Ly Corporation · TSE:4689
Ly — Z Holdings — Q2 FY2022 Earnings Presentation
55 slides from Ly's earnings presentation, Nov 2, 2022
Slide 1: FY2022 Q2 Appendix
Security Code: 4689 Z Holdings Corporation Business Results FY2022 Q2 Appendix November 2, 2022
Slide 2: FY2022 Q2 Consolidated Business Results
FY2022 Q2 Consolidated Business Results
Slide 3: FY2022 Q2 Factors of Change in Operating Income
FY2022 Q2 Factors of Change in Operating Income Whole Group (JPY B) FY2022 Q2 YoY Difference YoY Major Factors of Change (JPY B) • LINE +7.3 Revenue 394.3 +16.7 +4.4% • ASKUL Group +6.2 • ZOZO +4.1 Cost of sales 123.6 +3.2 +2.7% • ASKUL Group +4.2 SG&A 230.0 +21.9 +10.6% • LINE +5.7 (Major items) Pe
Slide 4: FY2022 Q2 Factors of Change in Net Income Attributable to Owners of the Parent
FY2022 Q2 Factors of Change in Net Income Attributable to Owners of the Parent Whole Group (JPY B) FY2022 Q2 YoY Difference YoY Major Factors of Change (JPY B) Operating income 49.7 -14.3 -22.4% Other non-operating income 5.3 +0.5 +11.8% Other non-operating expenses 3.0 -0.6 -16.8% Gain on change in
Slide 5: FY2022 Q2 Equity in Losses of Associates and Joint Ventures
FY2022 Q2 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 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 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. (Consolidated in October 2022) (Taiwan) (Thailand) (Indonesia) •
Slide 7: Adjusted EBITDA – Breakdown of Adjustment Items
Adjusted EBITDA – Breakdown of Adjustment Items Whole Group (JPY B) Stock Adjusted EBITDA Depreciation Loss on compensation & amortization retirement of Impairment expenses Other Op. income ＋ depreciation & fixed assets losses +35.1 amortization ± EBITDA 80.6 adjustment items +0.4 -0 +4.2 -8.8 EBITD
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 Q2 Consolidated Statement of Financial Position
FY2022 Q2 Consolidated Statement of Financial Position Whole Group (JPY B) FY2022 Q1 FY2022 Q2 Difference Assets 7,247.0 7,514.7 +267.6 Cash and cash equivalents 1,179.2 1,359.0 +179.7 Trade and other receivables 324.5 342.9 +18.4 Loans in credit card business 465.1 475.2 +10.1 Investment securities
Slide 10: Financial Data: CAPEX and Adjusted FCF
Financial Data Whole Group CAPEX1 Adjusted FCF2 (JPY B) (JPY B) 66.1 151.2 126.6 129.8 112.8 74.9 34.4 38.9 30.7 48.2 22.2 17.1 19.4 6.5 38.2 -24.6 -16.7 32.0 6.7 -55.5 8.8 22.5 0.05 41.7 35.4 31.5 -231.7 22.5 23.2 -266.1 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Property and Equip
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) 2,013.4 3.19x 3.17x 1,887.4 1,000 1,757.3 192.9 2.87x 1,747.8 196.1 3.00 1,624.4 2.55x 177.9 176.1
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 New Cost Synergy Areas （JPY B） in FY2021 Cost Synergy Areas in FY2022 Approx. 14.0 Consolidation of offi
Slide 13: FY2022 Q2 Consolidated Business Results: LINE
｜ FY2022 Q2 Consolidated Business Results1, 2 LINE • Revenue growth driven by account ads. Operating income increased due to one-time gain related to the consolidation of LINE MUSIC. Revenue (YoY) Operating Income (JPY B) (JPY B) 82.2 81.3 81.5 79.9 (+17.3%) (+17.0%) (+15.5%) (+10.0%) 10.3 74.1 (+17
Slide 14: Change in Reporting Segments
Change in Reporting Segments Whole Group • From FY2021, introduced three new business segments: Media, Commerce, and Strategic by classifying businesses according to the growth phase of each business. FY2020 FY2021 Q1 – Commerce Media/Advertising, Search, Marketing Solution, Vertical Media Business
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 +29.9% Group Total Advertising Revenue: 143.0 145.1 YoY +3.7% 139.9 51.0 49.0 48.8 48.6 +21.3% 46.1 +17.7% +14.3% +11.9% +9.6% 102.4 105.7 +8.6% 93.7
Slide 17: Business Results (P/L): Media Business
Business Results (P/L): Media Business Media Business (JPY Million) FY2021 Q21 FY2022 Q21 YoY Revenue 155,356 154,389 -0.6% LINE Advertising revenue 46,167 48,607 +5.3% Display advertising 26,853 26,215 -2.4% Account advertising 17,713 20,858 +17.8% Other LINE advertising 1,600 1,534 -4.1% Yahoo Jap
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 Blog1, LIN
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/SMBs Cost per-view Cost per-click LINE NEWS NEWS tab Major corporations/SMBs 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/SMBs 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 21. • 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 Q21 FY2022 Q21 YoY Revenue 192,622 205,911 +6.9% Merchandise EC 154,878 164,856 +6.4% Shopping business 73,771 77,136 +4.6% Reuse business 13,608 13,632 +0.2% ASKUL online BtoB business 67,498 74,087 +9.8% Services EC 4
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 (Renewed in October 2022) Mall-type Direct sales Direct sales Immediate delivery Mall-type E-commerce store Live commerce (Approx. 600 mil. items) (Approx. 900,000 (No. of i
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 Mall1, ZOZOTOWN, LOHACO, Charm, LINE SHOPPING, Shopping business LINE FRIENDS, LINE GIFT, MySmartStore, Yahoo! JAPAN Mart by ASKUL, LIVEBUY, Overseas EC2 Reuse bus
