Ly Corporation · TSE:4689
Ly — Yahoo Japan — Q2 FY2016 Earnings Presentation
54 slides from Ly's earnings presentation, Nov 1, 2016
Slide 1: FY2016-2Q Business Results
Yahoo Japan Corporation FY2016-2Q Business Results (July - September 2016) November 1, 2016
Slide 2: Table of Contents
Table of Contents P. 4 FY2016-2Q Financial Highlights P. 17 Core Businesses (Advertising/Auctions/Membership Services) P. 25 Upfront Investment-Stage Businesses (Shopping/Credit Card) P. 36 Mid-Term Growth Strategies P. 47 Business Results Supplemental Information Unless otherwise specified, English
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: FY2016-2Q Financial Highlights
FY2016-2Q Financial Highlights 4
Slide 5: Executive Summary for FY2016-2Q ①
Executive Summary for FY2016-2Q ① Revenue 205.3 (¥B) YoY +48.5% Operating income YoY -51.8% 49.5 (¥B) Adjusted operating income YoY +14.9%* EBITDA YoY -46.1% 58.9 (¥B) Adjusted EBITDA YoY +18.8%* Net income attributable to owners of the parent YoY -63.2% Adjusted net income attributable to 33.6 (¥B)
Slide 6: Executive Summary for FY2016-2Q ②
Executive Summary for FY2016-2Q ② Via smartphones Advertising-related revenue 69.4 (¥B) YoY +5.7% 49.5% Display advertising 34.5 (¥B) YoY +16.7% Paid search advertising 34.8 (¥B) YoY -3.4% Via smartphones (*2) Total domestic e-commerce transaction value (*1) 432.4 (¥B) YoY +29.7% 45.5% ASKUL Corpora
Slide 7: Executive Summary for FY2016-2Q ③
Executive Summary for FY2016-2Q ③ Advertising-Related Business -The rate of decrease in paid search advertising revenue significantly contracted. -Display advertising revenue continued to achieve double-digit growth. e-Commerce-Related Business -e-Commerce-related revenue increased significantly as
Slide 8: Revenue
Revenue (¥Billion) 205.3 billion YoY +48.5% 200 138.2 100 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q JGAAP IFRS Gross basis Net basis Note: Between FY2008 and FY2012, we indicated revenue on a net rather than gross basi
Slide 9: Quarterly Revenue Breakdown
Quarterly Revenue Breakdown (¥Billion) Marketing Solutions Business 205.3 16.3 YoY +4.9% Recovery in the growth rate of +1.2 advertising-related revenue 138.2 Includes Consumer Business (*) 15.1 122.1 ASKUL’s revenue and YoY 2.0 x 59.6 +62.4 others (*) Consolidation of ASKUL Corporation Other Busine
Slide 10: Operating Income
Operating Income 49.5 billion YoY -51.8% 102.7 100 59.6 (*) 50 43.0 49.5 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q JGAAP IFRS * Gain from remeasurement relating to business combination with ASKUL Corporation 10
Slide 11: Adjusted Operating Income
Adjusted Operating Income (¥Billion) 49.5 billion YoY +14.9% 50 (*) 43.0 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q JGAAP IFRS * Operating income for FY2015-2Q has been adjusted by excluding the gain from remeasurement
Slide 12: EBITDA
EBITDA 58.9 billion YoY -46.1% 109.3 100 59.6 (*) 50 58.9 49.6 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q JGAAP IFRS Note: EBITDA = operating income (loss) + depreciation and amortization Figures for FY2012 and before a
Slide 13: Adjusted EBITDA
Adjusted EBITDA 58.9 billion YoY +18.8% (*) 49.6 50 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q JGAAP IFRS Note: EBITDA = operating income (loss) + depreciation and amortization Figures for FY2012 and before are those of
Slide 14: Sales Promotional Activities
Sales Promotional Activities Promotion cost decreased year on year due to further streamlining (¥Billion) Breakdown of sales FY2014 FY2015 FY2016 promotion costs (*1) Shopping 50% YAHUOKU! 20% 18.6 Financial & Payment 20% 13.7 Video services, etc. (*2) 10% 9.5 6.5 4.0 4.2 5.2 4.6 4.3 4.9 1Q 2Q 3Q 4Q
