Ly Corporation · TSE:4689
Ly — Z Holdings — Q1 FY2022 Earnings Presentation
51 slides from Ly's earnings presentation, Aug 3, 2022
Slide 1: FY2022 Q1 Appendix
Security Code: 4689 Z Holdings Corporation Business Results FY2022 Q1 Appendix August 3, 2022
Slide 2: FY2022 Q1 Consolidated Business Results
FY2022 Q1 Consolidated Business Results
Slide 3: FY2022 Q1 Factors of Change in Operating Income
FY2022 Q1 Factors of Change in Operating Income Whole Group (JPY B) FY2022 Q1 YoY Difference YoY Major Factors of Change (JPY B) • LINE +10.9 Revenue 390.5 +17.2 +4.6% • ASKUL Group +3.9 • ZOZO +3.7 Cost of sales 122.2 +2.6 +2.2% • ASKUL Group +2.7 SG&A 218.5 +16.1 +8.0% • LINE +4.4 (Major items) Pe
Slide 4: FY2022 Q1 Factors of Change in Net Income Attributable to Owners of the Parent
FY2022 Q1 Factors of Change in Net Income Attributable to Owners of the Parent Whole Group (JPY B) FY2022 Q1 YoY Difference YoY Major Factors of Change (JPY B) Operating income 49.7 -1.6 -3.2% Other non-operating income 3.5 -4.2 -54.4% Other non-operating expenses 3.5 +0.2 +6.3% Gain on change in eq
Slide 5: FY2022 Q1 Equity in Losses of Associates and Joint Ventures
FY2022 Q1 Equity in Losses of Associates and Joint Ventures Whole Group Major Equity- Equity Based in Business Equity in Losses of Associates and Joint Ventures Method Affiliates Ratio1 Content (JPY B) WEBTOON U.S. 32.3% • Operation of e-manga services Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Entertainment Com
Slide 6: Business Status of Equity-Method Affiliates
Business Status of Equity-Method Affiliates Whole Group • Many of the equity-method affiliates are moving into a monetizing phase from FY2023. • Aim to turn LINE’s international/financial businesses profitable in around FY2023-FY2025. (Scheduled to be consolidated in October 2022) (Taiwan) (Thailand
Slide 7: Adjusted EBITDA – Breakdown of Adjustment Items
Adjusted EBITDA – Breakdown of Adjustment Items Whole Group (JPY B) Depreciation Stock Adjusted EBITDA & Loss on compensation amortization retirement of expenses Other Op. income ＋ depreciation & fixed assets Impairment losses 86.5 amortization ± EBITDA +34.6 adjustment items +0.2 +3.4 -1.8 +0.2 EBI
Slide 8: Impact from Consolidation of Subsidiaries (PPA)
Impact from Consolidation of Subsidiaries (PPA) Whole Group LINE ZOZO Annual Amortization Amortization Period Annual Amortization Amortization Period Item Amount (JPY B) Item Amount (JPY B) Amount (JPY B) (Straight Line) Amount (JPY B) (Straight Line) PPA1 394.4 13.7 - PPA1 502.1 13.2 - Technology 2
Slide 9: FY2022 Q1 Consolidated Statement of Financial Position
FY2022 Q1 Consolidated Statement of Financial Position Whole Group (JPY B) FY2021 Q4 FY2022 Q1 Difference Assets 7,110.3 7,247.0 +136.6 Cash and cash equivalents 1,127.5 1,179.2 +51.7 Trade and other receivables 368.6 324.5 -44.0 Loans in credit card business 475.5 465.1 -10.4 Investment securities
Slide 10: Financial Data: CAPEX and Adjusted FCF
Financial Data Whole Group CAPEX1 Adjusted FCF2 (JPY B) (JPY B) 66.1 151.2 126.6 74.9 61.1 34.4 38.9 30.7 18.5 22.2 19.4 38.2 -16.7 -24.6 -42.6 32.0 6.7 -55.5 29.6 5.6 8.8 22.5 0.05 35.4 31.5 -231.7 24.0 22.5 23.2 -266.1 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Property and Equipm
Slide 11: Financial Data: Interest-Bearing Debt and Net Leverage Ratio
Financial Data Whole Group Interest-Bearing Debt & Net Interest-Bearing Debt1 Net Leverage Ratio2 / Adjusted Net Leverage Ratio3 (Excludes banking business) (Excludes banking business) (JPY B) (JPY B) 1,887.4 3.19x 1,757.3 1,747.8 196.1 1,000 1,624.4 2.87x 177.9 176.1 3.00 1,431.8 186.0 283.0 2.55x
Slide 12: FY2022 Cost Synergies
FY2022 Cost Synergies Whole Group • In FY2022, pursue approx. JPY14 B cost synergies through optimization of outsourced development and joint purchase, etc. Cost Synergies1 Further Cost Reduction in FY2021 New Cost Synergy Areas （JPY B） Cost Synergy Areas in FY2022 Approx. 14.0 Consolidation of offi
