Ly Corporation · TSE:4689
Ly — Z Holdings — FY2022 Q1 Earnings Presentation
43 slides from Ly's earnings presentation, Aug 3, 2022
Slide 1: FY2022 Q1 Business Results
Security Code: 4689 Z Holdings Corporation Business Results FY2022 Q1 August 3, 2022
Slide 2: FY2022 Q1 Business Results – Topics
FY2022 Q1 Business Results – Topics Revenue: JPY390.5 B (YoY +4.6%) / Adjusted EBITDA: JPY86.5 B (YoY +0.2%), both recording YoY increases and the highest record for Q1. • LINE Ads maintained a double-digit growth. Account ads grew more than YoY +20%, due Consolidated to acquisition of new customers
Slide 3: Table of Contents
Table of Contents 1 Consolidated Business Results – Whole Group 2 Topics/Business Results – By Segment 3 FY2022 Business Results Forecast 4 Consolidation of PayPay Corporation
Slide 4: Table of Contents
Table of Contents 1 Consolidated Business Results – Whole Group 2 Topics/Business Results – By Segment 3 FY2022 Business Results Forecast 4 Consolidation of PayPay Corporation
Slide 5: FY2022 Q1 Consolidated Business Results Whole Group
FY2022 Q1 Consolidated Business Results Whole Group • Achieved increases in revenue and adjusted EBITDA due to steady growth in LINE Ads, etc. Segment Item FY2021 Q1 FY2022 Q1 YoY Revenue JPY373.3 B JPY390.5 B +4.6% Whole Group Adjusted EBITDA JPY86.3 B JPY86.5 B +0.2% Adjusted EPS JPY3.56 JPY3.57 +
Slide 6: FY2022 Q1 Strategic Investments – Results
FY2022 Q1 Strategic Investments – Results Whole Group • In Q1, executed strategic investments of approximately JPY10 B mainly in Commerce Business. Due to the consolidation of PayPay Corporation, strategic investment towards PayPay Card has not been implemented since efficiency in sales promotion wi
Slide 7: Table of Contents
Table of Contents 1 Consolidated Business Results – Whole Group 2 Topics/Business Results – By Segment 3 FY2022 Business Results Forecast 4 Consolidation of PayPay Corporation
Slide 8: Media Business
Media Business
Slide 9: Media Business of Z Holdings – Competitive Edges
Media Business of Z Holdings – Competitive Edges Media Business 1. First party data obtained from rich touchpoints/conversion points 2. Possession of search service in addition to display ads, that provides touchpoints 3. LINE Official Account, the Company’s unique asset and stock-type product Maxim
Slide 10: Measures to Link Services with LINE Official Accounts
Measures to Link Services with LINE Official Accounts Media Business • Cross-selling to Yahoo! JAPAN Shopping and PayPay Mall merchants progressing steadily. • Aim to maximize payment GMV/no. of reservations by deploying measures to other services (e.g., PayPay, restaurant reservation, etc.) in the
Slide 11: Business Overview (LINE – Total Advertising Revenue)
｜ Business Overview (LINE – Total Advertising Revenue) Media Business • Account ads: grew over 20% due to acquisition of new customers of LINE Official Account and increase in ad distributions by major clients. • Display ads: JPY27.3 B (YoY +9.2%) although some industries were affected by economic c
Slide 12: Business Overview (Yahoo Japan – Total Advertising Revenue)
｜ Business Overview (Yahoo Japan – Total Advertising Revenue) Media Business • Search advertising grew steadily due to capturing of demand recovery, especially in the travel industry. • Display advertising reached the same level as last year due to weak demand in reservation advertising caused by un
Slide 13: Commerce Business