Slide 15: Net Income Attributable to the Owners of the Parent
Net Income Attributable to the Owners of the Parent 33.6 billion (¥Billion) YoY -63.2% 100 91.3 59.6 (*) 50 31.6 33.6 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q JGAAP IFRS * Gain from remeasurement relating to business
Slide 16: Adjusted Net Income Attributable to the Owners of the Parent
Adjusted Net Income Attributable to the Owners of the Parent (¥Billion) 33.6 billion YoY +6.1% 40 (*) 31.6 30 20 10 0 FY2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q JGAAP IFRS * Figure for FY2015-2Q has been adjusted by exclu
Slide 17: Core Businesses
Core Businesses Advertising Auctions Membership Services 17
Slide 18: Advertising-Related Revenue
Advertising-Related Revenue (¥Billion) Display Ad 69.4 Paid Search Ad 65.7 60.5 56.4 18.8 22.3 29.6 +16.7% 34.5 +5.7% 37.5 YoY 38.2 36.1 -3.4% 34.8 FY2013 FY2014 FY2015 FY2016 2Q 2Q 2Q 2Q 18
Slide 19: Paid Search Advertising Revenue – YoY Growth Rate
Paid Search Advertising Revenue –YoY Growth Rate -1.8% -3.4% Improved user experience -5.4% Growing demand among some advertisers -10.4% -10.9% -12.7% FY2015 FY2016 1Q 2Q 3Q 4Q 1Q 2Q 19
Slide 20: Proportion of Advertising-Related Revenue via Smartphones
Proportion of Advertising-Related Revenue via Smartphones 49.5% 41.4% 33.0% 49.5% 19.8% a historic high FY2013 FY2014 FY2015 FY2016 2Q 2Q 2Q 2Q Note: Proportion of advertising revenue via smartphones in total advertising revenue. The prior data have been retroactively adjusted. Contains a part of ad
Slide 21: Core Businesses
Core Businesses Advertising Auctions Membership Services 21
Slide 22: Enhance "Yahoo! Tickets" Services
Enhance "Yahoo! Tickets" Services Yahoo Japan Corporation Operation "Yahoo! Tickets" 51% By the end of 2016, investment Passrevo plan to start a system 49% Corporation in which sold tickets investment Avex Live can be officially resold Creative Inc. 22
Slide 23: Core Businesses
Core Businesses Advertising Auctions Membership Services 23
Slide 24: Enhance "Yahoo! Bookstore" Services
Enhance "Yahoo! Bookstore" Services Made a 44% investment in eBOOK Initiative Japan Co., Ltd. in September 2016. Aim to become No.1 in e-comic market through the synergy. “Yahoo! Bookstore” “eBookJapan” Over half of the users are Over half of the users are female.(*1) male.(*1) One of the biggest me
Slide 25: Upfront Investment-Stage Businesses
Upfront Investment- Stage Businesses Shopping Credit Card 25
Slide 26: Number of Items in Yahoo! Shopping
Number of Items in Yahoo! Shopping (Million) 230 Biggest selection in Japan(*) 120 180 80 (end of month) September September September September 2013 2014 2015 2016 Note: Number of items listed on “Yahoo! Shopping”. 26 * Survey by Yahoo! JAPAN
Slide 27: Shopping Transaction Value
Shopping Transaction Value (¥Billion) 101.1 Exceeded ¥100 billion 79.1 despite controlled spending in 60.8 53.4 promotion costs FY2013 FY2014 FY2015 FY2016 2Q 2Q 2Q 2Q Note: Includes transaction values of Yahoo! Shopping and LOHACO. LOHACO’s transaction value is the revenue (closing date: 20th of ev
Slide 28: Transaction Value during Sale
Transaction Value during: Sale in Support of Fukuoka SoftBank HAWKS advancing to the Climax Series FY2015 FY2016 2Q Yahoo! Shopping transaction value YoY 2 x 29-Sep 30-Sep 1-Oct Note: Transaction value of Yahoo! Shopping. The sale took place from 22:40 on September 28 until 23:59 on October 1. Compa
Slide 29: Shopping Transaction Value – YoY Growth Rate
