Ly Corporation · TSE:4689
Ly — Yahoo Japan — FY2015 Earnings Presentation
71 slides from Ly's earnings presentation, Apr 28, 2016
Slide 1: Yahoo Japan Corporation FY2015 Full Year & 4Q Business Results
Yahoo Japan Corporation FY2015 Full Year & 4Q Business Results (Apr. 2015-Mar. 2016/Jan.-Mar. 2016) April 28, 2016
Slide 2: Table of Contents
Table of Contents P. 4 FY2015 Full Year Financial Highlights P. 14 FY2015-4Q Financial Highlights P. 17 Usage Trend of Services P. 22 Usage Trend of Domestic e-Commerce P. 25 Core Businesses (Advertising/Auctions/Membership Services) P. 34 Upfront Investment-Stage Businesses (Shopping/Credit Card) P
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 Full Year Financial Highlights
FY2015 Full Year Financial Highlights 4
Slide 5: Executive Summary for FY2015
Executive Summary for FY2015 Revenue 652.3 (¥B) YoY +52.2% Operating income 224.9 (¥B) YoY +14.1% Net income attributable to owners of the parent 171.6 (¥B) YoY +29.0% Diluted EPS ¥30.1 YoY +29.0% FY2015 year-end cash dividends forecast (Per share) ￥8.86 - Advertising-related revenue 266.9 (¥B) YoY
Slide 6: Executive Summary for FY2015
Executive Summary for FY2015 Advertising-Related Business -Introduction of “time-line” format on smartphone version of Yahoo! JAPAN top page,etc. was successful. -Growth of YDN and others drove the revenue growth of overall advertising revenue. e-Commerce-Related Business -e-Commerce related revenue
Slide 7: Full Year Revenue ¥652.3 billion
Full Year Revenue (¥Billion) ¥652.3 billion Up 19 consecutive years YoY +52.2% since the start of services 500 428.4 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 JGAAP IFRS JGAAP (Gross basis) JGAAP (Net basis) 7 Note: Between FY2008 and FY2012, we indicated revenue on a
Slide 8: Full Year Revenue Breakdown
Full Year Revenue Breakdown (¥Billion) 652.3 Marketing Solutions Business 60.2 YoY +6.5% Display advertising revenue grew +11.9 Includes 428.4 ASKUL’s 326.3 Consumer Business * 48.2 +197.7 revenue* YoY 2.5x 128.6 Consolidation of ASKUL Corporation Other Businesses 260.3 +16.9 277.3 YoY +24.9% Consol
Slide 9: Full Year Operating Income ¥224.9 billion
Full Year Operating Income (¥Billion) ¥224.9 billion Up 19 consecutive years YoY +14.1% since the start of services 197.2 200 100 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 JGAAP IFRS Note: Operating income for FY2015 includes gain from remeasurement relating to busine
Slide 10: Full Year Operating Income excluding One-Time Impact
Full Year Operating Income excluding One-Time Impact FY2014 Operating Income (Actual) 197.2 YoY FY2015 Adjusted Operating Income 198.0 up Upfront investment (Sales promotional cost) 28.2 Other one-time expenditure (costs related to relocation of head office, etc.) 4.4 Gain from remeasurement relatin
Slide 11: Full Year Sales Promotional Activities
Full Year Sales Promotional Activities Issuance and consumption of points exceeded our expectation due to the favorable growth in shopping business. (¥Billion) Contributors to the increase in sales promotion costs FY2014 FY2015 (compared to the same quarter last year)(*1) Shopping 50％ Promotion of a
Slide 12: Full Year Net Income Attributable to the Owners of the Parent
Full Year Net Income Attributable to the Owners of the Parent (¥Billion) ¥171.6 billion 200 Up 19 consecutive years YoY +29.0% since the start of services 133.0 100 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 JGAAP IFRS 12
Slide 13: Full Year Consolidated Cash Flows
Full Year Consolidated Cash Flows Spent cash efficiently for new capital alliances and shareholders’ return. Cash and Cash Equivalents Beginning of FY2015 503.9 ・ Income before income taxes Operating activities 105.4 ・ Payment of income taxes, etc. ・ Expense to acquire the control over Investing act
Slide 14: FY2015-4Q Financial Highlights
FY2015-4Q Financial Highlights 14
Slide 15: Executive Summary for FY2015-4Q
Executive Summary for FY2015-4Q Revenue 207.0 (¥B) YoY +76.0％ Operating income 29.9 (¥B) YoY -42.9％ Net income attributable to owners of the parent 18.0 (¥B) YoY -45.1％ Diluted EPS ¥3.1 YoY -45.1％ Via smartphones Advertising-related revenue 71.7 (¥B) YoY +3.5％ 44.1% Paid search advertising 34.6 (¥B)
