Ly Corporation · TSE:4689
Ly — Yahoo Japan — FY2018 3Q Earnings Presentation
45 slides from Ly's earnings presentation, Feb 4, 2019
Slide 1: FY2018-3Q Business Results
Yahoo Japan Corporation FY2018-3Q Business Results February 4, 2019
Slide 2: Table of Contents
Table of Contents P. 4 FY2018-3Q Financial Results P. 11 Results by Segments P. 16 Mobile Payment P. 24 Pursuing Future Growth P. 33 Long-Term Revenue/Operating Income Outlook P. 38 Supplemental Information Unless otherwise specified, English-language documents are prepared solely for the convenienc
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 (Company, Yahoo! JAPAN) and its consolidated subsidiaries and affiliates. The Company cautions you that a number of importa
Slide 4: FY2018-3Q Financial Results
FY2018-3Q Financial Results 4
Slide 5: FY2018-3Q Investor Meeting - Topics
FY2018-3Q Investor Meeting - Topics Three consecutive quarters of double-digit 1 YoY growth in paid search advertising revenue In 4 months since start of service, cumulative no. of 2 registered PayPay users exceeded 4 million (Fastest in our history) 5
Slide 6: Executive Summary for FY2018 (1Q-3Q)
Executive Summary for FY2018 (1Q-3Q) FY2017 FY2018 YoY 1Q - 3Q 1Q – 3Q Revenue 658.7 (¥B) 707.5 (¥B) +7.4% Revenue excluding impact from change in accounting policy* 658.7 (¥B) 722.4 (¥B) +9.7% Operating income 147.8 (¥B) 119.6 (¥B) -19.0% EBITDA 179.5 (¥B) 158.4 (¥B) -11.7% Profit for the period 10
Slide 7: Advertising-Related Revenue (1Q-3Q)
Advertising-Related Revenue (1Q-3Q) (¥ Billion) Display Paid search 238.7 222.6 207.8 195.1 180.4 YOY 113.8 116.5 +2% YoY 89.4 105.2 68.1 112.3 105.7 108.8 122.1 YOY +7% 102.5 +12% FY2014 FY2015 FY2016 FY2017 FY2018 1Q – 3Q 1Q – 3Q 1Q – 3Q 1Q – 3Q 1Q – 3Q 7 Note: Includes advertising revenue recorde
Slide 8: Advertising Revenue - Smartphone Videos (1Q-3Q)
Advertising Revenue - Smartphone Videos (1Q-3Q) (¥ Billion) 3.4 1.1 3Q YoY 1.3 0.6 0.4 1.3 0.8 2Q 1Q Approx. 2.5X 0.3 FY2017 FY2018 1Q – 3Q 1Q – 3Q 8
Slide 9: EC Transaction Value (Sale of Goods) (1Q-3Q)
EC Transaction Value (Sale of Goods) (1Q-3Q) (¥ Billion) ASKUL BtoB business Others Shopping business 1453.5 YAHUOKU! 1337.8 182.8 1170.4 171.9 40.2 978.0 66.5 160.2 30.3 45.5 YOY YoY 564.9 805.5 17.7 461.0 +23% +9% 17.9 341.8 265.7 196.6 659.2 665.4 YOY 591.0 627.9 638.0 +0.9% FY2014 FY2015 FY2016
Slide 10: Guidance for Full Year Operating Income
Guidance for Full Year Operating Income Previous announcement ¥133 – 143 billion Current guidance ¥140 – 143 billion Expenses for new challenges Expenses for Estimates at Expected beginning of expected to be around ¥18 billion new challenges FY results (announced ¥30 billion in the beginning of fisc
Slide 11: Results by Segments
Results by Segments 11
Slide 12: Revenue by Segments (1Q-3Q)
Revenue by Segments (1Q-3Q) (¥ Billion) Major events Commerce business 707.5 • Implemented new e-commerce strategy (3Q, FY13 658.7 Oct.) Media business 630.9 • Began terminating distribution of paid search advertising to partner sites FY15 (smartphone) (1Q) • Launched In-feed advertising (1Q, May) 4
Slide 13: Factors of Change in Revenue (1Q-3Q)
Factors of Change in Revenue (1Q-3Q) (¥ Billion) Revenue increase in YOY Consolidation of Revenue payment +11% increase in The Japan business, and Revenue YJ Card increase in Net Bank, Corporation other factors 732.4 ASKUL Limited + Revenue + Revenue increase in Group + Change in 707.5 increase in d
Slide 14: Operating Income by Segments (1Q-3Q)
Operating Income by Segments (1Q-3Q) Gain from remeasurement (¥ Billion) relating to business Other business and adjustments combination with ASKUL Major events Corporation One-time factor Insurance proceeds for Commerce fire in Logistics Center of FY13 ・ Implemented new e-commerce strategy (3Q, Oct