Shopping Transaction Value –YoY Growth Rate Strategy change +30.2% +27.8% Maintaining +13.7% high growth rates after the strategy change -1.6% FY2013 FY2014 FY2015 FY2016 2Q 2Q 2Q 2Q Note: Includes transaction values of Yahoo! Shopping and LOHACO. LOHACO’s transaction value is the revenue (closing d
Slide 30: Shopping-Related Advertising Revenue
Shopping-Related Advertising Revenue (¥Billion) 3.1 YoY 2.2 x 1.4 0.8 0.8 FY2013 FY2014 FY2015 FY2016 2Q 2Q 2Q 2Q Note: Total of Yahoo Japan Corporation’s non-consolidated Shopping-related advertising revenue; advertising revenue of “StoreMatch”, an advertising product in Yahoo! Shopping sold by Val
Slide 31: Traffic Referrals to Shopping Services Leveraging Membership Base
Traffic Referrals to Shopping Services Leveraging Membership Base Enhance benefits on shopping services for Y!mobile members Non-Premium Premium Y!mobile members members members Rate of points rewarded 1% 5% 10% Normal store points 1% ○ ○ ○ Premium members benefits 4% ○ ○ Initial registration for Y!
Slide 32: Outline of "2016 Good Shopping Day"
Outline of “2016 Good Shopping Day”(*) Each participating company will offer attractive campaigns. Aim to create a nationally-popular shopping culture like Valentine's Day and New Year's sale. FY2015 FY2016 7 days 44 days Duration (October 18 - November 30, (November 5 - 11, 2015) 2016） Number of pa
Slide 33: Upfront Investment-Stage Businesses
Upfront Investment- Stage Businesses Shopping Credit Card 33
Slide 34: Number of Valid Credit Card Holders
Number of Valid Credit Card Holders Launched Yahoo! JAPAN Card (Million) 2.83 YoY 2.0 x 1.41 0.62 0.60 (end of month) FY2013 FY2014 FY2015 FY2016 September September September September Note: Includes card holders of KC Card, Yahoo! JAPAN Card and SoftBank Card (“Omakase charge”). 34
Slide 35: Credit Card Transaction Value
Credit Card Transaction Value Launched Yahoo! JAPAN Card (¥Billion) 118.8 YoY 2.8 x 41.8 15.0 15.7 FY2013 FY2014 FY2015 FY2016 2Q 2Q 2Q 2Q Note: Excludes cash advance service. Includes card holders of KC Card, Yahoo! JAPAN Card and SoftBank Card (“Omakase charge”). 35
Slide 36: Mid-Term Growth Strategies
Mid-Term Growth Strategies 36
Slide 37: Enhance Synergies between Services
Enhance Synergies between Services Leverage the immense traffic in our core businesses to develop the upfront investment-stage businesses Traffic referrals e-Commerce Benefits (Shopping) Yahoo! Media Benefits Premium Traffic Services Benefits referrals members Traffic referrals Traffic referrals Cre
Slide 38: One of the Highest Number of Users in Japan
One of the Highest Number of Users in Japan Number of Daily Unique Browsers (DUBs) (Million) Smartphones (*1) PC+Others (*2) Usage via smartphones 51.61 60.04 39.43 YoY +16.3% 25.34 FY2013 FY2014 FY2015 FY2016 2Q 2Q 2Q 2Q *1 Quarterly average; includes accesses to Yahoo! JAPAN via applications and b
Slide 39: "Yahoo! News" Fared Well
“Yahoo! News” Fared Well Total time spent using services via smartphones(*) (Billion minutes) 1 “Yahoo! News” No.1 News service 0.5 via smartphones as well Company A Company B 0 2014 2015 2016 Apr. Oct. Apr. Oct. Apr. * Survey by Yahoo! JAPAN Estimates based on the unaided survey on service used and
Slide 40: Increase in Logged-in Usage Accelerated
Increase in Logged-in Usage Accelerated Number of Monthly Active User IDs (Million) 36.14 Logged-in Usage Enhanced to strengthen the distribution of appropriately targeted content. 31.45 YoY +14.9% 27.60 28.56 September September September September 2013 2014 2015 2016 40 Note: Monthly number of log
