Slide 1: FY2024.6 Q2 Presentation Material
FY2024.6 Q2 Presentation Material mercari
Slide 2: Group Mission
Group Mission Circulate all forms of value to unleash the potential in all people 2
Slide 3: Table of Contents
Table of Contents 1 Summary 2 Financial Highlights 3 Financial Policies 4 ESG 5 Appendix 3
Slide 4: Summary
Summary 4
Slide 5: FY2024.6 Q2—Progress & Highlights
1 FY2024.6 Q2—Progress & Highlights Consolidated ● Achieved our highest-ever revenue as a result of the steady growth of each of our businesses and the creation of Group synergy ● Executed management that consciously balanced profitability while investing in future growth and, as a result, recorded c
Slide 6: FY2024.6 Q2—KPI Summary
1 FY2024.6 Q2—KPI Summary Marketplace Fintech US Users4 GMV1 GMV1 16.83 million 280.9 billion JPY 239 million USD 5 YoY +10% Credit Balance YoY -12% 154.9 billion JPY Adjusted2 Core Operating Margin3 MAU7 37% Collection Rate6 5.07 million (YoY -5 ppts) 99.1% (YoY -2%) 1. Aggregate transaction value
Slide 7: FY2024.6 Q2 Consolidated Revenue & Core Operating Profit by Business
FY2024.6 Q2 Consolidated Revenue & Core Operating Profit1 1 by Business (IFRS) (Billion JPY) FY2023.6 Q2 FY2024.6 Q2 YoY Core Operating Core Operating Revenue/ Revenue/ Revenue/ Operating Profit/ Profit/ Profit/ Segment Adjusted2 Adjusted2 Core Adjusted Adjusted Core Adjusted Adjusted Core Revenue Reven
Slide 8: FY2024.6 Q2 Financial Highlights
FY2024.6 Q2 Financial Highlights 8
Slide 9: Consolidated Revenue & Core Operating Profit (Quarterly)
2 Consolidated Revenue & Core Operating Profit (Quarterly) ● Achieved our highest-ever revenue, and continuing from Q1, core operating profit grew substantially YoY as expected ● However, because we plan to increase investment for the purpose of obtaining more Mercard users and to increase incremental
Slide 10: Marketplace—FY2024.6 Q2 Progress
2 Marketplace—FY2024.6 Q2 Progress Focus on top-line growth while continuing disciplined investments. Business Objectives Aim to achieve GMV growth of 10% or higher and adjusted1 core operating margin2 of at the Start of 30–40% by focusing on strengthened areas in addition to marketing investments a
Slide 11: Marketplace—GMV/MAU (Quarterly)
2 Marketplace—GMV/MAU (Quarterly) ● Marketing initiatives for such things as the loyalty program and areas to enhance (crossborder transactions, category growth, and B2C) contributed to the GMV growth rate of 10% YoY ● MAU grew owing to such things as increased media exposure through offline initiati
Slide 12: Marketplace—Revenue & Adjusted Core Operating Profit (Quarterly)
Marketplace—Revenue & Adjusted Core Operating 2 Profit (Quarterly) ● In association with an increase in GMV, we achieved steady growth of revenue and high profitability Revenue Adjusted1 Core Operating Profit/Margin2 (Billion JPY) YoY (Billion JPY) YoY +7% Billion -5ppts JPY YoY Billion -3% JPY 1. Figu
Slide 13: Marketplace—Cost Composition (Quarterly)
2 Marketplace—Cost Composition (Quarterly) ● Promotional cost ratio increased QoQ due to the strengthening of investment in areas to enhance and other initiatives that will contribute to mid-to-long-term growth (leveraging multiple categories and the cross-use of the actions of pay, buy, and sell) 1
Slide 14: Marketplace—Progress of Product Initiatives for GMV Growth
2 Marketplace—Progress of Product Initiatives for GMV Growth ● In the first half of the fiscal year, we focused on both marketing investment and product enhancement coinciding with the high-demand period ● In particular, for areas to enhance such as category growth, the promotion of UX improvements fo
Slide 15: Marketplace—The Strengths of Our New Business (On-Demand Labor)
Marketplace—The Strengths of Our New Business 2 (On-Demand Labor Business) ● Mercari is joining the on-demand labor business in order to add time and skills to the Mercari ecosystem and accelerate the circulation of all forms of value ● We are now working on product development and partner acquisiti
Slide 16: Fintech—FY2024.6 Q2 Progress
2 Fintech—FY2024.6 Q2 Progress Business Objectives at the Start of Focus on acquiring Mercard holders and aim to FY2024.6 enhance Group synergy Strengthened investment to acquire Mercard holders and successfully reached 2.5 million cards issued. Also continued to see the effects of Mercard on increa
Slide 17: Fintech—Revenue and Core Operating Profit (Quarterly)