Slide 13: FY2022 Q1 Consolidated Business Results: LINE
｜ FY2022 Q1 Consolidated Business Results1, 2 LINE • Driven by the growth in the advertising business, revenue achieved a double-digit growth. Operating income decreased due to increased sales promotion in overseas e-commerce and LINE GIFT. Revenue (YoY) Operating Income (JPY B) (JPY B) 82.2 81.3 79
Slide 14: Change in Reporting Segments
Change in Reporting Segments Whole Group • From FY2021, introduced 3 new business segments: Media, Commerce, and Strategic by classifying businesses according to the growth phase of each business. FY2020 FY2021 Q1 – Media/Advertising, Search, Marketing Solution, Vertical Commerce Media Business Busi
Slide 15: Media Business
Media Business
Slide 16: Group Total Advertising Revenue
Group Total Advertising Revenue Media Business Group Total Advertising Revenue1 Group Total Advertising Revenue – YoY Growth Rate1 (JPY B) 153.4 154.7 +34.1% 143.0 Group Total Advertising Revenue: YoY +7.3% 139.9 133.3 +29.9% 51.0 49.0 46.1 48.8 42.7 +21.3% +17.7% +14.5% +14.3% +11.9% 102.4 105.7 93
Slide 17: Business Results (P/L): Media Business
Business Results (P/L): Media Business Media Business (JPY Million) FY2021 Q11 FY2022 Q11 YoY Revenue 148,776 153,718 +3.3% LINE Advertising revenue 42,722 48,817 +14.3% Display advertising 25,071 27,369 +9.2% Account advertising 16,120 19,883 +23.3% Other LINE advertising 1,530 1,565 +2.3% Yahoo Ja
Slide 18: Major Services and Products of Media Business Segment
Major Services and Products of Media Business Segment Media Business Item Breakdown LINE Ads Display ads LINE VOOM, LINE NEWS, Chat List, Talk Head View, Talk Head View Custom, etc. Account ads LINE Official Account, LINE Promotion Sticker, LINE de Obo, LINE Flyer, etc. Other ads livedoor Blog, LINE
Slide 19: Advertising Products
｜ Advertising Products Media Business Item Fee Calculation Placement Pages/Product Outline Type of Advertiser Display ads Cost per-click LINE VOOM LINE VOOM tab Major corporations/SMEs Cost per-view Cost per-click LINE NEWS NEWS tab Major corporations/SMEs Cost per-view Cost per-click Chat List Top
Slide 20: Advertising Products
｜ Advertising Products Media Business Item Fee Calculation Placement Pages Type of Advertiser Search advertising Cost per-click Search results pages Major corporations/SMEs Display advertising Programmatic Yahoo! JAPAN Ads Top page Cost per-click “Display advertising” Interior pages of service sites
Slide 21: Commerce Business
Commerce Business
Slide 22: LINE GIFT
｜ LINE GIFT Commerce Business • A service that allows users to send various gifts to friends through LINE. • Two types of gifts: “E-Gifts” – suitably priced for casual presents; “Delivery Gifts” – available in wide price ranges to suit various purposes. User Attribute1 LINE GIFT – Transaction Value
Slide 23: Yahoo! JAPAN Mart by ASKUL
Mart ｜ Yahoo! JAPAN Mart by ASKUL Commerce Business • Rebranded to “Yahoo! JAPAN Mart by ASKUL” for full launch. Number of stores increased to 20. • Efforts continue to speedily establish a system that can serve all 23 wards of Tokyo within FY2022. Item Status Next Steps Delivery Bases (Tokyo’s 23 w
Slide 24: Business Results (P/L): Commerce Business
Business Results (P/L): Commerce Business Commerce Business (JPY Million) FY2021 Q11 FY2022 Q11 YoY Revenue 195,979 205,629 +4.9% Merchandise EC 160,006 166,824 +4.3% Shopping business 74,810 79,392 +6.1% Reuse business 14,034 14,052 +0.1% ASKUL online BtoB business 71,161 73,379 +3.1% Services EC 2
Slide 25: Main Service Platforms of Shopping Business
Main Service Platforms of Shopping Business Commerce Business Existing E-commerce Quick Commerce Social Commerce Shopping Mart (Scheduled to be renewed in October 2022) Mall-type Direct sales Direct sales Immediate delivery Mall-type E-commerce store Live commerce (Approx. 400 mil. items) (Approx. 9
Slide 26: Major Services and Products of Commerce Business Segment