Slide 16: Quarterly Revenue Breakdown
Quarterly Revenue Breakdown (¥Billion) 207.0 Marketing Solutions Business 14.6 YoY +2.7% Includes Display advertising revenue grew +0.1 ASKUL’s 117.6 121.2 revenue and Consumer Business * others* 14.4 +88.1 YoY 3.7x 33.0 Consolidation of ASKUL Corporation Other Businesses +1.9 72.5 74.5 YoY +1.0% Co
Slide 17: Usage Trend of Services
Usage Trend of Services 17
Slide 18: Daily Unique Browsers
Daily Unique Browsers PC+Others *1 Smartphones *2 (Million) 51.43 40.94 Usage via smartphones 27.09 YoY +25.6% FY2013 FY2014 FY2015 *1 Yearly average; includes PCs, tablets and feature phones. *2 Yearly average; includes accesses to Yahoo! JAPAN via applications and browsers. Access 18 via applicati
Slide 19: Number of Monthly Active User IDs
Number of Monthly Active User IDs (Million) 33.90 Exceeded 30 million 28.49 29.90 through an aggressive promotion of logged-in usage 2014 2015 2016 March March March 19 Note: Monthly number of logged-in Yahoo! JAPAN IDs.
Slide 20: Number of Cumulative Downloads of Apps
Number of Cumulative Downloads of Apps *1 380 (Million) 2015 Ranking of downloads for domestic application publishers *2 (excluding game applications): No.1 for two 160 270 consecutive years FY2013 FY2014 FY2015 4Q 4Q 4Q *1 Cumulative numbers of downloads of iOS and Android applications published by
Slide 21: Number of Clicks on Smartphone Top Page Advertisings
Number of Clicks on Smartphone Top Page Advertisings * Introduction of timeline-view Introduction of In-feed Advertising in timeline-view increased the number of clicks 2.2x Old format smartphone In-feed Advertising advertising 21 * Comparison between the number of clicks on YDN which was listed on
Slide 22: Usage Trend of Domestic e-Commerce
Usage Trend of Domestic e-Commerce 22
Slide 23: Total Domestic e-Commerce Transaction Value
Total Domestic e-Commerce Transaction Value Auction-related *1 Shopping-related *2 ASKUL *3 (¥Billion) 1,505.9 Achieved transaction value of 116.8 1,190.8 1,106.9 ¥1.5 trillion 353.7 372.7 +40.1％ 522.3 for the first time, due to successful 866.7 753.2 818.1 +5.9％ e-commerce strategies FY2013 FY2014
Slide 24: Shopping Transaction Value – YoY Growth Rate
Shopping Transaction Value –YoY Growth Rate +61.8% +48.3% Growth rate accelerated to +30.2% YoY +61.8% +23.1% FY2015 1Q 2Q 3Q 4Q Note: Includes transaction values of Yahoo! Shopping and LOHACO. 24 LOHACO’s transaction value is the revenue (closing date: 20th of every month) of LOHACO business, opera
Slide 25: Core Businesses
Core Businesses Advertising Auctions Membership Services 25
Slide 26: Advertising-Related Revenue
Advertising-Related Revenue (¥Billion) Display Paid search 266.9 249.8 232.5 81.7 97.7 +29.4％ 126.4 YDN is the growth driver 150.8 152.0 -7.7％ 140.4 of Display advertising FY2013 FY2014 FY2015 26
Slide 27: Proportion of Advertising-Related Revenue via Smartphones
Proportion of Advertising-Related Revenue via Smartphones 44.1% 35.9% 26.6% Exceeded 40% for the first time in 4Qs FY2013 FY2014 FY2015 4Q 4Q 4Q Note: Proportion of advertising revenue via smartphone in total advertising revenue. 27 The prior data have been retroactively adjusted. Contains a part of
Slide 28: Core Businesses
Core Businesses Advertising Auctions Membership Services 28
Slide 29: Auction-Related Transaction Value YoY Growth Rate
Auction-Related Transaction Value *1 – YoY Growth Rate Revised system usage fees for individual sellers *2 10% Even after the revision of system usage fees for individual sellers, 0% transaction value continues to grow -10% Oct. Nov. Dec. Jan. Feb. Mar. 2015 2016 *1 Includes transaction values of YA
Slide 30: Usage Ratio of Yahoo! ezPay
Usage Ratio of Yahoo! ezPay Waived settlement fees for buyers After the waiver of settlement fees, 50% usage ratio of Yahoo! ezPay hiked 0% Oct. Nov. Dec. Jan. Feb. Mar. 2015 2016 Note: Settlement fees for a successful bid paid by a buyer have been waived for 30 auctions settled using “Yahoo! ezPay”
Slide 31: Core Businesses
Core Businesses Advertising Auctions Membership Services 31
Slide 32: Launched Premium GYAO!