Fintech—Revenue and Core Operating Profit (Quarterly) 2 Breakdown of core operating profit3 ● Revenue increased due to the growth of fixed-amount payment and Mercard ● In light of the creation of fruitful Group synergy associated with Mercard, in the second half of the fiscal year we plan to further str
Slide 18: Fintech—Growth of Mercard
2 Fintech—Growth of Mercard ● Since the November 2022 launch of Mercard, we have issued more than 2.5 million cards by employing effective marketing strategies that leverage our user base ● Taking advantage of the features of Mercard, in the second half of the fiscal year, we will further Over 2.5M c
Slide 19: Fintech—Credit Balance and Collection Rate of Credit Services
Fintech—Credit Balance and Collection Rate of Credit Services 2 (Quarterly) ● Continued to expand credit balance due to the growth of fixed-amount payment and Mercard ● Achieved the highest ever 11-month collection rates by updating credit logic periodically and strengthening collection actions Billi
Slide 20: Fintech—Approach to Financing for Credit Services
2 Fintech—Approach to Financing for Credit Services ● From FY2023.6, we have introduced non-recourse financing1, which allows us to finance based on confidence in Merpay Smart Payments credit itself rather than company credit, enabling us to expand our financing alongside the growth of our credit servic
Slide 21: Fintech—Number of Users/Verified Users (Quarterly)
2 Fintech—Number of Users1/Verified Users (Quarterly) ● The numbers of both users and verified users continued to increase steadily, with the identity verification rate breaking 90% ● In addition to building an environment for safe and secure transactions, increasing the percentage of verified users als
Slide 22: US—FY2024.6 Q2 Progress
2 US—FY2024.6 Q2 Progress Business Objectives Focus on refining the product to strengthen retention of at the Start of existing users and aim to get back on track for growth FY2024.6 Focus on engaging Gen Z for future growth Adjusted operating loss1 continued to shrink YoY as a result of continuing d
Slide 23: US—GMV/MAU (Quarterly)
2 US—GMV/MAU (Quarterly) ● MAU increased QoQ for the second quarter in a row thanks to effective marketing initiatives ● As expected at the beginning of FY2024.6, GMV growth landed at -12% YoY due to the continued slowdown in purchases caused by external factors such as prolonged inflation GMV1/MAU2
Slide 24: US—Revenue/Adjusted Operating Profit (US GAAP/Quarterly)
2 US—Revenue/Adjusted Operating Profit (US GAAP/Quarterly) ● Adjusted operating loss improved significantly YoY due to robust management, including ongoing selective investments Revenue Adjusted Operating Profit1 (Million USD) (Million USD) Million USD YoY -11% Million USD 1. Adjusted operating profit a
Slide 25: US—Progress on Product Initiatives to Attract Gen Z
2 US—Progress on Product Initiatives to Attract Gen Z Launched a Proof of Concept of Launched a Community Feature1 Face-to-Face Transactions2 ● Launched a community feature to encourage interaction ● Launched a proof of concept of a face-to-face transaction between users interested in a specific cate
Slide 26: Approach to H2
2 Approach to H2 ■ Anticipating mid-to long-term growth, expect to increase investment for the purpose of Conso- obtaining more Mercard users aiming to create further Group synergy, and also expect to 連結 lidated incrementally increase investment in our on-demand labor business; as a result, we do no
Slide 27: Financial Policies
Financial Policies 27
Slide 28: Financial Policies
3 Financial Policies ● Strengthen our capital through management focused on balancing growth with profitability Consolidated ● Diversify debt financing methods, lengthen financing periods, and spread out repayment periods to strengthen our financial foundation ● Promote non-recourse1 receivable liquidat
Slide 29: ESG
ESG 29
Slide 30: ESG—Making Donations Easier
4 ESG—Making Donations Easier ● Launched the Mercari Donation: Easy Donation Setting1 feature, which enables users to automatically donate an amount of their choice from their sales proceeds, as a step toward realizing a society where people can donate money regularly and seamlessly ● On January 2,
Slide 31: ESG—Impact Report and ESG Information Session
4 ESG—Impact Report and ESG Information Session ● In September 2023, we published the FY2023.6 Impact Report summarizing our ESG initiatives and results in FY2023.6 ● In December 2023, we held our first ESG Information Session for institutional investors and analysts, where we explained Mercari Group