Slide 41: Expand Revenue by Leveraging Big Data
Expand Revenue by Leveraging Big Data Advertising-Related Revenue via Smartphones (¥Billion) 34.4 Premium advertising 27.2 YDN and others 19.9 YoY +35.8% 11.1 Paid search advertising YoY +14.7% 41 FY2013 FY2014 FY2015 FY2016 2Q 2Q 2Q 2Q
Slide 42: Aim to Increase Paid-Membership IDs
Aim to Increase Paid-Membership IDs Number of Monthly Paid-Membership IDs (Million) 17.37 15.99 14.41 14.67 Others “Yahoo! Premium members” YoY +8.9% September September September September 2013 2014 2015 2016 Note: Total of Yahoo! Premium members, Yahoo! BB subscribers, monthly paid-subscribers of
Slide 43: Encourage Premium Members to Use Shopping Services
Encourage Premium Members to Use Shopping Services Usage ratio of “Yahoo! Shopping” among “Yahoo! Premium members” Have used Usage ratio remains stable despite the increase in “Yahoo! Premium members” Have never used 43 Note: Ratio of “Yahoo! Premium members” who used “Yahoo! Shopping” service durin
Slide 44: Creating a Best-Value Mall for Yahoo! Premium Members
Creating a Best-Value Mall for “Yahoo! Premium Members” Transaction value of Yahoo! Shopping Premium Members Proportion of transaction value generated by “Yahoo! Non-Premium Members 57% Premium members” 49% YoY +8% points 42% 42% FY2013 FY2014 FY2015 FY2016 2Q 2Q 2Q 2Q 44
Slide 45: Shopping-Related Business Achieved a Significant Growth
Shopping-Related Business Achieved a Significant Growth Shopping-related transaction value (¥Billion) 169.4 113.9 101.1 Shopping (*1) 89.5 YoY +27.8% 81.3 79.1 53.4 60.8 68.3 Travel and others (*2) 27.8 28.7 34.7 YoY + 96.5% FY2013 FY2014 FY2015 FY2016 2Q 2Q 2Q 2Q *1 Includes transaction values of Y
Slide 46: Aim to Achieve a Well-Balanced Revenue Structure
Aim to Achieve a Well-Balanced Revenue Structure Targeted revenue composition by business segment after adjustment (*) Other Businesses (Financial & Payment, etc.) Consumer Business Marketing Solutions Business FY2014 FY2015 FY2020 Actual Actual Estimate 46 * Currently envisaged image excluding ASKU
Slide 47: Supplemental Information
Supplemental Information 47
Slide 48: 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: Media-related services, CRM-related services, Recruiting-related services and others ・P
Slide 49: 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) *2 Small and Yahoo! Display Text medium-sized Ad Network Banner compani
Slide 50: FY2016 1H Investment Records
FY2016 1H Investment Records Total amount of investments : approx. 11.0 billion yen Major investments Ratio of Companies Date voting rights YJ Tech Investment Partnership May 2016 98.6% *1 Commerce21 Corporation June 2016 100.0% eBOOK Initiative Japan Co., Ltd. September 2016 44.4% Note: Total amoun
Slide 51: Organization Chart of Yahoo Japan Corporation
Organization Chart of Yahoo Japan Corporation President & Representative Director / As of October 1, 2016 CEO SEVPCO / COO SEVPCO / CFO Board of Directors Media & Marketing System Management Audit and Supervisory Solutions Group Corporate Committee Group (872) Management Group Media Company Data & S
Slide 52: Consolidated Subsidiaries and Associates
Consolidated Subsidiaries and Associates (as of September 30, 2016) Major consolidated subsidiaries ASKUL Corporation Carview Corporation Dynatech inc. eBOOK Initiative Japan Co., Ltd. ecohai Co., Ltd. FirstServer, Inc. GYAO Corporation IDC Frontier Inc. Ikyu Corporation Netrus
Slide 53: Corporate Governance System
Corporate Governance System 53
Slide 54: Yahoo! JAPAN
YaHoo! JAPAN