Launched Premium GYAO! Started Subscription Video on Demand (SVOD) services on Feb. 23, 2016. Name of GYAO! Premium GYAO! service Fees ¥800/month ¥500/month for Yahoo! Premium members (Fees do not include consumption tax) Free of charge Special Unlimited viewing of exclusive features contents 32
Slide 33: Number of Monthly Paid-Membership IDs
Number of Monthly Paid-Membership IDs Revision of Premium membership fee （Million） Premium members 16.34 16.73 Number of members remained stable 10 even after the raise in monthly fees for Yahoo! Premium membership 0 Oct. Nov. Dec. Jan. Feb. Mar. 2015 2016 Note: Number of monthly paid-membership IDs
Slide 34: Upfront Investment-Stage Businesses
Upfront Investment- Stage Businesses Shopping Credit Card 34
Slide 35: Special Features of Yahoo! Shopping
Special Features of Yahoo! Shopping Differentiated by unique advantages and synergies with other Yahoo! JAPAN services Comprehensive Advantages Large number of protection unique to Yahoo! Yahoo! Protection provides items “Safe Shopping Protection”, Shopping a protection service offered only to membe
Slide 36: Number of Items in Yahoo! Shopping
Number of Items in Yahoo! Shopping （Million） 200 Largest in Japan* along with number of 160 stores 90 FY2013 FY2014 FY2015 Note: Number of items listed on “Yahoo! Shopping” at each fiscal year end. * Survey by Yahoo! JAPAN 36
Slide 37: Shopping Transaction Value
Shopping Transaction Value （¥Billion） 112.8 Special demand before tax hike Exceeded ¥100 billion for the first time in 4Qs 71.6 69.7 FY2013 FY2014 FY2015 4Q 4Q 4Q Note: Includes transaction values of Yahoo! Shopping and LOHACO. LOHACO’s transaction value is the revenue (closing date: 20th of every m
Slide 38: Shopping Transaction Value – YoY Growth Rate
Shopping Transaction Value –YoY Growth Rate Termination of “Everyone Everyday 5% Point Campaign” Even after the termination of some campaigns, 50% maintained a growth rate of more than YoY +50% 0% Oct. Nov. Dec. Jan. Feb. Mar. 2015 2016 Note: Includes transaction values of Yahoo! Shopping and LOHACO
Slide 39: Proportion of Transaction Value from Yahoo! Premium Members
Proportion of Transaction Value from Yahoo! Premium Members Premium members Non-premium members Campaigns targeting 57% Yahoo! Premium members 42% 43% contributed to growth FY2013 FY2014 FY2015 4Q 4Q 4Q Note: Transaction value of “Yahoo! Shopping”. 39
Slide 40: Use of Yahoo! Shopping by Yahoo! Premium Members
Use of “Yahoo! Shopping” by Yahoo! Premium Members Large room for Buyers growth in the transaction value from Premium members Non-buyers Note: Proportion of Premium members (average monthly figure) who used “Yahoo! 40 Shopping” during FY2015-4Q.
Slide 41: Shopping-Related Advertising Revenue
Shopping-Related Advertising Revenue (¥Billion) 2.6 YoY 2.3 x 1.1 0.9 FY2013 FY2014 FY2015 4Q 4Q 4Q Note: Total of Yahoo Japan Corporation’s non-consolidated Shopping-related advertising revenue; advertising revenue of “Store Match”, an advertising product in Yahoo! Shopping sold by ValueCommerce Co
Slide 42: Upfront Investment-Stage Businesses
Upfront Investment- Stage Businesses Shopping Credit Card 42
Slide 43: Number of Valid Credit Card Holders
Number of Valid Credit Card Holders Launched Yahoo! JAPAN Card (Million) 2.21 YoY 3.7 x 0.61 0.59 FY2013 FY2014 FY2015 Note: Number of valid card holders is the actual number at fiscal year end. Includes card holders of 43 KC Card, Yahoo! JAPAN Card and SoftBank Card (“Omakase charge”).
