Ly Corporation · TSE:4689
Ly — Yahoo Japan — Q1 FY2018 Earnings Presentation
53 slides from Ly's earnings presentation, Jul 27, 2018
Slide 1: FY2018-1Q Business Results
Yahoo Japan Corporation FY2018-1Q Business Results July 27, 2018
Slide 2: Table of Contents
Table of Contents P. 4 FY2018-1Q Financial Highlights P. 12 Media Business P. 24 Commerce Business P. 41 Aiming to Improve Corporate Value P. 48 Supplemental Information Unless otherwise specified, English-language documents are prepared solely for the convenience of non-Japanese speakers. If there
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: FY2018-1Q Financial Highlights
FY2018-1Q Financial Highlights 4
Slide 5: FY2018-1Q Topics
FY2018-1Q Topics Paid search advertising revenue achieved 1 a double-digit growth YoY Established a joint venture with SoftBank Corp. 2 to expand mobile payment business Entered into capital alliances and conducted 3 share buyback to improve corporate value 5
Slide 6: Revenue
Revenue (¥Billion) Revenue of ASKUL Group ¥ 231.8 billion Revenue excluding ASKUL Group YoY +9.0% 231.8 204.2 212.7 99.9 110.5 97.2 67.6 70.5 71.8 77.5 56.6 65.5 38.8 49.2 121.9 129.6 135.7 24.4 FY2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1
Slide 7: Changed Recording Policy for Payment Fees
Changed Recording Policy for Payment Fees Starting from FY2018, part of payment fees is deducted from revenue to adapt to changes in accounting policy for revenue recognition Until FY2017-4Q FY2018-1Q onwards Revenue Revenue Payment fees Cost of Cost of sales sales Gross Gross No impact profit profi
Slide 8: Revenue Excluding Impact from Change in Recording Policy
Revenue Excluding Impact from Change in Recording Policy (¥Billion) 236.2 212.7 204.2 Adjustment YoY 99.9 110.5 231.8 +11% FY2014 FY2015 FY2016 FY2017 FY2018 1Q 1Q 1Q 1Q 1Q 8
Slide 9: Operating Income
Operating Income (¥Billion) Operating income of ASKUL Group ¥ 47.5 billion Operating income excluding ASKUL Group YoY -8.9% 50.8 52.2 49.0 48.7 49.1 47.5 42.1 37.6 38.8 32.8 34.2 29.6 23.9 18.4 51.2 47.8 48.8 13.4 FY2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1Q 1Q 1Q
Slide 10: Factors of Change in Operating Income
Factors of Change in Operating Income No change in guidance for full year operating income as expenses for new challenges are expected to increase in 2H. Gain on Increase in sales of (¥Billion) advertising shares of revenue IDC Frontier 52.2 48.2 etc. Inc. 48.7 47.5 Impact of fire Investment Media-
Slide 11: Results by Segments
Results by Segments FY2017 FY2018 YoY (￥Billion) 1Q 1Q Actual result Main factors of change Revenue 68.1 72.1 +6.0% Media Increase in paid search advertising revenue business Operating 35.8 36.7 +2.5% Income Revenue 140.7 158.4 +12.5% Increase in Shopping-related advertising ASKUL Group 83.0 96.1 +1
Slide 12: Media Business
Media Business 12
Slide 13: Number of Monthly Logged-In User IDs
Number of Monthly Logged-In User IDs (Million IDs) 44.33 YoY 27.82 30.21 34.30 39.70 +12% June June June June June 2014 2015 2016 2017 2018 13
Slide 14: Time Spent by Logged-in Users
Time Spent by Logged-in Users (Billion hours) PC+Others *1 Smartphones *2 2.3 1.9 2.1 1.6 Via smartphones 1.4 1.1 1.3 1.6 YoY 0.7 0.5 +22% FY2014 FY2015 FY2016 FY2017 FY2018 1Q 1Q 1Q 1Q 1Q Note: Time spent by users logged-in with Yahoo! JAPAN IDs for each quarter 14 *1 Time spent including accesses
Slide 15: Video Viewing Time
Video Viewing Time YoY 2x FY2017 FY2018 1Q 2Q 3Q 4Q 1Q 15 Note: Quarterly total of video viewing time in Yahoo! JAPAN services excluding GYAO!. * Survey by Yahoo Japan Corporation
Slide 16: Yahoo! News - Number of Video Views
Yahoo! News - Number of Video Views Established a system to deliver live video news for emergencies （Million） June 18 Earthquake in northern Osaka 3x Average 0 2018/1/1 2018/2/1 2018/3/1 2018/4/1 2018/5/1 2018/6/1 16 Note: No. of Yahoo! News video views includes playbacks from video tab.
