Ly Corporation · TSE:4689
Ly — Yahoo Japan — Q2 FY2018 Earnings Presentation
45 slides from Ly's earnings presentation, Oct 31, 2018
Slide 1: Yahoo Japan Corporation FY2018-2Q Business Results
Yahoo Japan Corporation FY2018-2Q Business Results October 31, 2018
Slide 2: Table of Contents
Table of Contents P. 4 FY2018-2Q Financial Results P. 10 Results by Segments P. 12 Media Business P. 19 Commerce Business P. 32 Creating New Businesses P. 40 Supplemental Information Unless otherwise specified, English-language documents are prepared solely for the convenience of non-Japanese speake
Slide 3: Forward-looking statements notice
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 of importa
Slide 4: FY2018-2Q Financial Results
FY2018-2Q Financial Results 4
Slide 5: FY2018-2Q Investor Meeting - Topics
FY2018-2Q Investor Meeting - Topics Two consecutive quarters of double-digit 1 YoY growth in paid search advertising revenue Released PayPay, a smartphone payment 2 service (October 5) 5
Slide 6: Executive Summary for FY2018-2Q
Executive Summary for FY2018-2Q FY2017 FY2018 YoY 2Q 2Q Revenue 215.2 (¥B) 233.1 (¥B) +8.3% Operating income 42.7 (¥B) 35.5 (¥B) -16.9% EBITDA 53.2 (¥B) 48.2 (¥B) -9.5% Net income attributable to owners of the parent 31.7 (¥B) 22.4 (¥B) -29.2% Diluted EPS ¥5.5 ¥4.0 -26.5% 6
Slide 7: Revenue Excluding Impact from Change in Accounting Policy
Revenue Excluding Impact from Change in Accounting Policy (¥ Billion) 237.3 215.2 205.3 Adjustment YoY 138.2 103.3 +10% FY2014 FY2015 FY2016 FY2017 FY2018 2Q 2Q 2Q 2Q 2Q 7
Slide 8: Factors of YoY Change in Operating Income
Factors of YoY Change in Operating Income (¥ Billion) Increase in advertising revenue etc. 42.7 + 42.7 Increase in SG&A Investment for 35.5 associated Media- Commerce human resource with related -related development business and service growth platform Business growth and Expenses for improved effic
Slide 9: Changes in Shareholder Composition
Changes in Shareholder Composition Treasury stock Others (floating stock) Altaba, Inc. SoftBank Group 22% 11% 11% 1% Cancelled 9% of 22% 51% 35% 24% 46% treasury stock 48% Ratio of floating 43% 43% 43% stock increased Before TOB After TOB Altaba completed After cancellation (August 31) the sales of
Slide 10: Results by Segments
Results by Segments 10
Slide 11: Results by Segments
Results by Segments FY2017 FY2018 YoY (￥Billion) 2Q 2Q Actual result Main factors of change Revenue 71.6 75.1 +4.8% Increase in paid search advertising revenue Media business Operating Income 37.2 35.3 -5.2% Increase in sales promotion costs • Increase in ASKUL Group’s revenue Revenue 139.9 157.8 +1
Slide 12: Media Business
Media Business 12
Slide 13: Number of Monthly Logged-In User IDs
Number of Monthly Logged-In User IDs (Million IDs) 45.87 YoY 28.56 31.45 36.14 41.58 +10% Sep. Sep. Sep. Sep. Sep. 2014 2015 2016 2017 2018 13
Slide 14: Time Spent by Logged-In Users
Time Spent by Logged-In Users (Billion hours) PC+Others *1 Smartphones *2 2.5 2.2 2.1 1.7 YoY 1.5 1.8 1.5 +12% 1.2 0.8 0.5 0.9 0.9 0.8 0.7 0.7 FY2014 FY2015 FY2016 FY2017 FY2018 2Q 2Q 2Q 2Q 2Q Note: Time spent by users logged-in with Yahoo! JAPAN IDs for each quarter 14 *1 Time spent including acces
Slide 15: Advertising-Related Revenue