Slide 44: Credit Card Transaction Value
Credit Card Transaction Value (¥Billion) Launched Yahoo! JAPAN Card 84.7 YoY 5.7 x 15.9 14.7 FY2013 FY2014 FY2015 4Q 4Q 4Q Note: Excludes cash advance service. Includes card holders of KC Card, Yahoo! 44 JAPAN Card and SoftBank Card (“Omakase charge”).
Slide 45: Mid-Term Growth Strategies and Plans for FY2016
Mid-Term Growth Strategies and Plans for FY2016 45
Slide 46: Integration of Applications
Integration of Applications Create “Flagship applications” and enhance the competitiveness of (images) services. Top Page Application 46
Slide 47: Expansion of Monetization Opportunities in Financial and Payment Business
Expansion of Monetization Opportunities in Financial and Payment Business Aim to retain payment functions within Yahoo Japan group along with the expansion of e-commerce services. Usage ratio of e-Commerce payment services In-house offered by Yahoo! transaction value *1 JAPAN group payment ratio *2
Slide 48: FY2016 Sales Promotional Activities
FY2016 Sales Promotional Activities (¥Billion) 40 30 Intensive 20 investments in cost effective 10 measures 0 FY2014 FY2015 FY2016 Actual Actual Plan 48 Note: Total of sales promotion costs, and advertising and promotional expenses. Amount for FY2016 is the planned value as of April 28, 2016. Impact
Slide 49: FY2016 KPI Targets of Upfront Investment-Stage Businesses
FY2016 KPI Targets of Upfront Investment-Stage Businesses Shopping-Related Transaction Value Credit Card Transaction Value (¥Billion) (¥Billion) Aim to maintain a YoY Aim to increase the transaction growth rate similar to value along with the increase in number of valid card holders. FY2015. 218.9 3
Slide 50: Business Results Supplemental Information
Business Results Supplemental Information P. 51 FY2015 Business Results P. 57 FY2015-4Q Business Results P. 64 Business Data P. 67 Organization, Personnel and Affiliated Companies 50
Slide 51: FY2015 Business Results
FY2015 Business Results 51
Slide 52: FY2015 Statements of Income
FY2015 Statements of Income Increase/ FY2014 FY2015 Change decrease Revenue (¥Billion) 428.4 652.3 223.8 +52.2% (Reference) Revenue (Excluding ASKUL Corporation) (¥Billion) 428.4 463.3 34.8 +8.1% Cost of Sales (¥Billion) 85.5 247.3 161.8 +189.3% Gross Profit (¥Billion) 342.9 404.9 61.9 +18.1% SG&A a
Slide 53: FY2015 Operating Expenses
FY2015 Operating Expenses (¥Billion) Increase/ FY2014 FY2015 Change Major Factors for YoY Changes decrease Consolidation of ASKUL Corporation. Increase due to changes Cost of Sales 85.5 247.3 161.8 +189.3% in the terms of agreements related to search system usage. Total SG&A 145.7 239.6 93.8 +64.4%
Slide 54: FY2015 Statements of Financial Position
FY2015 Statements of Financial Position (¥Billion) Increase/ Increase/ 2015/3/31 2016/3/31 2015/3/31 2016/3/31 decrease decrease <Assets> <Liabilities> Current Assets 741.8 806.3 64.5 Current Liabilities 239.7 366.0 126.2 Cash and Cash Equivalents 503.9 449.1 -54.7 *1 *2 *3 *4 Trade and Other Payabl
Slide 55: FY2015 Statements of Cash Flows
FY2015 Statements of Cash Flows Major Items FY2015 (¥Billion) Operating Activities 105.4 Income before Income Taxes 226.5 Depreciation and Amortization 30.6 Gain from Remeasurement Relating to Business Combination -59.6 Consolidation of ASKUL Corporation Increase/Decrease in Trade and Other Receivab
Slide 56: FY2015 Investment Records
FY2015 Investment Records Total amount of investments : approx. 110.0 billion yen Major investments Ratio of Companies Date voting rights Skyscanner Japan K.K. July 2015 49.0% Dynatech inc. July 2015 100.0% Sony Real Estate Corporation July 2015 43.7% BuzzFeed Japan Corporation Aug. 2015 49.0% SoldO
Slide 57: FY2015 Quarterly Business Results
FY2015 Quarterly Business Results 57
Slide 58: FY2015-4Q Statements of Income