Major Services and Products of Commerce Business Segment Commerce Business Item Breakdown Merchandise EC - Yahoo! JAPAN Shopping, PayPay Mall, ZOZOTOWN, LOHACO, Charm, LINE SHOPPING, Shopping business LINE FRIENDS, LINE GIFT, MySmartStore, Yahoo! JAPAN Mart by ASKUL, LIVEBUY, Overseas EC1 Reuse busi
Slide 27: KPI - Definition of EC Transaction Value
KPI - Definition of EC Transaction Value Commerce Business Item Major Services/products EC transaction value - Domestic merchandise - Yahoo! JAPAN Shopping, PayPay Mall, ZOZOTOWN, LOHACO, Charm, LINE SHOPPING, Shopping business LINE GIFT, LINE FRIENDS, MySmartStore, Yahoo! JAPAN Mart by ASKUL, LIVEB
Slide 28: Strategic Business
Strategic Business
Slide 29: Major KPIs of PayPay
｜ Major KPIs of PayPay Strategic Business PayPay GMV1 No. of PayPay Payments1 Cumulative PayPay Registered Users No. of PayPay Merchants2 (JPY T) (Million) (Million) (Million) 1.67 1,113 48.65 3.66 3.74 46.79 3.55 1.53 44.55 3.44 1,005 3.34 1.46 967 42.30 40.28 873 1.21 1.22 786 YoY +37.9% YoY +41.5
Slide 30: Major KPIs of PayPay Card
｜ Major KPIs of PayPay Card Strategic Business Active Cardholders1 Transaction Volume1 Revolving Balance1 (Million) (JPY B) (JPY B) 8.68 841.6 192.8 8.31 184.7 7.89 772.7 773.2 176.8 7.64 7.72 169.3 172.0 686.6 675.5 YoY +13.7% YoY +22.6% YoY +13.9% Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q1'21 Q2'21 Q3'21 Q4
Slide 31: Major KPIs of PayPay Bank
｜ Major KPIs of PayPay Bank Strategic Business No. of Accounts Deposit Balance Loan Balance (Million) (JPY B) (JPY B) 6.22 1,539.5 486.0 6.02 5.81 1,443.4 1,461.7 5.65 5.47 1,347.6 416.7 1,282.8 321.0 288.3 264.1 YoY +13.7% YoY +20.0% YoY +84.0% Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q1'21 Q2'21 Q3'21 Q4'21
Slide 32: Capital Structure (Shareholding Ratio)
｜ Capital Structure (Shareholding Ratio) Strategic Business • Consolidate PayPay Corporation from October 2022 May 2018 As of end of As of end of As of end of As of end of Capital Structure after Completion of Transactions4,5 (At founding) May 2019 Mar 2020 Mar 2022 June 2022 (Scheduled in Oct. 2022
Slide 33: LINE NFT Business Service Map
｜ LINE NFT Business Service Map Strategic Business • Rapid spread of blockchains as crypto-assets, has expanded NFTs into all industries including digital content, gaming items, and the field of metaverse. Issue Trade/Manage Use/Reproduce Crypto-asset Issuer Crypto-asset Exchange Metaverse Crypto-as
Slide 34: Business Results (P/L): Strategic Business
Business Results (P/L): Strategic Business Strategic Business (JPY Million) FY2021 Q11 FY2022 Q11 YoY Revenue 27,599 30,316 +9.8% Fintech 27,293 30,507 +11.8% PayPay Card2 11,450 13,901 +21.4% PayPay Bank2 8,023 8,435 +5.1% Other fintech (LINE Fintech, etc.) 7,819 8,170 +4.5% Other Strategic Busines
Slide 35: PayPay Card Corporation – Business Results
PayPay Card Corporation – Business Results Strategic Business Revenue/Operating Income (Non-Consolidated IFRS)1 Statement of Financial Position (JGAAP)1 (JPY B) (JPY B) 13.6 13.9 13.4 FY2021 FY2022 Difference Q4 Q1 11.4 11.5 Assets 776.2 804.8 +28.5 Cash and cash equivalents 63.3 54.0 -9.2 Trade and
Slide 36: PayPay Bank Corporation – Business Results
PayPay Bank Corporation – Business Results Strategic Business Revenue/Operating Income (Non-Consolidated IFRS)1 Statement of Financial Position (JGAAP)1 (JPY B) (JPY B) 8.9 8.7 8.5 8.6 FY2021 FY2022 8.3 Difference Q4 Q1 Assets 1,583.9 1,659.6 +75.7 Cash and cash equivalents 334.3 347.1 +12.7 Trade a
Slide 37: Major Services and Products of Strategic Business Segment
Major Services and Products of Strategic Business Segment Strategic Business Item Breakdown Fintech - PayPay Card - PayPay Bank - PayPay Asset Management, PayPay Insurance, Magne-Max, Other fintech LINE Pay, LINE Securities, LINE Score, LINE Pocket Money, LINE BITMAX, LINE NFT, etc. Others AI, LINE
Slide 38: Business Structure of PayPay Card and PayPay Atobarai