Advertising-Related Revenue (¥ Billion) Display 79.3 Paid search 74.3 69.4 65.7 60.5 38.0 37.8 22.3 29.6 34.5 YoY 38.2 36.1 34.8 36.5 41.3 +7% FY2014 FY2015 FY2016 FY2017 FY2018 2Q 2Q 2Q 2Q 2Q 15 Note: Includes advertising revenue recorded in Commerce Business
Slide 16: Paid Search Advertising Revenue - YoY Growth Rate
Paid Search Advertising Revenue -YoY Growth Rate +13.2% YoY 0 +13% FY2014 FY2015 FY2016 FY2017 FY2018 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 16
Slide 17: Began Ad Fraud Countermeasures
Began Ad Fraud Countermeasures Purposes Measures conducted Construct a sound media 1 platform to eradicate ad frauds September 21 Temporarily terminated ad distributions to some websites* Improve credibility of Internet 2 ads and transparency of ad effects October 25 Increase advertisers who place R
Slide 18: Media Video Strategy - Measures
Media Video Strategy - Measures Video viewing time in Top Page* Major video contents YoY C CHANNEL Japan’s largest video media for women Approx. 3x Externally procured contents MAMADAYS Video media for families to solve mom’s problems WaiQ Live program in which viewers participate in games (From Sep
Slide 19: Commerce Business
Commerce Business 19
Slide 20: EC Transaction Value (Sale of Goods)
EC Transaction Value (Sale of Goods) (¥ Billion) ASKUL BtoB Others 461.8 Shopping business YAHUOKU! 415.5 58.7 364.1 54.3 17.1 298.8 50.8 11.5 11.7 YoY 16.3 173.5 252.8 5.5 140.7 101.1 +11% 6.3 79.1 60.8 185.7 197.6 200.5 208.6 212.4 FY2014 FY2015 FY2016 FY2017 FY2018 2Q 2Q 2Q 2Q 2Q 20 Note: Include
Slide 21: Shopping-Related Advertising Revenue
Shopping-Related Advertising Revenue (¥ Billion) 7.1 YoY 3.1 5.5 +28% 1.4 0.8 FY2014 FY2015 FY2016 FY2017 FY2018 2Q 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
Slide 22: Advertising take rate steadily increasing
Percentages of Shopping-Related Advertising Revenue*1 and Point-Reward Expenses*2 to Yahoo! Shopping Transaction Value % of Shopping-related advertising revenue % of point-reward expenses Advertising “take rate” steadily increasing 0 FY2015 FY2016 FY2017 FY2018 2Q 4Q 2Q 4Q 2Q 4Q 2Q *1 Shopping-Relat
Slide 23: Earning Trend of Commerce Business (excl. ASKUL G)
Earning Trend of Commerce Business (excl. ASKUL G) YAHUOKU!, Membership, O2O, Financial & Payment, etc. Yahoo! Shopping (Includes shopping ad and shopping-related payments) YJ Card Corporation (¥ Billion) +2.8% YJ Card 32.9 33.8 Corporation YAHUOKU!, Profitability improved. Membership, YJ Card Corpo
Slide 24: Auction Listing Now Available for Non-Yahoo! Premium Members
Auction Listing Now Available for Non-Yahoo! Premium Members Improved YAHUOKU! to be used by more users Non-Yahoo! Premium Yahoo! Premium member member Product listing in auction service ※To be provided also on web browsers from November 12 * Product listing in flea market service Monthly fe
Slide 25: Measures to Revamp YAHUOKU!
Measures to Revamp YAHUOKU! Provide anonymous delivery in cooperation with 1 Yamato Transport Co., Ltd. (From August 27) Revised shipping fee paid by sellers to 2 a standardized fee for shipping throughout Japan (From October 16) 25
Slide 26: Mobile Payment
Mobile Payment 26
Slide 27: Launched PayPay on October 5
Launched PayPay on October 5 October 25 * Plan to start within 2019 Began service coordination with Alipay 27 Note: Includes merchants with whom introduction of PayPay is planned. The service may not be available in some stores/restaurants.