Commerce Business
Slide 14: Integrate Sales Platforms to a Renewed Yahoo! JAPAN Shopping
Integrate Sales Platforms to a Renewed Yahoo! JAPAN Shopping (Scheduled in October 2022) Commerce Business • To provide a simple, easy-to-search, safe/secure, and convenient shopping experience. • Further expand transaction value through straightforward user experience, promotion of blue-ribbon stor
Slide 15: Business Model of New Yahoo! JAPAN Shopping
Business Model of New Yahoo! JAPAN Shopping Commerce Business • Commissions from additional options and ad placements. 3% revenue from Promotion Package Plan. Designed to hike the ratio of blue-ribbon delivery by providing additional benefits exclusive to blue-ribbon stores. • Through additional ben
Slide 16: Business Overview (EC Transaction Value)
Business Overview (EC Transaction Value) Commerce Business • From FY2022 Q1, included transaction value of overseas e-commerce (Figures for FY2021 are retroactively revised). • Resulted at JPY989.5 B (YoY+15.1%) due to recovery in travel from economic reopening, high growth in overseas e-commerce, e
Slide 17: Business Overview (Domestic Merchandise Transaction Value)
Business Overview (Domestic Merchandise Transaction Value) Commerce Business • Domestic merchandise transaction value: JPY731.6 B (YoY +5.9%) due to steady growth in shopping & reuse businesses. Domestic Merchandise Transaction Value1 Domestic Merchandise Transaction Value1 – YoY Growth Rate (JPY B)
Slide 18: Strategic Business
Strategic Business
Slide 19: Major KPIs of Payment & Financial Businesses
｜ Major KPIs of Payment & Financial Businesses Strategic Business • PayPay GMV maintains high growth due to PayPay Atobarai (deferred payment). • Various KPIs performed steadily due to strengthened collaborations with PayPay, which led to acquisition of PayPay users. PayPay – GMV1,2 PayPay Card – Tr
Slide 20: Major KPIs of Financial Businesses
｜ Major KPIs of Financial Businesses Strategic Business • Tapping into potential financial needs through LINE, both domestic & international financial businesses grew significantly. LINE Securities LINE Pocket Money LINE BK (Thailand) LINE Bank (Taiwan) – No. of Accounts – Loan Balance – Loan Balanc
Slide 21: Table of Contents
Table of Contents 1 Consolidated Business Results – Whole Group 2 Topics/Business Results – By Segment 3 FY2022 Business Results Forecast 4 Consolidation of PayPay Corporation
Slide 22: FY2022 Full-Year Guidance
FY2022 Full-Year Guidance Whole Group • Consolidation of PayPay is an income decrease factor that was not factored in at the beginning of the fiscal year, but will aim to achieve adjusted EBITDA of JPY331.5 B – 340.0 B. • Impact of the consolidation on financial results other than adjusted EBITDA is
Slide 23: Table of Contents
Table of Contents 1 Consolidated Business Results – Whole Group 2 Topics/Business Results – By Segment 3 FY2022 Business Results Forecast 4 Consolidation of PayPay Corporation
Slide 24: Overview
Overview 23
Slide 25: PayPay will be consolidated from October 2022
PayPay will be consolidated from October 2022 Capital Structure After Consolidation (Planned)1 ZHD and SoftBank Corp. establish SoftBank an intermediate holding company to ZHD SBKK Vision Fund 2 1 consolidate PayPay 50％ (Consolidation) 50％ Corporation Jointly managed intermediate holding company 5.9
Slide 26: Maximize growth of payment & financial businesses together with SoftBank Corp.