Slide 15: Factors of YoY Change in Operating Income (1Q-3Q)
Factors of YoY Change in Operating Income (1Q - 3Q) • Agreement with former Yahoo! Inc. (¥ Billion) terminated (June 2017) Revenue Gross profit • Change in rate of agreement with Google increase in Media: ¥2.5 B YOY • Higher than expected increase in revenue of Commerce Commerce, etc.: ¥6.7B paid se
Slide 16: Mobile Payment
Mobile Payment 16
Slide 17: 10 Billion Yen Giveaway Campaign - Outline
10 Billion Yen Giveaway Campaign - Outline Results of campaign Dec. 4, 2018 – March 31, 2019 Period ※Terminated on Dec. 13 due to consumption of budget Approx. ¥11.5 billion PayPay ※Total amount given by PayPay bonus Corporation, Yahoo Japan Corporation and provided SoftBank Corp. Includes ¥1 billio
Slide 18: Effect of Campaign - Enhanced Awareness
Effect of Campaign – Enhanced Awareness - No.1 No.1 Name awareness Understanding of service （%） （%） Campaign Campaign 80 30 PayPay PayPay Company A 60 Company B 20 Company A Company C 40 Company B Company C 10 20 0 0 11/24 12/4 12/14 12/24 11/24 12/4 12/14 12/24 12/4 12/13 12/4 12/13 18 Source: Surv
Slide 19: Effect of Campaign - Surge in No. of Registered Users
Effect of Campaign – Surge in No. of Registered Users - In four months since start of service, cumulative no. of registered users exceeded 4 million (fastest in our history) Campaign 19 Note: Total of users registered via PayPay app and via Yahoo! JAPAN app Source: Survey by PayPay Corporation
Slide 20: Post Campaign Reflections - Security Measures
Post Campaign Reflections - Security Measures - Security reinforced to ensure service safety Anti-fraud measures Implementation Restricted no. of times security 1 Implemented code*1 can be entered At credit card registration Implemented identity verification 2 Implemented measure (3D Secure*2) Restr
Slide 21: 2nd Campaign On the Way
2nd Campaign On the Way 21
Slide 22: 2nd Campaign - Outline
2nd Campaign – Outline For every shopping Lottery for every shopping More 20% cashback Yahoo! PayPay balance Premium members (linked with bank account) 1 in 10 chance of full cashback 1 in 5 chance of 19% cashback full cashback Yahoo! JAPAN Card 10% cashback Other credit cards Equivalent to ¥1,000/s
Slide 23: Reinforce Security Notices When Implementing 2nd Campaign
Reinforce Security Notices When Implementing 2nd Campaign Users will be carefully notified of the following: Notify users to be careful of phishing sites when linking to bank accounts Notify users to carefully handle credit card information 23
Slide 24: Pursuing Future Growth
Pursuing Future Growth 24 24
Slide 25: Past 5 Years in Retrospect and the Future
Past 5 Years in Retrospect and the Future Changes in business environments were regarded as opportunities and various challenges were PayPay undertaken to meet these changes. Our strategies have succeeded in enlarging our user base and revenue. Moving on, changes will not be missed and we will grow
Slide 26: Yahoo Japan Corporation aspires to
Yahoo Japan Corporation aspires to: Make our users’ lives convenient to a surprising (!) extent through Yahoo! JAPAN services Online world Even more convenient Offline world New entry 26
Slide 27: Develop Monetization Points
Develop Monetization Points Monetization through “Media & Commerce” combined with “online & offline” and creating value for users Gateway: Services No. of daily unique Exit: Monetization/Usage browsers : 92 million Integrated marketing Login ID: 47 million solution Search・Media etc. (incl. Internet
Slide 28: Integrated Marketing Solution
Integrated Marketing Solution 28
Slide 29: What is Integrated Marketing Solution?