Slide 17: Use of AI to Improve Yahoo! Knowledge Search
Use of AI to Improve Yahoo! Knowledge Search kukai, a super computer developed by Yahoo! JAPAN, used to auto-analyze enormous amount of contents 9 months ↓ 1 day 17 Photo: Aflo
Slide 18: Aiming for No.1 in Internet Advertising Revenue
Aiming for No.1 in Internet Advertising Revenue… 18
Slide 19: Advertising-Related Revenue
Advertising-Related Revenue (¥Billion) Display Paid search 76.4 70.4 63.3 65.3 57.8 36.9 20.9 27.1 33.1 35.7 YoY 36.8 36.2 32.2 34.7 39.5 +8% FY2014 FY2015 FY2016 FY2017 FY2018 1Q 1Q 1Q 1Q 1Q 19 Note: Includes advertising revenue recorded in Commerce Business
Slide 20: Paid Search Advertising Revenue - YoY Growth Rate
Paid Search Advertising Revenue - YoY Growth Rate +13.8% First double-digit growth 0 in 5 years FY2014 FY2015 FY2016 FY2017 FY2018 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 20
Slide 21: Factors of Growth for Paid Search Advertising
Factors of Growth for Paid Search Advertising Revenue per search improved due to several measures Until FY2017-4Q FY2018-1Q onwards Changed display design of ads (May) Clearly separated each information so that users can easily find the information they want Started offering optional function to com
Slide 22: Video Advertising Revenue via Smartphones
Video Advertising Revenue via Smartphones YoY Approx. 3x FY2017 FY2018 1Q 1Q 22
Slide 23: Launch of Video Ads on Yahoo! JAPAN Top Page App
Launch of Video Ads on Yahoo! JAPAN Top Page App Launched on July 21 Photo: Aflo 23
Slide 24: Commerce Business
Commerce Business 24
Slide 25: Commerce Business - Operating Income Trend
Commerce Business - Operating Income Trend YAHUOKU!, Membership Services, O2O, Financial & Payment businesses, etc. Yahoo! Shopping (includes revenues from advertising and payment in Yahoo! Shopping) YJ Card Corporation Expenses for YAHUOKU! measures Profitability of Yahoo! Shopping improved 0 FY201
Slide 26: 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 Transaction value expanding but “take rate” unchanged 0 FY2015 FY2016 FY2017 FY2018 1Q 3Q 1Q 3Q 1Q 3Q 1Q *1 Shop
Slide 27: Aiming for No.1 in EC Transaction Value
Aiming for No.1 in EC Transaction Value (Sale of Goods)… 27
Slide 28: Definition of EC Transaction Value from FY 2018
Definition of EC Transaction Value from FY 2018 No change from FY17 New definition from FY18 ￥880B ￥1.8T YAHUOKU! YAHUOKU! EC transaction value ￥630B (sale of goods) Yahoo! Shopping, LOHACO, Charm Shopping ￥2.1T Business EC transaction ￥230B value ASKUL BtoB ※Name changed from “Total domestic EC ￥60
Slide 29: EC Transaction Value (Sale of Goods)
EC Transaction Value (Sale of Goods) (¥Billion) ASKUL BtoB Others 469.9 Shopping business 425.8 61.6 YAHUOKU! 368.5 58.7 15.4 281.3 54.1 4.2 10.9 YoY 175.2 254.1 5.1 139.8 +10% 5.2 99.9 72.4 58.9 203.6 210.1 216.2 217.6 189.9 FY2014 FY2015 FY2016 FY2017 FY2018 1Q 1Q 1Q 1Q 1Q 29 Note: Includes transa
Slide 30: Number of Yahoo! Premium member IDs
Number of Yahoo! Premium member IDs (Million IDs) 20.43 Exceeded 9.66 10.92 12.01 16.92 20 million IDs FY2014 FY2015 FY2016 FY2017 FY2018 1Q 1Q 1Q 1Q 1Q (end of FY) Note: SoftBank members and Y!mobile members, etc., who are eligible for Yahoo! Premium privileges. Overlap in IDs is excluded. 30
Slide 31: Shopping Transaction Value
Shopping Transaction Value (¥Billion) 175.2 YoY 72.4 99.9 139.8 +25% 58.9 FY2014 FY2015 FY2016 FY2017 FY2018 1Q 1Q 1Q 1Q 1Q Note: Includes transaction values of Yahoo! Shopping, LOHACO and Charm Co., Ltd. Overlaps are excluded for transaction values of LOHACO and Charm Co., Ltd. made via 31 Yahoo! S
Slide 32: Shopping-Related Advertising Revenue
Shopping-Related Advertising Revenue (¥Billion) 7.0 YoY 5.5 +28% 2.9 0.9 1.3 FY2014 FY2015 FY2016 FY2017 FY2018 1Q 1Q 1Q 1Q 1Q Note: Total of Yahoo Japan Corporation’s non-consolidated Shopping-related advertising revenue; advertising revenue of StoreMatch, an advertising product in Yahoo! Shopping
Slide 33: Auction-Related Transaction Value
Auction-Related Transaction Value Until FY17-4Q FY18-1Q onwards YAHUOKU! Auction-related Change of transaction Other transaction value transaction value definition value YAHUOKU! YAHUOKU! Yahoo! Tickets-related Yahoo! Tickets-related Ouchi-Direct Ouchi-Direct tradecarview tradecarview BOOKOFF Online
Slide 34: YAHUOKU! Transaction Value
YAHUOKU! Transaction Value (¥Billion) 217.6 YoY 189.9 203.6 210.1 216.2 +0.6% FY2014 FY2015 FY2016 FY2017 FY2018 1Q 1Q 1Q 1Q 1Q 34 Note: Transaction value of YAHUOKU! including Yahoo! Government Auctions. Includes transaction value of ClooShe for FY2014.