FY2015-4Q Statements of Income Increase/ 14/4Q 15/4Q Change Decrease Revenue (¥Billion) 117.6 207.0 89.3 +76.0% (Reference) Revenue (Excluding ASKUL Corporation) (¥Billion) 117.6 122.7 5.0 +4.3% Cost of Sales (¥Billion) 23.4 92.9 69.5 +297.2% Gross Profit (¥Billion) 94.2 114.0 19.8 +21.0% SG&A and o
Slide 59: FY2015-4Q Operating Expenses
FY2015-4Q Operating Expenses QoQ YoY 14/4Q 15/3Q 15/4Q Major Factors for YoY Changes (¥Billion) Change Change Consolidation of ASKUL Corporation. Increase due to changes Cost of Sales 23.4 86.8 92.9 +7.0% +297.2% in the terms of agreements related to search system usage. Total SG&A 41.8 66.4 84.1 +2
Slide 60: FY2015-4Q Statements of Cash Flows
FY2015-4Q Statements of Cash Flows Major Items 15/4Q (¥Billion) Operating Activities 29.9 Income before Income Taxes 28.1 Depreciation and Amortization 9.8 Increase/Decrease in Trade and Other Receivables/Payables -7.1 Increase/Decrease in Other Current Assets and Liabilities 6.8 Increase/Decrease i
Slide 61: 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: CRM-related services, Recruiting-related services and others ・Personal Services: Video-r
Slide 62: 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) *1 Small and Yahoo! Display medium-sized Ad Network Text / Banner compa
Slide 63: Revenue Trends by Advertising Products
Revenue Trends by Advertising Products 14/4Q 15/1Q 15/2Q 15/3Q 15/4Q Indicator Unit (Jan.-Mar.) (Apr.-Jun.) (Jul.-Sep.) (Oct.-Dec.) (Jan.-Mar.) Total advertising revenue Billion yen 69.3 63.3 65.7 66.0 71.7 YoY Change % +8.4% +9.5% +8.6% +6.3% +3.5% Paid search advertising revenue Billion yen 39.7 3
Slide 64: Quarterly Business Data (1)
Quarterly Business Data (1) 14/4Q 15/1Q 15/2Q 15/3Q 15/4Q YoY Indicator (Quarterly average) Unit (Jan.-Mar.) (Apr.-Jun.) (Jul.-Sep.) (Oct.-Dec.) (Jan.-Mar.) Change Number of total monthly page views Million 61,969 64,990 68,102 63,147 66,704 +7.6% Number of total monthly smartphone page views *1 Mil
Slide 65: Quarterly Business Data (2)
Quarterly Business Data (2) 14/4Q 15/1Q 15/2Q 15/3Q 15/4Q YoY Indicator (Quarterly total) Unit (Jan.-Mar.) (Apr.-Jun.) (Jul.-Sep.) (Oct.-Dec.) (Jan.-Mar.) Change Billion Auction-related transaction value *1 yen 209.0 208.8 203.2 233.6 221.0 +5.8% Billion Shopping-related transaction value *2 yen 96.
Slide 66: Quarterly Transaction Value YoY Growth Trend
Quarterly Transaction Value of Shopping-related and Auction-related business YoY Growth Trend 70% 60% 50% 40% Special demand before tax hike 30% 20% 10% 0% New e-commerce strategies introduced Impact of special demand before tax hike -10% 12/4Q 13/1Q 13/2Q 13/3Q 13/4Q 14/1Q 14/2Q 14/3Q 14/4Q 15/1Q 1
Slide 67: Organization Chart of Yahoo Japan Corporation
Organization Chart of Yahoo Japan Corporation President & Representative Director / As of April 1, 2016 CEO SEVPCO / COO SEVPCO / CFO Board of Directors Media & Marketing System Management Audit and Supervisory Solutions Group Corporate Committee Group (825) Management Group Media Company Data & Sci
Slide 68: Number of Directors and Employees
Number of Directors and Employees (at the End of Quarter) (Number of People) 10,000 5,000 0 13/3 13/6 13/9 13/12 14/3 14/6 14/9 14/12 15/3 15/6 15/9 15/12 16/3 Directors and Auditors of 35 30 33 31 30 30 38 33 33 33 61 61 54 Subsidiaries Employees of 1,938 1,620 1,660 1,658 1,684 1,695 1,421 1,352 1
Slide 69: Consolidated Subsidiaries and Associates
Consolidated Subsidiaries and Associates (as of March 31, 2016) Major consolidated subsidiaries ASKUL Corporation Carview Corporation Dynatech inc. ecohai Co., Ltd. FirstServer, Inc. GYAO CORPORATION IDC Frontier Inc. Ikyu Corporation Netrust, Ltd Synergy Marketing, Inc. Valu
Slide 70: Corporate Governance Structure
Corporate Governance Structure 70
Slide 71: YAHOO! JAPAN
YAHOO! JAPAN