Ly Corporation · TSE:4689
Ly — Yahoo Japan — Q3 FY2015 Earnings Presentation
74 slides from Ly's earnings presentation, Feb 2, 2016
Slide 1: FY2015-3Q Business Results
Yahoo Japan Corporation FY2015-3Q Business Results (October - December 2015) February 2, 2016
Slide 2: Table of Contents
Table of Contents P. 4 FY2015-3Q Financial Highlights P. 17 Key Performance Indicators P. 23 Core Businesses (Advertising/Membership Services/Auctions) P. 40 Upfront Investment-Stage Businesses (Shopping/Credit Card) P. 56 In Pursuit of Further Growth P. 60 Business Results Supplemental Information
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: FY2015-3Q Financial Highlights
FY2015-3Q Financial Highlights 4
Slide 5: Executive Summary for FY2015-3Q
Executive Summary for FY2015-3Q Revenue 196.4 (¥B) YoY +82.6% Operating income 43.1 (¥B) YoY -13.7% Net income attributable to owners of the parent 28.7 (¥B) YoY -14.0% Diluted EPS ¥5.06 YoY -14.0% Advertising-related revenue 66.0 (¥B) YoY +6.3% Via smartphones 41.4% Paid search advertising 33.4 (¥B
Slide 6: Executive Summary for FY2015-3Q
Executive Summary for FY2015-3Q Advertising-Related Business -Advertising revenue via smartphones increased steadily. (YoY +30.4%) -Revenue from YDN and others continued to grow favorably. (YoY +52.2%) -Paid search advertising revenue via PC is on a downward trend. e-Commerce-Related Business -Shopp
Slide 7: Strengthening sales promotion in 2H is an investment for mid- to long-term growth
Strengthening of sales promotional activities in 2H is an investment to accelerate mid- to long-term profit growth Expansion of Strengthening Expansion of Financial and of e-Commerce Payment media power business business All measures have been conducted as planned and achieved projected outcomes. 7
Slide 8: Increased sales promotion-related costs by ¥9 billion YoY
Increased sales promotion-related costs (*1) by ¥9 billion YoY to step up sales promotion (¥Billion) 149億円 14.9 Rough breakdown: Shopping business ¥5 billion Approx. 9 Apps-related ¥2 billion Auctions business ¥1 billion Financial & Payment ¥1 billion 4.3 43億円 Others *3 Business, etc. *2 Total Appro
Slide 9: Shopping transaction value growth accelerated
Growth rate of shopping business transaction value dramatically accelerated due to synergies between “improvement of sales platform” and “customer attraction” YoY +48.3% 11.5% 3.3% FY2013 FY2014 FY2015 3Q 3Q 3Q 9 Note: Transaction values of Yahoo! Shopping and LOHACO. LOHACO’s transaction value is t
Slide 10: Number of valid credit card holders increased steadily
Number of valid credit card holders also increased steadily 1.8 million Number of valid card holders increased 3x after the consolidation of 0.6 YJ Card Corporation. million FY2014 FY2015 4Q 3Q 10 Note: Number of valid card holders is the actual number at each quarter end, and includes card holders
Slide 11: Tender offer for shares of Ikyu Corporation
Tender offer for shares, etc., of Ikyu Corporation Aim to make it a wholly-owned subsidiary Aim to offer online lodging and restaurant ・Acquisition cost: Approx. ¥100 billion reservation services, meeting customer (planned) segments and usage scenes. ・Ikyu’s brand name and domain will be maintained.