Maximize growth of payment & financial businesses together with SoftBank Corp. <Before> Investment by each party bringing in individual strengths Payment & Finance Service linkage Strong sales force <Future> ＜今後＞ Build a structure Media Commerce Finance Tele- communication Enterprise Distribution シナ
Slide 27: PayPay's Growth Trajectory and Acceleration of Monetization
PayPay’s Growth Trajectory and Acceleration of Monetization 26
Slide 28: PayPay GMV/No. of payments: approx. 2/3 of market
In approx. 3 yrs. & 9 mos. since service launch, achieved explosive growth through investments PayPay GMV/No. of payments: approx. 2/3 of market Cumulative No. of Registered Users PayPay GMV1,2 No. of PayPay Payments1 48.65 mil JPY 4.9 T 3.24 B (JPY T) (Billion) 4.9 3.24 (67%) (66%) 2.8 1.79 Market
Slide 29: PayPay – moving on to monetization phase
PayPay – moving on to monetization phase Through consolidation, further accelerate monetization in 2nd and 3rd tiers 3rd Tier Cumulative registered users No. of point Cumulative subscribers Financial of Atobarai (BNPL) No. of accounts management users of mini app service 1.73 mil1 6.22 mil1 6.00 mil
Slide 30: Synergies from Consolidation of PayPay
Synergies from Consolidation of PayPay 29
Slide 31: Overall strategy of the ZHD Group
Overall strategy of the ZHD Group Leveraging an unparalleled user base, expand “To C” & “To B” ecosystems To C To B Commerce Ad clients Service users Data Data solution Merchants ZHD Group ecosystem Ad/sales Service Media Strategic promotion expenditure Group ID linkage/Integration of point rewards/
Slide 32: Nurturing PayPay to a service used by everyone in Japan
Nurturing PayPay to a service used by everyone in Japan Maximize user base through Non- PayPay linkage with LINE users Linkage with LINE Pay 1 (Linkage in QR code payment) 92 million 1 2 Integration of point rewards 48.65 million1 Linked with 3 ID linkage Yahoo! JAPAN ID 37 million 1. As of June 30,
Slide 33: ID linkage of LINE, Yahoo! JAPAN, PayPay
ID linkage of LINE, Yahoo! JAPAN, PayPay1 will enable PayPay ecosystem to cover almost all Internet users in Japan <Now> <Future target> Y-P IDs 77％2 linked L-Y-P IDs 80％2 linked 55 million3 48.65 million3 55 million3 48.65 million3 92 million3 1. ID linkage scheduled to begin from 2023 onwards 2. O
Slide 34: Introduce Group services to PayPay user/merchant bases
Introduce Group services to PayPay user/merchant bases to develop new markets & maximize revenue opportunities Approaches “To C” Approaches “To B” 4 Sales promotion 1 Commerce 5 E-commerce (Bank/credit card/ Merchant 2 Finance securities/insurance） User base base 48.65 mil1 3.74 mil1,2 6 Finance (Fa
Slide 35: To C: Commerce
1 To C: Commerce Aim to have users in PayPay ecosystem choose Yahoo! JAPAN Shopping as first choice online shopping platform Enhance awareness as EC platform that earns the most points Shopping Shopping Aim to double PayPay Points annual buyers Reinforce PayPay ecosystem by increasing amount of poin
Slide 36: To C: Finance
2 To C: Finance PayPay/LINE financial ecosystem around PayPay Expand PayPay’s base Securities User Unparalleled Card engagement user referrals Card Securities Use/save points No. of cumulative Financial mini app Medium term target: Triple card holders registered users Bank Insurance 48.65 mil1 Enhan
Slide 37: To C: Crypto assets
3 To C: Crypto assets Develop new market by linking crypto assets/NFT with payment Purchase crypto assets at PayPay Pay with crypto assets at PayPay merchants Crypto assets Consider adding crypto assets course to PayPay’s “Earn Points” NFT Launch NFT Market mini app in PayPay *Considered subject to
Slide 38: To B: Sales promotion
4 To B: Sales promotion Aim to have a revenue size of JPY100 B by digitalizing sales promotion For Manufacturers For PayPay Merchants Promote reach outside/within stores, purchase, Maximize no. of users/transaction value through and repurchase referrals from LINE Official Account Recognition Recogni
Slide 39: To B: Introducing e-commerce
5 To B: Introducing e-commerce Introduce e-commerce to PayPay merchants in conjunction with MySmartStore Further Further promotion expansion of Promote e-commerce of PayPay My Store PayPay in merchants merchants Stores with “PayPay My Store” PayPay merchants 3.74 million1,2 Stores throughout Japan 1
Slide 40: To B: Finance
6 To B: Finance Provide comprehensive financial services to PayPay merchants Issue credit cards Provide credit based Assess sales data for merchants on sales/expense data 1 2 3 4 Bank Bank Card Card Consolidate Receive Reimburse Factoring, sales sales expense loan, etc. proceeds proceeds Increase me
Slide 41: Maximize Group synergies/expand revenue
Maximize Group synergies/expand revenue through collaborations among ZHD’s business domains that have one of Japan’s largest user base Media Commerce Strategic • In medium term, bring ID linkage rate to 80%, and increase ad unit • Promote cross use with PayPay • Build PayPay & LINE’s financial ecosy
Slide 42: 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 43: 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