What is Integrated Marketing Solution? Solution which visualizes and maximizes business impact by connecting consumption behavior from the gateway to exit – both online & offline. Business impact Perceive Search Visit store Purchase Repurchase Impact measureable through Yahoo! JAPAN ID linkage Onlin
Slide 30: Developing New Products That Generate Business Impact
Developing New Products That Generate Business Impact ●Coupons for restaurants/retail stores, etc. Link with ID Offline purchases Distribute Get Visit Present Make coupon coupon store coupon payment ●Cashback (users) ●Purchase report (stores) Yahoo! Shopping Search Online ●Product-related paid searc
Slide 31: Tap into Sales Promotion Market in Addition to Advertising Market
Tap into Sales Promotion Market in Addition to Advertising Market Ad market Sales promotion Approx. market Approx. ¥ 6 T ¥ 15 T* Provision of online ads Expansion of video ads Provision of integrated marketing solution which generates high business impact, both online and offline 31 ※Estimate by Yah
Slide 32: Revenue Outlook
Revenue Outlook (¥ Billion) Integrated marketing solution, shopping advertising Paid search advertising, display advertising (excl. shopping advertising) Tap into the ¥15 trillion 500.0 sales promotion market, and aim for 303.4 23.3 ¥500 billion 280.1 in FY2023 ※Image diagram FY2017 FY2023 32 Note:
Slide 33: Long-Term Revenue/Operating Income Outlook
Long-Term Revenue/ Operating Income Outlook 33
Slide 34: Image of Our Long-Term Revenue Composition
Image of Our Long-Term Revenue Composition We will continue to grow while drastically changing our revenue composition to meet the changes in the business environment Data solution Fintech E-commerce (excl. Now ASKUL Group) Integrated marketing solution, shopping advertising Paid search advertising,
Slide 35: Operating Income - Long-Term Outlook
Operating Income – Long-Term Outlook Change income composition to meet changes in business environment and aim for the next development stage (¥ Billion) Gain from remeasurement related to ASKUL Businesses to be strengthened (Shopping advertising, Integrated marketing solution, Financial & Payment,
Slide 36: Yahoo! JAPAN will create a future that can only be shaped by us
Yahoo! JAPAN will create a future that can only be shaped by us 36
Slide 37: Media announcement on DATA FOREST Initiative
Notice Media announcement on DATA FOREST Initiative scheduled on February 13 (Wed.) https://dataforest.yahoo.co.jp/ (Japanese only) 37
Slide 38: Supplemental Information
Supplemental Information 38
Slide 39: Shopping-Related Advertising Revenue and Point-Reward Expenses Percentages
Percentages of Shopping-Related Advertising Revenue*1 and Point-Reward Expenses*2 to Yahoo! Shopping Transaction Value % of Shopping-related advertising revenue % of point-reward expenses 0 FY2015 FY2016 FY2017 FY2018 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q *1 Shopping-Related Advertising revenue / Y
Slide 40: Business Segment Breakdown
Business Segment Breakdown Media Business ・Advertising: Paid search advertising “Sponsored Search”, Display advertising (“Yahoo! Display Ad Network (YDN)”, “Premium Advertising”) ・Business Services: CRM-related services, Media-related services and others ・Personal Services: Video-related services an
Slide 41: 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) *2 Text Yahoo! Display Small and Banner medium-sized Ad Network YDN and
Slide 42: Definition of EC Transaction Value from FY 2018
Definition of EC Transaction Value from FY 2018 YAHUOKU! EC transaction value (sale of goods) Shopping Yahoo! Shopping, LOHACO, Charm Business EC transaction value ASKUL BtoB Yahoo! Tickets, Ouchi-Direct , Others tradecarview, BOOKOFF Online EC transaction Ikyu, Yahoo! Travel, value (others) Yahoo!
Slide 43: Organization Chart of Yahoo Japan Corporation
Organization Chart of Yahoo Japan Corporation Chairman of the As of the end of Dec. 2018 Board of Directors President & Representative Director / CEO Business Promotion Group Board of Media Services Group Directors (633) (182) Services Management Group (253) Audit and Shopping Services Group Search
Slide 44: Consolidated Subsidiaries and Affiliates
Consolidated Subsidiaries and Affiliates As of the end of Dec. 2018 Major consolidated subsidiaries ASKUL Corporation Carview Corporation CLASSIFIED Corporation Dynatech inc. eBOOK Initiative Japan Co., Ltd. ecohai Co., Ltd. GYAO Corporation Ikyu Corporation Netrust, Ltd Passrevo Corporation Syner
Slide 45: 主な連結子会社および持分法適用会社
主な連結子会社および持分法適用会社 45