Slide 28: Comparison with Competitors
Comparison with Competitors PayPay LINE Pay Rakuten Pay End of following Payment to merchants Following day (min.) Following day (min.) month Merchants Free for 3 years (max.) Payment fee Free for 3 years (max.) 3.24% （User scan only) Linked with No Yes Yes credit cards (Only LINE-related services)
Slide 29: PayPay – Business Structure
PayPay – Business Structure Operator of mobile payment business will be transferred to PayPay Corporation PayPay’s expenses will be funded by investments from the two companies and recorded in PayPay Corporation Invest Invest Revenue and expenses for mobile payment business will be recorded in PayPa
Slide 30: Commerce-Related Expense for New Challenges - Outlook
Commerce-Related Expense for New Challenges - Outlook Considering how to use expense for new challenges due to change in PayPay’s business structure 上期 (JPY B) 0 下期 8.2 1H 2H Total expense (Guidance at beginning of term: ¥20B) 2.8 5.4 TBD • Expense for launch of mobile • Promotion of PayPay function
Slide 31: Guidance for Full Year Operating Income
Guidance for Full Year Operating Income Previous announcement ¥130 – 140 billion Current guidance ¥133 – 143 billion Upside factor • Steady growth in existing businesses in 1H Reason for the • Commerce-related: amount of expense for new range in guidance challenges • Decrease in ad revenue due to me
Slide 32: Creating New Businesses
Creating New Businesses 32
Slide 33: Accelerating Entry into the Offline World
Accelerating Entry into the Offline World Consuming Making offline world Integration of information online more convenient with the Internet online and offline worlds Mobile payment, user scores, accommodation business, sharing service, etc.・・・ 33
Slide 34: Started Experimenting with Scoring Users Leveraging Big Data
Started Experimenting with Scoring Users Leveraging Big Data Aim to provide services using Yahoo! JAPAN’s original scores based on our ID base Conceptual diagram of this measure Expected usage examples Business Scores Examples Score Provide fields Big users scores data • Simplification of Yahoo Japa
Slide 35: Planning to Provide Offline Sales Promotional Solutions
Planning to Provide Offline Sales Promotional Solutions 「オフライン販促ソリューション」のご提供 Sales promotional solutions using PayPay Use of purchase history & activity log Integrated management of online and offline purchases Details will be announced as soon as they are finalized 35 Photo by Yahoo! JAPAN Scre
Slide 36: Offline Purchase Through Ads & PayPay
Offline Purchase Through Ads & PayPay Become aware of Participate in the Purchase product Receive e-money sales drive in drive via PayPay ※3 Yahoo! JAPAN with identifier ※1 ※2 Image: Aflo ※1 Details of sales drive to be announced at a later date. 36 ※2 Screen image is for illustrative purpose only.
Slide 37: Collaboration with SoftBank Vision Fund
Collaboration with SoftBank Vision Fund Encounter Media Ad Enjoy Explore Search Service "Conversion media" Contents Commerce Data Pay Purchase Certain "SoftBank Vision Fund" investments described herein are subject to pending regulatory approvals. The investments described herein represent a subset
Slide 38: Yahoo! JAPAN will create a future that can only be shaped by us
Yahoo! JAPAN will create a future that can only be shaped by us 38
Slide 39: Supplemental Information
Supplemental Information 39
Slide 40: Business Segment Breakdown
Business Segment Breakdown Media Business ・Advertising: Paid search advertising “Sponsored Search”, Display advertising (“Yahoo! Display Ad Network (YDN)”, “Premium Advertising”) ・Business Services: CRM-related services, Media-related services and others ・Personal Services: Video-related services an
Slide 41: Advertising Products
Advertising Products Main Main Fee Placement Advertising Products Advertiser Format Calculation Pages Base Paid search Search results Sponsored Search® Text Major advertising pages Per-click rate corporations (Performance-based) *2 Text Yahoo! Display Small and Banner medium-sized Ad Network YDN and
Slide 42: Definition of EC Transaction Value from FY 2018
Definition of EC Transaction Value from FY 2018 YAHUOKU! EC transaction value (sale of goods) Shopping Yahoo! Shopping, LOHACO, Charm Business EC transaction value ASKUL BtoB Yahoo! Tickets, Ouchi-Direct* , Others tradecarview, BOOKOFF Online EC transaction Ikyu, Yahoo! Travel, value (others) Yahoo!
Slide 43: Organization Chart of Yahoo Japan Corporation
Organization Chart of Yahoo Japan Corporation Chairman of the As of the end of Sept. 2018 Board of Directors President & Representative Director / CEO Board of Directors Media Services Group Business Promotion ID Services Management Audit and (618) Group (183) Supervisory Group (268) Search Services
Slide 44: Consolidated Subsidiaries and Affiliates
Consolidated Subsidiaries and Affiliates As of the end of Sept. 2018 Major consolidated subsidiaries ASKUL Corporation Carview Corporation CLASSIFIED Corporation Dynatech inc. eBOOK Initiative Japan Co., Ltd. ecohai Co., Ltd. GYAO Corporation Ikyu Corporation Netrust, Ltd Passrevo Corporation Syne
Slide 45: 主な連結子会社および持分法適用会社
主な連結子会社および持分法適用会社 45