Slide 32: Focus Areas and Objectives for each Material Topic
4 Focus Areas and Objectives for each Material Topic Material Topic Focus Areas FY2024.6 Objective Empowerment of Realize a world where all people’s potential 1 Individuals and is unleashed Society Creating a World That ● Achieving sustainable business growth Work across the Group to maximize Market
Slide 33: Appendix
Appendix 33
Slide 34: Transition to a Company with Three Committees, a Global Standard
5 Transition to a Company with Three Committees, a Global Standard ● Separated supervisory and executive functions of the company to clarify their roles, and built a structure that realizes the timely and resolute decision-making and business promotion of the executive function while strengthening t
Slide 35: New Board of Directors Structure
5 New Board of Directors Structure ● Appointing Outside Directors with a wealth of knowledge and experience in a variety of areas to realize a transparent and highly diverse organization 10 Directors Directors (4) Independent Outside Directors (6) Shintaro Yamada Fumiaki Koizumi Makiko Shinoda Masay
Slide 36: Strong Governance Structure (Independent Outside Directors)
5 Strong Governance Structure (Independent Outside Directors) Makiko Shinoda Chair of the Masayuki Watanabe Takuya Kitagawa Compensation Committee Background • The Long-Term Credit Bank of Japan, Limited • McKinsey & Company, Inc. • Managing Executive Officer, CDO of (currently SBI Shinsei Bank, Limi
Slide 37: Strong Governance Structure (Independent Outside Directors)
5 Strong Governance Structure (Independent Outside Directors) Daiken Tsunoda Kazuhiko Toyama Fumiyuki Fukushima Chair of the Audit Chair of the Nominating Committee Committee Background • Admitted to the Tokyo Bar Association, Partner of Mori Sogo • Boston Consulting Group • Koyo Audit Firm • Nakamu
Slide 38: Business Segments
5 Business Segments Japan Region Marketplace Fintech US Others Adjustments C2C Payment C2C Kashima Antlers Company-wide (Mercari) (Merpay) (Mercari [US]) expenses B2C Credit India Center of Consolidated (Mercari Shops) (Merpay) Excellence adjustments New Business Crypto (Mercoin) 38
Slide 39: Mercari Plans Medium-Term Targets
5 Medium-Term Long Targets term Growth & Investment Image of Mercari Plans Group Business Medium-Term Objectives Future Major Area Investment Areas ● Strengthening AI, LLM, and data ■ Work with external partners to realize an ecosystem infrastructure Group- that leads the move to a circular economy
Slide 40: Investment Policies
5 Investment Policies Through FY2022.6 H1 FY2022.6 H2–FY2023.6 FY2024.6 ■ Work with external partners to create an ecosystem that leads the move to a circular economy Mid-term ■ Establish a borderless organization where talent from all over the world can thrive objectives ■ Promote further global ex
Slide 41: FY2024.6—Investment Policy and Details by Business
5 FY2024.6—Investment Policy and Details by Business Investment policy and main investments Focus on top-line growth while continuing disciplined investments ■ Acquiring new users ■ Strengthening the loyalty program Marketplace ■ Accelerating GMV growth through UX evolution and areas to enhance such
Slide 42: Number of Employees (Consolidated)
5 Number of Employees (Consolidated) ● Headcount increased QoQ as a result of hiring to grow our existing businesses and create new businesses ● Focusing mainly on engineers, we will continue to hire the talent we need to match the growth of our businesses going forward (Employees) 42
Slide 43: Consolidated BS (IFRS)
6 Consolidated BS (IFRS) Financial Results Presentation Material ah FY2023.6 FY2024.6 (Million JPY) 04 Q2 Cash and cash equivalents 201,822 185,173 Trade and other receivables 126,752 165,836 Total current assets 338,645 362,123 Guarantee deposits 61,608 76,607 Total non-current assets 79,704 94,454
Slide 44: Major Itemization of Consolidated BS
5 Major Itemization of Consolidated BS ● We will continue to leverage various methods of financing and appropriately control our balance sheet to maintain a sound financial foundation ● Our basic policy for financing our credit services is to primarily carry out financing by liquidating receivables ○ In
Slide 45: Transition to Disclosure Based on IFRS
5 Transition to Disclosure Based on IFRS ● With the objective of enhancing international comparability, we transitioned to using IFRS in FY2024.6 Q1 ● Japan Region now uses core operating profit (defined as IFRS operating profit excluding other income/expenses, etc.) as a KPI, but the impact of the cha
