Ly Corporation · TSE:4689
Ly — Yahoo Japan — Q1 FY2019 Earnings Presentation
49 slides from Ly's earnings presentation, Aug 2, 2019
Slide 1: Yahoo Japan Corporation FY2019-1Q Business Results
Yahoo Japan Corporation FY2019-1Q Business Results August 2, 2019 Security code: 4689
Slide 2: 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 Yahoo Japan Corporation (Company, Yahoo! JAPAN) and its consolidated subsidiaries and affiliates. The Company cautions you that a number
Slide 3: Table of Contents
Table of Contents 1 FY2019-1Q Financial Results 2 Summary of Business Segments 3 Strategic Measures 4 Appendix 1
Slide 4: FY2019-1Q Financial Results
FY2019-1Q Financial Results 2
Slide 5: FY2019-1Q Consolidated Income Statement
FY2019-1Q Consolidated Income Statement Item FY2018-1Q FY2019-1Q YoY Revenue 231.8 (¥B) 238.6 (¥B) +2.9 % Operating income 47.5 (¥B) 36.1 (¥B) -24.0 % EBITDA *1 60.0 (¥B) 54.0 (¥B) -10.0 % Other non-operating income and expenses*2 0.6 (¥B) 11.0 (¥B) +1,510.8 % Equity in earnings of associates and jo
Slide 6: FY2019-1Q Factors of Change in Consolidated Operating Income
FY2019-1Q Factors of Change in Consolidated Operating Income Decrease in income for 1Q is as expected due to one-time gain recorded in FY2018-1Q Item Amount (¥B) Major factors (¥B) FY2018-1Q Result 47.5 Revenue +6.7 ASKUL＋2.1; Advertising revenue ＋1.8 Cost of sales -0.8 SG&A (major items only↓) -9.3
Slide 7: Each business base expanding steadily
Business Base Each business base (commerce, media, financial & payment) expanding steadily EC transaction value No. of monthly logged-in user IDs Credit card transaction value （¥ B） （Mil IDs） （¥ B） 700 More than 2X since 60 16 consecutive quarters of 450 More than 4X in 600 new EC strategy* YoY doub
Slide 8: FY2019 Full Year Guidance (Consolidated Basis)
FY2019 Full Year Guidance (Consolidated Basis) Steady progress - no change in guidance Item FY2019 (estimate) YoY Progress Revenue Over ¥1 T ＋5 to 7 % 24 % Operating income ¥ 140.6 to 150.0 B ±0 to +7 % 24 to 26 % Net income attributable ¥ 79.0 to 85.0 B ±0 to +8 % 33 to 35 % to owners of the parent
Slide 9: Summary of Business Segments
Summary of Business Segments 7
Slide 10: Revenue Growth Image by Segments
Revenue Growth Image by Segments Commerce Business is the key strategic driver Data solution for a dramatic growth and earnings diversification Fintech New fields to pioneer E-commerce (excl. ASKUL Group) Integrated marketing solution, Commerce shopping advertising business Media Paid search adverti
Slide 11: Commerce Business
Commerce Business 9
Slide 12: FY2019-1Q Commerce Business – Uses
FY2019-1Q Commerce Business – Uses Commerce Business base Membership growing steadily Finance O2O Item Details 2 Credit card transaction value exceeded Payment ¥400 B, +49% YoY 2 Payment 1 Shopping transaction value Base E-commerce maintained high YoY growth of +17% 1 E-commerce 10
Slide 13: FY2019-1Q Commerce Business – KPI
FY2019-1Q Commerce Business – KPI Item Actual result YoY Measures / Factors of change EC transaction value 584.0 (¥B) ＋8.8 % EC transaction value 475.6 (¥B) ＋5.4 % (Sale of goods) Yahoo! Shopping grew approx. +20% Negative 6% growth in LOHACO Shopping transaction value 204.0 (¥B) ＋16.5 % (including
Slide 14: New Service: PayPay Mall
New Service: PayPay Mall To be launched in Fall 2019 NEW Mall Premium shopping mall Items of PayPay Features Mall will be displayed in both 1. Only for stores that meet our criteria websites 2. UI/UX that is optimized for each product category 3. Return/exchange allowed * Illustrative purpose only (
Slide 15: New Service: PayPay Flea Market
New Service: PayPay Flea Market To be launched in Fall 2019 Smartphone app that focuses on NEW simple buy and sell Flea Market Features 1. Specializes in flea market 2. Linked with YAHUOKU! Sales commission TBA Note: “PayPay” is a registered trademark of Yahoo Japan Corporation. 13
Slide 16: FY2019 Full Year Commerce Business – Targets
