Ly Corporation · TSE:4689
Ly — Yahoo Japan — FY2008 2Q Earnings Presentation
44 slides from Ly's earnings presentation, Oct 24, 2008
Slide 1: FY 2008-2Q & First Half Results
Yahoo Japan Corporation FY 2008-2Q & First Half Results (Jul. - Sept./Apr. - Sept. 2008) Oct. 24, 2008 1
Slide 2: Forward-looking statements and revenue presentation note
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 3: FY2008 First Half and 2Q Highlights (1)
FY2008 First Half and 2Q Highlights (1) (Apr.– Sept. 2008 / July-Sept. 2008) First half revenue amounted to ¥131.6 billion.* Operating income was ¥65.9 billion, increasing 10.3% from a year earlier. Ordinary income totaled ¥65.0 billion, rising 12.6% over the same period last year. Net income climb
Slide 4: FY2008 First Half and 2Q Highlights (2)
FY2008 First Half and 2Q Highlights (2) (Apr.– Sept. 2008 / July-Sept. 2008) Second quarter revenue amounted to ¥66.0 billion.* Operating income was ¥33.0 billion, increasing 9.7% from a year earlier. Ordinary income totaled ¥32.6 billion, rising 11.5% over the same period last year. Net income cli
Slide 5: FY2008 First Half and 2Q Highlights (3)
FY2008 First Half and 2Q Highlights (3) (Apr.– Sept. 2008 / July-Sept. 2008) In the second quarter, the overall trend in the Japanese economy reversed as the economy slowed rapidly. Amid strong concerns about deterioration in corporate performances, DENTSU INC.’s TV advertising revenues for Septem
Slide 6: FY2008 First Half and 2Q Highlights (4)
FY2008 First Half and 2Q Highlights (4) (Apr.– Sept. 2008 / July-Sept. 2008) In the personal service business, efforts by the Yahoo! Premium service to increase value-added content for existing members resulted in the number of Yahoo! Premium membership IDs at the end of September rising 10.6% yea
Slide 7: FY2008-First Half Financial Results (Consolidated)
FY2008-First Half Financial Results (Consolidated) 7
Slide 8: FY2008-First Half Statements of Income
FY2008-First Half Statements of Income 08/4-9 08/4-9 07/4-9 Changes (Gross (Net basis) (Gross basis) (Gross basis) Comparison) Revenue (¥100M) 1,316 1,458 1,177 23.9 % Cost of Sales (¥100M) 140 218 72 203.4 % Gross Profit (¥100M) 1,175 1,239 1,105 12.2 % Operating Income (¥100M) 659 659 597 10.3 % O
Slide 9: FY2008 First Half Balance Sheets
FY2008 First Half Balance Sheets (¥100M) Increase/ Major Factors for Major Items 2008/9/30 2008/3/31 Decrease Increase/Decrease Assets Current Assets 1,273 1,643 -369 Acquisition of own stocks Cash and Cash Equivalents 767 1,130 -362 Accounts Receivable -Trade 340 368 -27 Fixed Assets 2,036 2,053 -1
Slide 10: FY2008 First Half Cash Flow Statements
FY2008 First Half Cash Flow Statements FY2008 first half (¥100M) Major Items Major Factors for Changes (Apr.-Sept. 2008) Operating Activities 391 Net Income before Income Taxes 645 Increase in net income before income taxes Depreciation Expenses 52 Accounts Receivable/Payable-Trade 18 Other Current
Slide 11: FY2008-2Q Financial Results (Consolidated)
FY2008-2Q Financial Results (Consolidated) •Consolidated subsidiaries at the end of FY2008-2Q Firstserver, Inc. Indival, Inc. Netrust, Ltd. NewsWatch, Inc. Overture K.K. Tricle Inc. Yahoo Japan Customer Relations Corporation Yahoo Japan Value Insight Corporation Y’s Insurance Inc.
Slide 12: FY2008-2Q Statements of Income
FY2008-2Q Statements of Income 08/7-9 08/7-9 07/7-9 Changes (Gross (Net basis) (Gross basis) (Gross basis) Comparison) Revenue (¥100M) 660 733 610 20.1 % Cost of Sales (¥100M) 70 111 47 131.6 % Gross Profit (¥100M) 589 621 562 10.6 % Operating Income (¥100M) 330 330 300 9.7 % Ordinary Income (¥100M)
Slide 13: Quarterly Revenue
Quarterly Revenue (¥ 100M) 600 400 200 0 05/7-9 10-12 06/1-3 4-6 7-9 10-12 07/1-3 4-6 7-9 10-12 08/1-3 411 466 470 492 512 545 575 566 610 700 742 655 660 725 733 13 • Figures on gross basis for 08/4-6 and after are for your reference.