Slide 46: Consolidated Quarterly PL (IFRS)
5 Consolidated Quarterly PL (IFRS) 1 2 1. Core operating profit + Depreciation 46 2. Core operating profit is defined as IFRS operating profit excluding other income/expenses, etc. (see p. 45)
Slide 47: Consolidated CF (IFRS)
6 Consolidated CF (IFRS) Financial Results Presentation Material (Million JPY) Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Effect of exchange rate changes on cash and cash equivalents Change in cash and cash equivalents Cash and cash
Slide 48: Marketplace Quarterly PL (IFRS)
5 Marketplace Quarterly PL (IFRS) 1 1 2 1. Core operating profit is defined as IFRS operating profit excluding other income/expenses, etc. (see p. 45) 48 2. Figures after adjustment exclude internal transactions between Marketplace and Fintech (outsourced payment processing fees)
Slide 49: Fintech Quarterly PL (IFRS)
5 Fintech Quarterly PL (IFRS) 2 2 1 1. Figures after adjustment exclude internal transactions between Marketplace and Fintech (outsourced payment processing fees) 49 2. Core operating profit is defined as IFRS operating profit excluding other income/expenses, etc. (see p. 45)
Slide 50: US Quarterly PL (US GAAP)
5 US Quarterly PL (US GAAP) 1 1. Adjusted operating profit after non-cash items (i.e., stock-based compensation and depreciation) are deducted 50
Slide 51: Japan Region—Group Synergy Overview
5 Japan Region—Group Synergy Overview ● Aiming to create synergy with Marketplace and Fintech working together to enhance UX and carry out marketing Japan Region Identity-verified users: approx. 15M MAU: over 23.5M Mercards issued: over 2.5M GMV: approx. 1T JPY Sales balance, points, data, MAU Crypto
Slide 52: Marketplace—Cost Composition (Quarterly)
5 Marketplace—Cost Composition (Quarterly) ● Promotional cost ratio increased QoQ due to the strengthening of investment in areas to enhance and other initiatives that will contribute to mid-to-long-term growth (leveraging multiple categories and the cross-use of the actions of pay, buy, and sell) (
Slide 53: Q2 (Oct–Dec)—Category Shift
5 Q2 (Oct–Dec)—Category Shift Marketplace US FY2023.6 FY2024.6 FY2023.6 FY2024.6 Q2 Q2 Q2 Q2 53
Slide 54: Marketplace App Market Data
5 Marketplace App Market Data ● Mercari’s GMV share continues to grow in the expanding online C2C market Estimated value of unneeded items1 2022 Online C2C market2 7.6 Approx. 2.3 trillion JPY Annually 2021 Marketplace app market3 Approx. Approx. 1.2 trillion JPY trillion JPY 2022 Mercari GMV4 Appro
Slide 55: Fintech—Services
5 Fintech—Services Asset Payment Credit Management Various payment methods available Various services that utilize unique credit based on Service that allows users behavior history such as usage history on Mercari to buy and sell bitcoin from within Mercari Smart Payments iD payment Credit Card Hold
Slide 56: Fintech—Credit Volume of Deferred Payment in the EC Market
5 Fintech—Credit Volume of Deferred Payment in the EC Market1 ● The amount of deferred payments in the EC market is growing ● A high rate of market growth is forecast for the future Approx. 2 trillion JPY 1,082 billion JPY 440 億円 4,400 billion JPY Outlook Forecast Forecast Forecast Forecast 1. Sourc
Slide 57: US—US Reuse Market
5 US—US Reuse Market ● The US online reuse market is expected to grow at a pace approximately triple that of the offline market between 2022 and 2031 and overtake the offline market in size in 2026 2030 Forecast US Reuse Market $180 billion Offline market Online market (Billion USD) 2022 $74 billion 1.
Slide 58: US—Market Positioning
5 US—Market Positioning ● Aiming to be "the easiest and safest selling app" by providing a variety of delivery options in addition to continuing to pursue ease of use toward establishing a unique positioning in the US market ● Strengthening regular delivery and expanding transaction methods to enhan
Slide 59: For Investors New to Mercari
5 For Investors New to Mercari ● Materials that cover basic information regarding Mercari Group Fact Book link Overview link https://speakerdeck.com/mercari_inc/mercari-fact-book-en https://speakerdeck.com/mercari_inc/merpay-overview-en 59
Slide 60: Disclaimer
Disclaimer This material has been prepared based on information gathered at the time of its preparation and is not in any way intended as a commitment to future implementation. Also note that information contained herein has not been audited or reviewed by an independent certified public accountant o