FY2019 Full Year Commerce Business – Targets Aim for double-digit growth for EC transaction value (sale of goods) leveraging new services: PayPay Mall, PayPay Flea Market, etc. Item Target (YoY) EC transaction value +Double-digit % (sale of goods) Shopping transaction value ＋20 % YAHUOKU! transactio
Slide 17: Media Business
Media Business 15
Slide 18: FY2019-1Q Media Business – Uses
FY2019-1Q Media Business – Uses Display Paid search advertising advertising Media’s user base steadily YDN, etc. Premium growing mainly in smartphones Brand Panel Item Details YDN Prime 2 Display Time spent by Premium DSP Shopping logged-in users +19% YoY growth Advertising via smartphones 2 Time sp
Slide 19: FY2019-1Q Total Advertising Revenue - Results
FY2019-1Q Total Advertising Revenue - Results Item Actual result YoY Measures / Factors of change Total advertising revenue 78.2 (¥B) ＋2.4 % While CTR improved with a new measure (change in QuickLink Option displays), low-single digit revenue growth because: • Effect of last year’s UI measures wore
Slide 20: Impact of Anti-Tracking
Impact of Anti-Tracking Background Impact on our total advertising revenue Anti-tracking intensifying FY2018 Total advertising revenue due to rise in awareness Approx. ¥325 billion towards privacy protection Paid search advertising Approx. ¥165 B ▶ Decrease in retargeting ads YDN, etc. Approx. ¥110
Slide 21: Short-Term Measures to Increase Advertising Revenue
Short-Term Measures to Increase Advertising Revenue 1 Raise log-in ratio and promote 3 Integrate ad platform to maximize targeting based on Yahoo! ID ad effect Now Around fall 2019 (plan) Segmented products Integrate into 2 Focus in three areas that have Yahoo! Ads Guarantee room for growth -based P
Slide 22: Mid- to Long-Term Measures to Increase Marketing Revenue
Mid- to Long-Term Measures to Increase Marketing Revenue Create new monetizing models & multiple earnings bases Integrated Marketing Solution O2O Online commerce ads Comprehensive service that uses For stores of Test marketing Yahoo Japan PayPay to encompass underway Group’s EC services user attract
Slide 23: FY2019 Full Year Media Business – Targets
FY2019 Full Year Media Business – Targets Current full year outlook: low-single digit YoY growth New measures will be added to achieve initial target Item Target (YoY) Total advertising revenue +Mid-single digit to double digit % Paid search advertising +High-single digit % Display advertising +Mid-
Slide 24: Strategic Measures
Strategic Measures 22
Slide 25: PayPay
PayPay 23
Slide 26: PayPay – KPI
PayPay – KPI Business base for smartphone payment –steadily growing No. of registered users No. of merchants No. of payments Name awareness ▶1st ¥10B ▶2nd ¥10B Exceeded 9.5 mil Campaign Campaign in August 1Q Company A 1Q Company B Company C 4Q 4Q 3Q 3Q Source: Survey by 3Q 4Q 1Q 3Q 4Q 1Q PayPay Corp
Slide 27: PayPay – Recap of Second Campaign
PayPay – Recap of Second Campaign Campaign resulted in a large increase in the number of PayPay payments 1st ¥10 B campaign 2nd ¥10 B campaign 25
Slide 28: PayPay - Measures
PayPay - Measures Payment and bonus provision in both offline and online worlds Offline Online FY18 result Yahoo! Shopping PayPay bonus ¥700B equivalent Fixed-term T Points payment possible To be changed to PayPay Money Lite PayPay Bonus PayPay Bonus Lite PayPay Bonus Lite (Aug. 2019 - ) YAHUOKU! Pa
Slide 29: PayPay’s Potential
PayPay’s Potential Comparison of cashless payments Advantages of PayPay Credit cards Transportation IC Smartphone payment Short term Mid-long term • Payment commission • Marketing • Cheap payment *Free until end of Sep. 2021 for • High payment • High payment commission • Use of data Merchants user s
Slide 30: Change in Capital Structure
Change in Capital Structure 28
Slide 31: Consolidation by SoftBank Corp.
Consolidation by SoftBank Corp. To achieve further growth and improve corporate value Until June 26, 2019 From June 27, 2019 AI AI SoftBank Group Corp. SoftBank Group Corp. （SoftBank Group Japan Corporation） （SoftBank Group Japan Corporation） 66% 36% 66% SoftBank Corp. SoftBank Yahoo Japan 45% Corp.