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 Mall1, ZOZOTOWN, LOHACO, Charm, LINE SHOPPING, Shopping business LINE GIFT, LINE FRIENDS, MySmartStore, Yahoo! JAPAN Mart by ASKUL, LIVE
Slide 28: Strategic Business
Strategic Business
Slide 29: Major KPIs of PayPay
｜ Major KPIs of PayPay Strategic Business Registered Users1・MTU2 No. of PayPay Payments3 No. of PayPay Merchants4 （Million） (B) （Million） 51.21 1.267 3.87 48.65 3.66 3.74 46.79 3.55 44.55 1.113 3.44 42.30 1.005 0.967 0.873 25.16 22.53 M T U YoY +45.1% YoY +12.5% Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q2'21 Q
Slide 30: Profitability (PayPay Standalone)
｜ Profitability (PayPay Standalone) Strategic Business • Profit structure improving due to rising Total Take Rate1 and cost optimization2. • Profit structure to be further improved from further hike in Total Take Rate and disciplined cost control. Profit Structure (% to GMV) Future Measures (%) 1 Hi
Slide 31: Major KPIs of PayPay Card
｜ Major KPIs of PayPay Card Strategic Business Active Cardholders1 Transaction Volume1 Revolving Balance1 (Million) (JPY B) (JPY B) 9.05 841.6 842.7 202.9 8.68 192.8 8.31 772.7 773.2 184.7 7.89 176.8 7.72 172.0 675.5 YoY +17.2% YoY +24.7% YoY +17.9% Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q2'21 Q3'21 Q4'21 Q1
Slide 32: Major KPIs of PayPay Bank
｜ Major KPIs of PayPay Bank Strategic Business No. of Accounts Deposit Balance Loan Balance (Million) (JPY B) (JPY B) 6.42 1,539.5 1,517.9 503.9 6.22 486.0 6.02 1,443.4 1,461.7 5.81 5.65 1,347.6 416.7 321.0 288.3 YoY +13.6% YoY +12.6% YoY +74.8% Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q2'21 Q3'21 Q4'21 Q1'22
Slide 33: Capital Structure (Shareholding Ratio)
｜ Capital Structure (Shareholding Ratio) Strategic Business • Consolidated PayPay Corporation in 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 Sep 2022 (October 2022 –) Yahoo J
Slide 34: Major KPIs of International Financial Business
｜ Major KPIs of International Financial Business Strategic Business LINE BK (Thailand) – Loan Balance LINE Bank (Taiwan) – No. of Users YoY +63.1% YoY 3.2X Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 33
Slide 35: Launched Global NFT Platform DOSI
｜ Launched Global NFT Platform DOSI Strategic Business • On September 14, launched beta version of Global NFT Platform DOSI, available in 180 countries1 and in nine languages. Global NFT Platform DOSI Global NFT Services Adapted to Various Genres AlphaCrewz Avatar x NFT • HD avatar project linked wi
Slide 36: LINE NFT Business Service Map
｜ LINE NFT Business Service Map Strategic Business • Spread of blockchains as crypto-assets, has rapidly 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-
Slide 37: Business Results (P/L): Strategic Business
Business Results (P/L): Strategic Business Strategic Business (JPY Million) FY2021 Q21 FY2022 Q21 YoY Revenue 28,799 33,044 +14.7% Fintech 28,330 33,349 +17.7% PayPay Card2 11,535 14,154 +22.7% PayPay Bank2 8,548 9,652 +12.9% Other fintech (LINE Fintech, etc.) 8,246 9,542 +15.7% Other Strategic Busi
Slide 38: PayPay Corporation – Business Results
PayPay Corporation – Business Results Strategic Business Revenue1/EBITDA2 Statement of Financial Position (JGAAP)3 (JPY B) (JPY B) FY2022 Q1 FY2022 Q2 Difference 29.3 Assets 604.6 697.3 +92.6 23.9 19.1 Cash and deposits 338.9 397.3 +58.4 15.1 Accounts receivable-other 74.6 106.7 +32.0 12.2 Property,
Slide 39: 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) FY2022 FY2022 13.9 14.1 Q1 Q2 Difference 13.6 13.4 Assets 804.8 839.1 +34.3 11.5 Cash and cash equivalents 54.0 63.1 +9.1 Trade and
Slide 40: 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) FY2022 FY2022 9.3 Difference Q1 Q2 8.9 8.6 8.7 8.5 Assets 1,659.6 1,604.9 -54.7 Cash and cash equivalents 347.1 332.3 -14.8 Trade a
Slide 41: 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 42: 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 43: International Business
International Business
Slide 44: 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 45: Non-Financial Information
Non-Financial Information
Slide 46: 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 47: User Base
User Base Non-Financial Information Yahoo Japan - Number of Monthly Logged-in User IDs LINE - Monthly Active Users (Million) (Million) September 2022 Global MAU1：194 54.5 54.7 55.4 54.8 55.3 176 176 176 173 174 10 9 9 9 8 53 53 53 53 52 21 21 22 22 22 89 90 92 92 93 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q2'
Slide 48: 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 49: Materiality of Z Holdings (Identified Materiality)
Materiality of Z Holdings (Identified Materiality) Non-Financial Information Business Providing new (WOW!) experiences foundation Customers using data/AI Operating safe & secure digital platforms Partners UPDATE THE National Building a resilient social infrastructure and local governments Reinforcin
Slide 50: 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 51: 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 52: 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 53: 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 54: 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 55: 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