Slide 12: Revenue
Revenue (¥Billion) ¥196.4 billion YoY +82.6% 200 100 107.5 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q JGAAP (Gross basis) JGAAP (Net basis) IFRS 12 Note: Between FY2008 and FY2012, we indicated revenue on a net rather than gros
Slide 13: Operating Income
Operating Income (¥Billion) Conducted proactive sales promotional activities ¥43.1 billion 60 YoY -13.7% Impact of upfront investment of 50 sales promotion-related costs etc. (Approx. ¥9 billion*) 40 30 49.9 20 10 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 3Q 3Q 3Q 3Q
Slide 14: Net Income Attributable to Owners of the Parent
Net Income Attributable to Owners of the Parent (¥Billion) ¥28.7 billion 60 YoY -14.0% 50 40 30 20 33.4 10 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q JGAAP IFRS 14
Slide 15: Quarterly Revenue Breakdown
Quarterly Revenue Breakdown (¥Billion) 196.4 Marketing Solutions Business 16.1 YoY +5.2% Display advertising revenue grew +4.1 Includes ASKUL’s revenue* 107.5 115.3 Consumer Business * 12.0 32.7 +82.5 YoY 3.5x Consolidation of ASKUL Corporation 64.9 +3.3 68.3 Other Businesses YoY +34.1% FY2014 FY201
Slide 16: Quarterly Margin
Quarterly Margin -Change in margin level due to increase in consolidated subsidiaries with different business models. -Profit margin of core businesses is maintained, but aggressive sales promotional activities for investment-stage businesses temporarily lowered their profit margins. Adopted Operati
Slide 17: Key Performance Indicators
Key Performance Indicators 17
Slide 18: Past and Coming Three Years
Past and Coming Three Years The past 3 years The coming 3 years Expanding smartphone Expanded service usage via applications usage and enhanced profitability in ＋ Expanding total domestic smartphones e-commerce transaction value 18
Slide 19: Daily Unique Browsers
Daily Unique Browsers PC + others*1 PC+その他 Smartphones*2 スマートフォン (Million) (Quarterly average) Usage via smartphones has 42.43 50.61 Approx. 60% 28.07 been spreading steadily YoY +19.3% FY2013 FY2014 FY2015 3Q 3Q 3Q *1 Includes PCs, tablets and feature phones. 19 *2 Includes accesses to Yahoo! JAPAN
Slide 20: Number of Monthly Active User IDs
Number of Monthly Active User IDs (Million) (Quarterly average) Promoted log-in during usage of 27.62 28.89 31.91 services FY2013 FY2014 FY2015 3Q 3Q 3Q 20 Note: Number of Yahoo! JAPAN IDs logged-in in each month.
Slide 21: Total Domestic e-Commerce Transaction Value
Total Domestic e-Commerce Transaction Value Ongoing strategies Auction-related *1 Shopping-related *2 ASKUL *3 progressing steadily (¥Billion) 429.1 50.1 Since Oct. 2013 Made steady efforts to improve the sales 324.5 platform and improved service quality 145.3 102.8 +41.4% In and after 1H FY2015 Poi
Slide 22: Our Primary Revenue Sources
Our Primary Revenue Sources Upfront investment-stage Core businesses businesses Advertising Shopping Membership services Auctions Credit card 22
Slide 23: Core Businesses
Core Businesses Advertising Membership Services Auctions 23
Slide 24: Quarterly Advertising-Related Revenue
Quarterly Advertising-Related Revenue Display Paid search YoY +6.3% (¥Billion) 66.0 62.1 24.8 +31.4% 32.6 Growth in display advertising 37.2 -10.4% 33.4 YDN continues to be a major growth driver FY2014 FY2015 3Q 3Q 24
Slide 25: Advertising Revenue YoY Growth Trend
Quarterly Advertising-Related Revenue YoY Growth Trend 40% Display advertising Display Paid search +32.8% +31.4% +29.5% 30% +21.0% +19.2% 20% 10% +0.6% -2.1% -1.8% 0% -5.4% -10.4% -10% -20% 25
Slide 26: Advertising-Related Revenue via Smartphones
Advertising-Related Revenue via Smartphones Smartphone advertising revenue YOY +30.4% (¥Billion) Ratio of advertising revenue via smartphones 13.4 20.9 27.3 41.4% FY2013 FY2014 FY2015 3Q 3Q 3Q 26 Note: Smartphone advertising revenue includes some revenue via tablet devices.