Slide 32: Under the New Structure, We Aspire to Be
Under the New Structure, We Aspire to Be: World’s largest “information communications group” to create a future that can’t be rivaled Wide array of Internet services Communication (5G) /Smartphone/Robot/IoT, etc. IoT © SoftBank Robotics A total of 100 million+ user base & big data 30
Slide 33: Synergies with SoftBank
Synergies with SoftBank Synergies created Future synergies Digital Corporate marketing users subscribers sales power products Collaborative measures for Premium members, & Collaborative measures in digital marketing E-commerce benefits EC transaction value Ad revenue 31
Slide 34: Yahoo Japan Corporation Aspires to
Yahoo Japan Corporation Aspires to: Make our users’ lives convenient to a surprising (!) extent through Yahoo! JAPAN services Online world Even more convenient Offline world New entry 32
Slide 35: Appendix
Appendix 33
Slide 36: FY2019-1Q Statement of Financial Position
FY2019-1Q Statement of Financial Position Consolidated (IFRS) The Japan Net Bank, Limited (JGAAP) YJ Card Corporation (JGAAP) FY2018 FY2019 FY2018 FY2019 FY2018 FY2019 (¥ B) Difference (¥ B) Difference (¥ B) Difference 4Q 1Q 4Q 1Q 4Q 1Q Assets 2,429.6 2,586.4 156.8 Assets 878.7 892.5 13.8 Assets 353
Slide 37: Image of Our Long-Term Revenue Composition
Image of Our Long-Term Revenue Composition We will continue to grow while drastically changing our revenue composition to meet the changes in the business environment Data solution Fintech E-commerce (excl. ASKUL Group) Integrated marketing solution, shopping advertising Paid search advertising, dis
Slide 38: Operating Income – Long-Term Outlook
Operating Income – Long-Term Outlook Businesses to be strengthened (Shopping advertising, Integrated marketing FY19 ー FY22 solution, Financial & Payment, Membership, YAHUOKU!) Advertising income – base (Paid search advertising, display advertising) By investing in measures to expand users and EC
Slide 39: Materiality Matrix for Yahoo Japan Corporation
Materiality Matrix for Yahoo Japan Corporation The numbers and colors in the matrix 11 17 coincide with the SDG icons. Solving social Corporate Issues with 9 governance IT Data 4 Quality Education security 11 17 Disaster measures/ 8 9 Recovery support 5 Gender Equality Level of stakeholder concern H
Slide 40: Yahoo! JAPAN Service Map
Yahoo! JAPAN Service Map ヤフーのサービスマップ Media Commerce Digital Contents ebookjapan Shopping Fortune telling Game TOP page Weather/Disaster News Finance (Digital books) Auction Sports navi GYAO! O2O Knowledge search (Sports news site) (Video streaming) ASKUL Real Travel Restaurant (B to B EC) estate boo
Slide 41: Business Segment Breakdown
Business Segment Breakdown Paid search advertising “Sponsored Search”, Advertising Display advertising (“Yahoo! Display Ad Network (YDN)”, “Premium Advertising”) Media Business Business Services Media-related services, CRM-related services and others Personal Services Video-related services and othe
Slide 42: Advertising Products
Advertising Products Advertising Products Main Format Fee Calculation Placement Pages Main Advertiser Base Paid search Search results Sponsored Search® Text advertising pages Per-click rate Major corporations (Performance-based) *2 Text Yahoo! Display Ad Banner Small and medium-sized Network compani
Slide 43: Definition of EC Transaction Value
Definition of EC Transaction Value YAHUOKU! Shopping Yahoo! Shopping, Business LOHACO, Charm EC transaction value (sale of goods) ASKUL BtoB EC transaction Other Yahoo! Tickets, Ouchi-Direct value (sale of goods) Ikyu, Yahoo! Travel, O2O Yahoo! Dining EC transaction value (non-sale of goods) Other F
Slide 44: Shopping Advertising Take Rate and Percentage of Point-Reward Expenses in Yahoo! Shopping
Shopping Advertising Take Rate*1 and Percentage of Point-Reward Expenses*2 in Yahoo! Shopping Shopping advertising take rate % of point-reward expenses 0 FY2016 FY2017 FY2018 FY2019 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q *1 Shopping advertising take rate = Shopping-Related Advertising revenue / Yaho
Slide 45: PayPay – Business Model
PayPay – Business Model Maximize the base and develop various earning pillars O2O Ads Finance Yahoo Japan domain Accumulate data＋Increase balance PayPay domain No. of merchants Online linkage/ No. of users No. of payments offline merchants 43
Slide 46: Transition to a Holding Company Structure through Company Split
Transition to a Holding Company Structure through Company Split Transition to a holding company structure for an expeditious promotion of business strategies Until September 30, 2019 After October 1, 2019 Listed Listed Yahoo Japan Corporation Z Holdings Corporation Management of the whole group New
Slide 47: Organization Chart of Yahoo Japan Corporation
Organization Chart of Yahoo Japan Corporation As of the end of June 2019 President & Representative Director / CEO Board of Directors Business Promotion Group CFO Audit and Media Services Group （Chief Financial Officer） Supervisory Shopping Services Group Committee CTO Commerce O2O Services Group Me
Slide 48: Consolidated Subsidiaries and Affiliates
Consolidated Subsidiaries and Affiliates As of the end of Jun. 2019 Major consolidated subsidiaries ASKUL Corporation Astmax Asset Management, Inc. Carview Corporation CLASSIFIED Corporation Dynatech inc. eBOOK Initiative Japan Co., Ltd. GYAO Corporation Ikyu Corporation Passrevo Corporation The J
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