Business Structure of PayPay Card and PayPay Atobarai Strategic Business Instrument Available at Credit Line Revolving/Installment Payment Main Revenue Sources Provided by Top-up & Pay Payment from PayPay merchants • Payment fee from PayPay PayPay app - - PayPay Balance (Online/offline) merchants Co
Slide 39: International Business
International Business
Slide 40: International Business Development
｜ International Business Development International Business • Overwhelming reach and market share in Asian countries and regions, mainly Taiwan, Thailand, and Indonesia. • Generating revenue mainly from advertising, stickers, and game businesses based on messaging. International Business Revenue5 Ta
Slide 41: Non-Financial Information
Non-Financial Information
Slide 42: New Remuneration Policy and Revision of Executive Remuneration Plan
Establishment of a New Remuneration Policy and Revision of Executive Remuneration Plan Non-Financial Information • The new executive remuneration plan from FY2022 onwards puts more emphasis on stock-based remuneration as a medium- to long-term incentive. • Fostering a sense of shared interest (Same
Slide 43: User Base
User Base Non-Financial Information Yahoo Japan - Number of Monthly Logged-in User IDs LINE - Monthly Active Users (Million) (Million) June 2022 Global MAU1：193 54.5 54.7 55.4 54.8 174 176 176 51.9 171 173 10 9 9 9 10 52 53 53 53 50 21 21 21 22 22 89 89 90 92 92 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q1'21 Q
Slide 44: Materiality of Z Holdings Group (Materiality Evaluation Map)
Materiality of Z Holdings Group (Materiality Evaluation Map) Non-Financial Information Improve services through the use of data Ensure security as a social infrastructure Contribute to the healthy and safe development of the Internet society Secure safe telecommunications and Support the promotion o
Slide 45: Materiality Matrix for Z Holdings Group
Materiality Matrix for Z Holdings Group (Identified Materiality) Non-Financial Information Business Providing new (WOW!) experiences foundation Customers using data/AI UPDATE Operating safe & secure digital platforms Partners THE National Building a resilient social infrastructure and local governme
Slide 46: 2030 Carbon Neutrality Declaration
2030 Carbon Neutrality Declaration1 Non-Financial Information • ZHD Group as a whole, aims to achieve carbon neutrality where greenhouse gas (GHG) emissions are reduced to net-zero by 2030. • Contribute to the realization of a sustainable society by encouraging carbon neutral initiatives both in and
Slide 47: Acknowledgment as a Sustainable Company
Acknowledgment as a Sustainable Company1 Non-Financial Information • Acknowledged by various evaluators. • Aim to maintain/enhance a high third-party evaluation after integration, to secure our position as the industry- leading ESG issuer. 1. As of 2021, Z Holdings Corporation received an MSCI ESG R
Slide 48: External ESG Evaluations
External ESG Evaluations Non-Financial Information S&P Global – DJSI MSCI ESG Rating1 Approx. 320 companies selected Score rising every year since 2018 around the world Received Highest Rating: Named as DJSI World Index AAA constituent for two For two consecutive years, named to consecutive years MS
Slide 49: Released Integrated Report Portal
Released “Integrated Report Portal” Non-Financial Information • Financial/non-financial information useful for investment decisions are kept up to date Vision and Strategy Sustainability Value Creation Business Performance URL: (English) https://www.z-holdings.co.jp/integrated-report/en/ (Japanese)
Slide 50: Disclaimer
Disclaimer Statements made at the meeting or included in the documents that are not historical facts are forward-looking statements about the future performance of Z Holdings Corporation (Company, Z Holdings, ZHD) and its consolidated subsidiaries and affiliates. The Company cautions you that a numb
Slide 51: Unleashing the infinite potential of all people, with the power of information technology
Unleashing the infinite potential of all people, with the power of information technology