Slide 27: Core Businesses
Core Businesses Advertising Membership Services Auctions 27
Slide 28: Number of Monthly Paid-Membership IDs
Number of Monthly Paid-Membership IDs Monthly paid-membership IDs including Yahoo! Premium members was 16.34 million IDs. (Million) 15.07 16.34 14.60 FY2013 FY2014 FY2015 (At quarter-ends) 3Q 3Q 3Q Note: Number of monthly paid-membership IDs is the total of membership IDs of Yahoo! Premium members,
Slide 29: Yahoo! Premium Members
Yahoo! Premium Members Revision of monthly membership fee from ¥380 to ¥462 *1 Strengthening of “Safe shopping protection” Enrich benefits tailored to ＋ the needs of members and Provision of points promote further use of Yahoo! YAHUOKU! e-Commerce約 70% services. Shopping 3% of purchase 5% of purchas
Slide 30: Core Businesses
Core Businesses Advertising Membership Services Auctions 30
Slide 31: Auction-Related Transaction Value
Auction-Related Transaction Value Annual transaction value 10,000 (¥Billion) 818.1 685.9 753.2 Annual transaction value is over 4Q ¥800 billion, 5,000 500 yet maintains mid- to high-single digit growth rate. 1Q-3Q 1Q-3Q 0 FY2012 FY2013 FY2014 FY2015 31 Note: Includes transaction values of YAHUOKU!,
Slide 32: Promotion of Application Usage
Promotion of Application Usage Transaction value from apps YoY +46% In addition to existing strengths, continued to make functional improvements to enhance convenience Overwhelming Easy Easy number of products ＋ listing ＋ transaction 0 2014 2015 Dec. Dec. 32 Note: Transaction value of YAHUOKU!, excl
Slide 33: Sales Promotional Activities in 3Q
Sales Promotional Activities in 3Q ・Created value-for-money shopping chances ・Good shopping day YoY growth in transaction value *1 +84% ・Transaction value for the target period achieved a new record high! ・Year-end sale YoY growth in transaction value *2 +7% Nov.11 Good shopping day YAHUOKU! Year-en
Slide 34: YAHUOKU!'s growth is sustainable
YAHUOKU!’s growth is sustainable Existent market ＋ Potential market Reuse market Used real estate market Approx. Approx. *1 ¥1.5 trillion ¥4 trillion*3 Approx. Reuse market ¥ 8 trillion *4 Used auto market Approx. ¥3 trillion Approx. ¥2.6 trillion*2 *1 Source: “Reuse business data book 2015” (Estima
Slide 35: Measures to be focused on
Measures to be focused on: 1. Refine easier-to-trade environment 2. Excavate goods buried in homes 3. Develop auto and real estate markets 35
Slide 36: Refine Easier-To-Trade Environment
1. Refine Easier-To-Trade Environment Enhance convenience for both buyers and sellers Revision of system usage fee for sellers *1 Payment Delivery Listing Waived settlement Attained fuss-free Improved and fee for buyers *2 and cheap delivery *3 strengthened system (Increased no. of images, etc.) *1
Slide 37: Excavate Goods Buried in Homes
2. Excavate Goods Buried in Homes Promoted the integration between real and Internet worlds as a first step Partnership with BOOKOFF stores is showing a steady growth No. of goods sold both in BOOKOFF Transaction value for goods stores and YAHUOKU! (Dec.) *1 sold both in BOOKOFF stores and YAHUOKU!
Slide 38: Develop Auto and Real Estate Markets
3. Develop Auto and Real Estate Markets Promote to go online Alliance with Alliance with Sony Real Estate JAPAN AUTOMOBILE AUCTION INC., HAA Kobe Inc. Corporation Provide value-for-money and A new real estate transaction reliable autos in the eyes of buyers, platform where apartments can be through
Slide 39: YAHUOKU! will expand the potential of reuse market
As a pioneer, YAHUOKU! will expand the potential of reuse market 39
Slide 40: Upfront Investment-Stage Businesses
Upfront Investment- Stage Businesses Shopping Credit Card 40
Slide 41: Shopping Transaction Value
Shopping Transaction Value (Yahoo! Shopping + LOHACO) Quarterly transaction value Quarterly YoY changes (¥Billion) FY2013 FY2014 FY2015 50% +48% 40% 100 30% +30% +23% 20% 50 10% 0% -10% 0 FY2013 FY2014 FY2015 1Q 2Q 3Q 4Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 41 Note: Includes transaction values of Yahoo! Shopp
Slide 42: Strategies
Strategies More Tougher Improved price products competition competitiveness and quality Strategies implemented in Oct. 2013 More Attractive platform sellers Advertising for buyers -related revenue Improved purchase conversion rate Larger More transaction value buyers 42
Slide 43: Measures to be focused on
Measures to be focused on: 1. Enhance product lineup 2. Sales promotions 3. Link with membership base 43
Slide 44: Enhance Product Lineup
1. Enhance Product Lineup Number of store IDs * Number of items listed (Thousand) YOY +54% (Million) YOY +29% 370 180 240 140 FY2014 FY2015 FY2014 FY2015 3Q 3Q 3Q 3Q (At quarter-ends) 44 * Number of corporate and individual accounts issued. Includes number of accounts still in preparation for the op
Slide 45: Sales Promotions
2. Sales Promotions Nov.11 Good shopping day Transaction value YoY Approx.7x Yahoo! JAPAN site image 45 Note: Includes only transaction value of Yahoo! Shopping and LOHACO. as of Nov. 11, 2015 Comparison between Nov. 11, 2014 and Nov. 11, 2015.