Slide 35: Aiming for No.1 in Mobile Payment
Aiming for No.1 in Mobile Payment… 35
Slide 36: Company Alliance to Offer Smartphone Payment Service
3 Company Alliance to Offer Smartphone Payment Service SoftBank Investment SoftBank Group Corp. Vision Fund Consolidated subsidiary Investment Yahoo Japan SoftBank Corp. Paytm Inc. Corporation 50% owned 50% owned equity method affiliate equity method affiliate PayPay Corporation Provision of technol
Slide 37: Our Strength in Mobile Payment
Our Strength in Mobile Payment Use of SoftBank’s group synergy 1 Marketing know-how and resources Acquisition of users of both companies Leverage user base of Yahoo! Wallet 2 40 million+ accounts Mobile payment Linkage with Yahoo! JAPAN’s 100+ services transaction value 3 Monetization through data l
Slide 38: Strength of Paytm
Strength of Paytm India’s leading company in smartphone payment services 300 8 Invested by million million SoftBank Vision Fund Alibaba Group Ant Financial users merchants 38
Slide 39: Steps To Monetization
Steps To Monetization Maximize Monetization transaction value Strengthen existing businesses Advertising, e-commerce, credit card, etc. Acquire Increase merchants users Launch new businesses O2O (dining, retail, beauty, etc.) Finance (credit, securities, insurance, etc.) From 2018 39
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Slide 41: Aiming to Improve Corporate Value
Aiming to Improve Corporate Value… 41
Slide 42: Announced Share Buyback
Announced Share Buyback Strengthen collaboration with SoftBank Corp. to achieve the three No.1s Increased managerial freedom as a result of the termination of JVA between SoftBank Group Corp. and Altaba Inc. Improve capital efficiency and shareholder returns 42
Slide 43: Strengthen Tie-ups with Other Companies
Strengthen Tie-ups with Other Companies Encounter Media Ad Enjoy Explore Search Service "Conversion media" Contents Commerce Data Pay Purchase Shopping Wallet cart 43
Slide 44: Strategic Partnership with Retty Inc.
Strategic Partnership with Retty Inc. Jointly provide solutions in restaurant selection, reservation and payment 44
Slide 45: Strategic Partnership with dely, Inc.
Strategic Partnership with dely, Inc. Aiming to become No.1 in selecting recipes and purchase of food items 45
Slide 46: Collaboration with SoftBank Vision Fund
Collaboration with SoftBank Vision Fund Encounter Media Ad Enjoy Explore Search Service "Conversion media" Contents Commerce Data Pay Purchase Certain "SoftBank Vision Fund" investments described herein are subject to pending regulatory approvals. The investments described herein represent a subset
Slide 47: 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 47
Slide 48: Supplemental Information
Supplemental Information 48
Slide 49: 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 50: 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 51: Organization Chart of Yahoo Japan Corporation
Organization Chart of Yahoo Japan Corporation Chairman of the As of the end of June 2018 Board of Directors President & Representative Director / CEO Board of Directors Media Services Group Business Promotion ID Services Management Audit and (622) Group (250) Supervisory Group (263) Search Services
Slide 52: Consolidated Subsidiaries and Affiliates
Consolidated Subsidiaries and Affiliates As of the end of June 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 53: 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 53