Slide 14: Quarterly Profits
Quarterly Profits (¥ 100M) 400 50% 40% 300 30% 200 20% 100 10% 0 0% 05/7-9 10-12 06/1-3 4-6 7-9 10-12 07/1-3 4-6 7-9 10-12 08/1-3 4-6 7-9 Operating Income 190 211 235 239 250 276 295 296 300 312 337 328 330 Ordinary Income 185 205 229 229 247 266 284 285 293 308 328 324 326 Operating Margin 46% 45%
Slide 15: FY2008-2Q Revenue Breakdown by Business
FY2008-2Q Revenue Breakdown by Business (Net basis) (¥ 100M) Sales Breakdown Gross Operating Operating Revenue SG&A by Business Unit Profit Income Margin Search Business & Overture K.K. 64% Media Business 11% Advertising 351 Service Supervising Division 9% 300 116 183 52.2% Auction Business 3% Socia
Slide 16: SG&A Breakdown
SG&A Breakdown (¥ 100M) Major factors for YoY changes 08/2Q 08/1Q 07/2Q (Net) (Net) (Gross) Personnel expenses 65 25.1% 61 6.1% 52 23.8% Business commissions 42 16.3% 42 -1.4% 40 4.4% Acquisition of software and Depreciation expenses 26 10.1% 23 10.9% 22 16.2% servers Communication charges 23 8.9% 2
Slide 17: FY2008-2Q Balance Sheets
FY2008-2Q Balance Sheets Increase/ Major Factors for Major Items 2008/9/30 2007/9/30 (¥ 100M) Decrease Increase/Decrease Assets Current Assets 1,273 1,300 -27 Acquisition of own stocks Cash and Cash Equivalents 767 868 -101 Accounts receivable -Trade 340 300 40 Increase in earnings from Fixed Assets
Slide 18: FY2008-2Q Cash Flow Statements
FY2008-2Q Cash Flow Statements FY2008-2Q (¥ 100M) Major Items Major Factors for Changes (July-Sept. 2008) Operating Activities 337 Net Income before Income Taxes 314 Increase in quarterly net income Depreciation Expenses 27 before income taxes Accounts Receivable/Payable-Trade 8 Other Current Assets
Slide 19: Number of Directors and Employees
Number of Directors and Employees (Number of People) (at the End of Quarter) 4,000 3,000 2,000 1,000 0 05/9 12 06/3 6 9 12 07/3 6 9 12 08/3 6 9 Directors and uditors of Subsidiaries 27 33 33 31 31 25 27 27 33 31 32 26 25 Employees of Subsidiaries 438 583 594 669 670 634 711 773 990 1,015 1,053 680 7
Slide 20: Review of FY2008 2Q Business Outlook
Review of FY2008 2Q Business Outlook • Amid a sharp deterioration in the economy, recruiting business revenues declined, but sales of both display and pay per performance advertising (*) grew favorably in the Advertising Business. • We endeavored to control the growth in SG&A expenses, including sub
Slide 21: FY2008-3Q Business Outlook
FY2008-3Q Business Outlook (Consolidated) Heading into the year-end sales campaign period, the Group will focus on maximizing transaction volumes and profits of the Auction and Shopping businesses. Furthermore, it will conduct sales promotions for its interest-linked advertising service Interest Mat
Slide 22: Commenced Offering Interest Match
Commenced Offering Interest MatchTM Commenced offering interest-linked advertising Interest MatchTM (9/16) This service is currently limited to PC services and offered only to certain advertisers acquired via ad agencies (about 1,200 accounts). Interest MatchTM is being distributed to 24 of our serv
Slide 23: Features of Interest Match
Features of Interest MatchTM Pay-per-performance advertising in a form of text ads based on the user’s interest by analyzing the pages being viewed, and his or her viewing/search history. Also enables targeting combined with demographics (gender, age group, etc.), and distribution area or time z
Slide 24: Review of Operations
Review of Operations 24
Slide 25: Businesses of Yahoo! JAPAN
Businesses of Yahoo! JAPAN Internet advertising Advertising Display advertising such as banners Pay per performance advertising such as paid search service Business offered by Overture K.K., interest-linked advertising, etc. Business services other than advertising Information listing fees for
Slide 26: Advertising Business
Advertising Business Display advertising (Banner advertising, etc.) - With a sense of stagnation continuing due to the suppressed advertising expenses of companies, we focused mainly on the sales of products with high branding effects or targeting advertising. - Sales of behavioral targeting advert
Slide 27: Display Advertising Sales by Industry
Display Advertising Sales by Industry Industries with large year on year increase Industries with high year on year growth rate Transportation/Leisure Entertainment Related Software Cosmetics/Toiletries Transportation/Leisure Real Estate/Construction Fashion/Accessories 07/2Q 3Q 4Q 08/1Q
Slide 28: Business Services Business
Business Services Business E-commerce-related revenues (Auction Business, Shopping Business, etc.) - At the end of September 2008, the number of merchant stores registered on Yahoo! Shopping and Yahoo! Auctions totaled 32,652 increasing by 3,216 stores, or 10.9% year on year. The mobile transaction