Slide 46: T Points, 5% of purchase price
2. Sales Promotions T Points, 5% of purchase price, for everyone, everyday 46 Note: Information as of February 2, 2016
Slide 47: Yahoo! JAPAN 20th Anniversary Sale
2. Sales Promotions Yahoo! JAPAN 20th Anniversary Sale (Planned) 47
Slide 48: Link with Membership Base
3. Link with Membership Base Strengthen synergies with other membership services Promote the cross-use of services to increase buyers Yahoo! Yahoo! JAPAN Premium Card members holders SoftBank T Point subscribers members 48 Shopping
Slide 49: Outcome of Measures – Yahoo! Premium membership link
Outcome of Measures – Link with Yahoo! Premium membership Transaction value of Yahoo! Premium Ratio of transaction value of Yahoo! Premium members (*) YoY growth rate members to total transaction value * (¥Billion) Dec. 2015 +104% Dec. 2015 55% 40 100% Transaction value of Yahoo! Premium members Yah
Slide 50: Outcome of Measures – platform attractiveness indices
Outcome of Measures – Indices that exhibit the attractiveness of the shopping platforms improved Average number of orders per month Repeat purchase ratio per customer *1 in the following month *2 3 Dec. 2015 Comparison between Jan. 2015 and Nov. 2015 2 YOY +21% +16% points 16%pt 2 1 1 0 2015 2015 20
Slide 51: Shopping-Related Advertising Revenue
Shopping-Related Advertising Revenue (¥Billion) 3.0 1.3 YOY 2.3X FY2014 FY2015 3Q 3Q Note: Total of advertising revenue in Consumer Business segment; advertising revenue of “Store Match”, an advertising product in Yahoo! Shopping sold by ValueCommerce Co., Ltd. to 51 stores in Yahoo! Shopping; and r
Slide 52: Grow into a value-for-money platform
Grow into a value-for-money platform where shoppers can find whatever they want 52
Slide 53: Upfront Investment-Stage Businesses
Upfront Investment- Stage Businesses Shopping Credit Card 53
Slide 54: Progress in Credit Card Business
Progress in Credit Card Business Number of valid card holders increased steadily on schedule to achieve the planned number for the end of FY2015. 2.2 million (Planned value as of Feb. 2, 2016) (Million) 1.8 1.4 1.0 0.6 FY2014 FY2015 FY2015 FY2015 FY2015 4Q 1Q 2Q 3Q 4Q 54 Note: Number of valid card h
Slide 55: Trends in Card Transaction Value
Trends in Card Transaction Value (¥Billion) QoQ +62.1% 50 0 FY2014 FY2015 1Q 2Q 3Q 4Q 1Q 2Q 3Q 55 Note: Excludes cash advance service. Consolidation of YJ Card Corporation
Slide 56: In Pursuit of Further Growth
In Pursuit of Further Growth Efficient sales promotional activities with a focus on ROI will be continued in 4Q. 56
Slide 57: Sales Promotions in the 2nd Half of FY2015
Sales Promotions in the 2nd Half of FY2015 Proactively continue mainly with measures that were successful in 3Q. (¥Billion) FY2014 FY2015 Approx. 30.0 (Planned value as of Feb. 2, 2016) 9.7 9.3 4.0 4.2 4.6 0 1Q 2Q 2nd half Actual results Planned value for FY2015 57 Note: Total of sales promotion cos
Slide 58: Goals for Major Businesses
Goals for Major Businesses Larger domestic transaction value e-Commerce ・Shopping business Maintain the growth rate (YoY) for FY2015 3Q in 4Q More users of financial and payment-related services Financial and ・Credit Card business Payment 2.2 million valid card holders by the end of FY2015 Stronger
Slide 59: Cross-use of e-Commerce/Payment/Membership services
Promote the cross-use of e-Commerce/Payment/Membership services to Yahoo! JAPAN users e-Commerce-related Yahoo! JAPAN’s media-related services Premium membership Financial and Payment-related 59 (Concept image)
Slide 60: Business Results Supplemental Information
Business Results Supplemental Information P. 61 FY2015-3Q Business Results P. 68 Business Data P. 71 Organization, Personnel and Affiliated Companies 60
Slide 61: FY2015-3Q Statements of Income
