Inoue, President and CEO History Mar. 12, 1997 Established Oct. 2006 Listed in TSE, Mother’s Section Mar. 2010 Listed on TSE 1st Section President and CEO Takashi Inoue Capital
Slide 37: LIFULL HOME'S
LIFULL HOME’S LIFULL HOME’S Real Estate and Housing Information Site https://www.homes.co.jp/ • Real estate listing website with the most listings in Japan. (According to a report by Sankei Advertising on January 7, 2019) • Apart from property listings, LIFULL HOME'S also features an in-house Qualit
Slide 38: Primary Group Companies
Primary Group Companies (Listed according to date of founding / acquisition) • Planning and operation of the real estate and housing information website, LIFULL Rumah PT. LIFULL MEDIA INDONESIA1 • Planning and operation of the service for Japanese resident officers assigned to Jakarta, LIFULL Concie
Slide 39: Segments and Primary Services
Segments and Primary Services Segments Main services HOME’S Services Business LIFULL HOME’S AD Master (former Renter’s Net) NabiSTAR LIFULL Marketing Partners Co., Ltd. Overseas Businesses Trovit (LIFULL CONNECT) Mitula (LIFULL CONNECT) Nestoria (LIFULL CONNECT) RESEM (LIFULL CONNECT) Dot Property (
Slide 40: Annual Revenue and Timeline of Company Growth
Earnings Forecast Revision due to Annual Revenue and Timeline of Company Growth impact of COVID-19 Acquisition of MItula JPY 100,000 450 Changed fiscal year (irregular 6-month period) 400 Changed company name to LIFULL Co., Ltd. 350 Acquisition of Overseas real LIFULL MP estate services launched 300
Slide 41: Number of Employees - Group
Number of Employees - Group - Increase in employees due to overseas expansion 1,558 1500 1,275 1,199 1,118 ■ Overseas 1000 919 ■ Other Businesses 735 ■ HOME’S Services 561 500 0 End of End of End of End of End of End of End of Mar 2014 Mar 2015 Mar 2016 Mar 2017 Sep 2017 Sep 2018 Sep 2019 1) Not inc
Slide 42: Growth of Consolidated Earnings and Breakdown - Consolidated Revenue
Growth of Consolidated Earnings and Breakdown - Consolidated Revenue - Acceleration of growth in the Overseas Business segment in addition to steady progress in HOME'S Services 40,533 Unit: JPY mil. 4.8% Other Businesses 34,565 32,112 22.0% Overseas※ 27,566 73.2% Services FY2018 FY2019 3 Periods Pri
Slide 43: Consolidated statements of profit and loss (quarterly)
Consolidated statements of profit and loss (quarterly) FY2017/3 FY2017/9 FY2018/9 FY2019/9 FY2020/9 Unit : JPY mil Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Revenue 6,846 6,910 7,107 9,056 7,793 8,154 8,128 9,541 8,345 8,549 8,391 11,208 9,753 9,944 9,202 9,983 HOME'S Services Business 5,616 5
Slide 44: Expense-to-Revenue Ratio IFRS
Expense-to-Revenue Ratio IFRS Large improvement in profitability Increases in personnel expenses due to the acquisition of Mitula and hiring in the Overseas segement -3.3pt -2.6pt +1.9pt 31.4% 27.2% 30.8% 27.0% Cost of Sales and Other SG&A -1.9pt -0.2pt Advertising Expenses -0.3pt 34.4% 33.6% 30.8%
Slide 45: (Ref.) Pricing Structure Revisions - Rental & Sale Properties
(Ref.) Pricing Structure Revisions - Rental & Sale Properties Starting Oct. 2019 - New Pricing Structure Basic Membership Fee Inquiries Pay by Inquiry (Mon.) Inquiries (e-mail / tel.) Monthly Rent of Property × 9.5% Rental ¥15,000 Company Inquiries Number of Inquiries × ¥5,000 Inquiries (e-mail / te
Slide 46: Quarterly Results - LIFULL CONNECT
Quarterly Results - LIFULL CONNECT - Steady growth despite effects from business acquisition and seasonality Results from LIFULL CONNECT* in EUR (■ Pre-consolidation results of Mitula Group) Unit: 1,000 EUR 15,802 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 2017 2018 201
Slide 47: Overseas Segment Results - Segment Profit and Loss
Overseas Segment Results - Segment Profit and Loss (Quarterly Trend) - Some services under improvement measures Intangible assets for Mitula have been defined and Depreciation costs determined ■ LIFULL CONNECT ■ International Division ■ Depreciation ■M&A Costs ■ Other 554 Quarterly Segment P&L Unit:
Slide 48: Other Businesses - Segment Sales Revenue (Quarterly)
Other Businesses - Segment Sales Revenue (Quarterly) - Without regard to the effects of the transfer of LHL1, continuing to maintain scale of operations Transfer of LHL Quarterly Revenue 547 Unit: JPY mil. ■ Existing businesses *2 ■ Other new businesses Founding of 4 companies (incorporation-type co
Slide 49: Other Businesses - Segment Profit and Loss (Quarterly)
Other Businesses - Segment Profit and Loss (Quarterly) - Increases investments for the Regional Revitalization Business and smooth progress without regard to the sale of LHL Transfer of LHL Quarterly Segment Profit and Loss Unit: JPY mil. 98 ■ Existing businesses* ■ Other new businesses 60 44 41 33
Slide 50: Progress in Regional Revitalization - Repurposing Vacant Homes
Progress in Regional Revitalization - Repurposing Vacant Homes - Previously vacant home repurposed as a vacation rental and sold by the LIFULL Group What was renovated? (Selection) BUY Before FIX Kitchen Bath Garden After RUN Wave House 99 SELL Kujukuri-cho, Chiba Acquired Opened Sold House decorate
Slide 51: (Ref.) External Market Data - Monthly
(Ref.) External Market Data - Monthly - 2017 2018 2019 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 (Jan-Dec) (Jan-Dec) (Jan-Dec) Capit
Slide 52: (Ref.) Domestic Market Environment
(Ref.) Domestic Market Environment 01 02 03 04 Number of Real Estate Number of Licensed Real Number of Offices Size of Real Estate Listing Companies Estate Agencies Market 328,553 124,451 (108,800 Corporates) 352,733 Approx. 900+ billion yen (Based on 2017 values from the (Based on 2018 values from
Slide 53: (Ref.) Base Results of the 2018 Housing and Land Survey
(Ref.) Base Results of the 2018 Housing and Land Survey (Statistics Bureau of Japan) Trend of Total Dwellings and Total Households Trend of Number of Vacant Homes and Vacancy Rates Breakdown of Vacant Homes (10,000 Units) +29 849 Total 8,489,000 Total Dwellings(10,000 Units) 900 16.0% +1,779 6,241 8
Slide 54: (Ref.) Overseas competitors
(Ref.) Overseas competitors Competitors have high market capitalization due to their user shares in each country. [Rightmove, UK] Market Cap. As of September, 2020 (forecast) Revenue ¥37.8 bil. (YoY+8%） [LIFULL, JP] ¥954.5 bil. Market Cap. EBITDA ¥28.4 bil. Revenue ¥30.7 bil. EBITDA ¥2.9 bil. ¥589.8
Slide 55: IR Team
IR Team IR Site Japanese https://LIFULL.com/ir/ English https://LIFULL.com/en/ir/ E-mail ir@LIFULL.com TEL +81-3-6774-1603 (Weekdays 10:00 - 18:00 JST) Annual Report 2018 Other Information about LIFULL Twitter Facebook Page Japanese https://lifull.com/ir/ir-data/fy2018/ English https://lifull.com/en