Slide 29: Personal Services Business
Personal Services Business Yahoo! Auctions system-use revenues (Auction Business) - Total commercial transaction volume of Yahoo! Auctions in the second quarter was held to ¥172.9 billion. The Yahoo! Auctions system-use revenues recorded by the Personal Services Business was approximately the same
Slide 30: Review of Operations by Business Unit
Review of Operations by Business Unit 30
Slide 31: Review of Operations by Business Unit (1)
FY2008-2Q Review of Operations by Business Unit (1) Search Business • Commenced offering Custom Search, a service enabling the customization of search windows and search result web pages on personal sites. • Launched Yahoo! Search Infocenter, which provides information related to Yahoo! Search Techn
Slide 32: Review of Operations by Business Unit (2)
FY2008-2Q Review of Operations by Business Unit (2) Member Services Business • Ran various campaigns to acquire new subscribers, including a Yahoo! BB Up to Half Cash Back Campaign, a Maximum of 12,000 Points or Five Months Campaign under the Yahoo! BB Introduction Program, and a Ladies Free Campaig
Slide 33: Review of Operations by Business Unit (3)
FY2008-2Q Review of Operations by Business Unit (3) Lifestyle Business • Yahoo! BEAUTY: As the first step in a cooperative business agreement with So-net Entertainment Corporation, commenced a business tie-up with So-net’s Cara Carina, a portal site for women. In addition to enabling use of the So-n
Slide 34: Review of Operations by Business Unit (4)
FY2008-2Q Review of Operations by Business Unit (4) Shopping Business • Commenced full-scale operation of the Yahoo! Shopping Web Service, which opens up Yahoo! Shopping’s application programming interface (API) to external sites. Users can now utilize Yahoo! Shopping’s item database and various fun
Slide 35: Review of Operations by Business Unit (5)
FY2008-2Q Review of Operations by Business Unit (5) New Businesses Office • Settlement Services: As a new settlement service on Yahoo! Auctions, introduced Japan Net Bank, Limited’s JNB Electronic Money. Added the ability to use Yahoo! Points for Suica charges, mutually convert Yahoo Points and Suic
Slide 36: Appendix
Appendix 36
Slide 37: Organization
Organization Auditors Board of Directors President & CEO Director & COO Director & CFO CSO CCO CTO COO Office (3) Member Services Auction Business Search Business Administrative Business (110) (153) (144) Office (113) Information Security Office (77) Regional Services Media Business Shopping Legal O
Slide 38: Additional Business Data: 2008-2Q
Additional Business Data: 2008-2Q Average Daily Transaction Volume Jul.-Sept. 2007 Jul.-Sept. 2008 Commerce \100M 24.1 24.8 Auction \100M 18.5 18.7 Shopping* \100M 5.6 6.0 Yahoo! Mobile e-commerce \100M 2.7 3.6 Subscriber Lines for Yahoo! BB Services End of Sept. 2007 End of Sept. 2008 Total (thousa
Slide 39: Number of Yahoo! JAPAN Users
Number of Yahoo! JAPAN Users (Millions of browsers) (Millions of people) Unique Browsers 150 Unique Customers 100 50 0 06/9 12 07/3 6 9 12 08/3 6 9 (Source: Nielsen Online/The Group) • The Number of Yahoo! JAPAN Unique Browsers is the total number of unique browsers accessing our services. It can fl
Slide 40: Number of Yahoo! JAPAN IDs and Members
Number of Yahoo! JAPAN IDs and Members (Millions of IDs and lines) 25 Number of Yahoo! JAPAN Active User IDs 20 15 Number of Yahoo! Premium Member IDs 10 5 Number of Yahoo! BB Members 0 06/9 12 07/3 6 9 12 08/3 6 9 Active User IDs 17.05 18.28 19.23 19.67 20.31 21.36 21.92 22.02 22.85 Prem ium Mem be
Slide 41: Number of Yahoo! JAPAN Page Views and Time Spent
Number of Yahoo! JAPAN Page Views and Time Spent (Millions of PVs) Average Daily Time Time spent Average (Seconds) Spent per User Daily PVs 400 1,500 300 1,000 200 500 100 0 0 • Average Daily PVs are based on the Company’s data (Source: Nielsen Online/The Group) • Average Daily Time Spent per user i
Slide 42: FY2008-2Q Major Advertisers
FY2008-2Q Major Advertisers Finance/Insurance/Securities Beverages/Cigarettes Sumitomo Mitsui Banking Corporation Coca-Cola (Japan) Company, Limited The Bank of Tokyo-Mitsubishi UFJ, Ltd. Kirin Brewery Company, Limited ORIX Credit Corporation Suntory Limited Real Estate/Construction Foodstuf
Slide 43: e-Commerce Transaction Volume and Number of Stores
e-Commerce Transaction Volume and Number of Stores (¥ 100M) (Stores) Transaction Total number of stores 3,000 Volume 30,000 2,000 20,000 Yahoo! Shopping stores Yahoo! Auctions stores 1,000 10,000 0 0 06/2Q 3Q 4Q 07/1Q 2Q 3Q 4Q 08/1Q 2Q • Transaction volume excludes the amount of fraudulent orders. 4
Slide 44: Yahoo Japan Corporation IR information
Yahoo Japan Corporation IR information is available at : http://ir.yahoo.co.jp/en/ 44