FY2015-3Q Statements of Income Increase/ 14/3Q 15/3Q Change Decrease Revenue (¥Billion) 107.5 196.4 88.8 +82.6% (Reference) Revenue (Excluding ASKUL Corporation) (¥Billion) 107.5 116.4 8.9 +8.3% Cost of Sales (¥Billion) 21.7 86.8 65.1 +299.4% Gross Profit (¥Billion) 85.8 109.5 23.7 +27.7% SG&A and o
Slide 62: FY2015-3Q Operating Expenses
FY2015-3Q Operating Expenses QoQ YoY 14/3Q 15/2Q 15/3Q Major Factors for YoY Changes (¥Billion) Change Change Consolidation of ASKUL Corporation. Increase due to changes Cost of Sales 21.7 43.3 86.8 +100.2% +299.4% in the terms of agreements related to search system usage. Total SG&A 35.8 51.8 66.4
Slide 63: FY2015-3Q Statements of Financial Position
FY2015-3Q Statements of Financial Position (¥Billion) Increase/ Increase/ 2015/3/31 2015/12/31 2015/3/31 2015/12/31 decrease decrease <Assets> <Liabilities> Current Assets 741.8 874.1 132.3 Current Liabilities 239.7 339.1 99.3 Cash and Cash Equivalents 503.9 520.8 16.8 *1 *2 *8 Trade and Other Payab
Slide 64: FY2015-3Q Statements of Cash Flows
FY2015-3Q Statements of Cash Flows Major Items 15/3Q (¥Billion) Operating Activities 14.5 Income before Income Taxes 43.1 Depreciation and Amortization 8.7 Increase/Decrease in Trade and Other Receivables/Payables -4.2 Increase/Decrease in Other Current Liabilities -3.4 Increase/Decrease in Other Fi
Slide 65: 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 66: 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 67: Revenue Trends by Advertising Products
Revenue Trends by Advertising Products 14/3Q 14/4Q 15/1Q 15/2Q 15/3Q Indicator Unit (Oct.-Dec.) (Jan.-Mar.) (Apr.-Jun.) (Jul.-Sep.) (Oct.-Dec.) Total advertising revenue Billion yen 62.1 69.3 63.3 65.7 66.0 YoY Change % +5.4% +8.4% +9.5% +8.6% +6.3% Paid search advertising revenue Billion yen 37.2 3
Slide 68: Quarterly Business Data (1)
Quarterly Business Data (1) 14/3Q 14/4Q 15/1Q 15/2Q 15/3Q YoY Indicator (Quarterly average) Unit (Oct.-Dec.) (Jan.-Mar.) (Apr.-Jun.) (Jul.-Sep.) (Oct.-Dec.) Change Number of total monthly page views Million 60,561 61,969 64,990 68,102 63,147 +4.3% Number of total monthly smartphone page views *1 Mil
Slide 69: Quarterly Business Data (2)
Quarterly Business Data (2) 14/3Q 14/4Q 15/1Q 15/2Q 15/3Q YoY Indicator (Quarterly total) Unit (Oct.-Dec.) (Jan.-Mar.) (Apr.-Jun.) (Jul.-Sep.) (Oct.-Dec.) Change Auction-related transaction value *1 Billion yen 221.7 209.0 208.8 203.2 233.6 +5.4% Shopping-related transaction value *2 Billion yen 102
Slide 70: Quarterly Transaction Value Growth Trend
Quarterly Transaction Value of Shopping-related and Auction-related business YoY Growth Trend 50% 40% Special demand 30% before tax hike 20% 10% 0% New e-commerce Impact of special strategies introduced demand before tax hike -10% 12/3Q 12/4Q 13/1Q 13/2Q 13/3Q 13/4Q 14/1Q 14/2Q 14/3Q 14/4Q 15/1Q 15/
Slide 71: Organization Chart of Yahoo Japan Corporation
Organization Chart of Yahoo Japan Corporation President & As of January 1, 2016 Representative Director / CEO SEVPCO / COO SEVPCO / CFO Board of Directors Media Company System Management Audit and Supervisory CEO Office Committee (889) Group (817) Marketing Solutions Data & Science People Developmen
Slide 72: Number of Directors and Employees
Number of Directors and Employees (at the End of Quarter) (Number of People) 9,000 6,000 3,000 0 12/12 13/3 13/6 13/9 13/12 14/3 14/6 14/9 14/12 15/3 15/6 15/9 15/12 Directors and Auditors of 31 35 30 33 31 30 30 38 33 33 33 61 61 Subsidiaries Employees of 1,885 1,938 1,620 1,660 1,658 1,684 1,695 1
Slide 73: Consolidated Subsidiaries and Associates
Consolidated Subsidiaries and Associates (as of December 31, 2015) Major consolidated subsidiaries ASKUL Corporation Carview Corporation Dynatech inc. ecohai Co., Ltd. FirstServer, Inc. GYAO CORPORATION IDC Frontier Inc. Netrust, Ltd Synergy Marketing, Inc. ValueCommerce Co., L
Slide 74: Yahoo! JAPAN
YAHOO! JAPAN