Ly Corporation · TSE:4689
Ly — Yahoo Japan — Q2 FY2012 Earnings Presentation
72 slides from Ly's earnings presentation, Oct 24, 2012
Slide 1: Yahoo Japan Corporation FY2012 2Q Business Results
Yahoo Japan Corporation FY2012 2Q B Business i R Results lt (July 2012-September 2012) October 24, 2012
Slide 2: Table of Contents
Table ab e o of Contents Co te ts P 3 P. Financial Highlights P 19 Growth Strategies and Progress P. P 55 Appendix P. 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
Slide 3: FY2012-2Q Financial Highlights
FY2012-2Q Q Financial Highlights g g (¥100M) YoY Change 2011-2Q Q 2012-2Q Q Ch Change C Contributors ib Revenue 737 787 6.8% ・Listing advertising revenue grew Operating Income 405 432 6.7% - Ordinary Income 410 439 7.2% - Quarterly Net Income 242 271 11.8% ・Income tax rate lowered 3
Slide 4: Quarterly Revenue
Quarterly Revenue (¥ 100M) 800 787 600 400 Gross Net 200 0 ‘02/ ‘03/ ‘04/ ‘05/ ‘06/ ‘07/ ‘08/ ‘09/ ‘10/ ‘11/ ‘12/ 7-9 7-9 7-9 7-9 7-9 7-9 7-9 7-9 7-9 7-9 7-9 *Commencing with FY2008, we started indicating revenue on a net rather than gross basis, by eliminating certain items in cost of sales and SG&
Slide 5: Quarterly Revenue YoY Growth Trend
Quarterly y Revenue YoY Growth Trend 10% 8% 6.8% 6% 4% 2% 0% ‘09/ ‘10/ ‘11/ ‘12/ 7-9 7-9 7-9 7-9 5
Slide 6: Quarterly Revenue Breakdown
Quarterly y Revenue Breakdown (¥ 100M) 800 737 787 Total +50 (¥100M) +6.8% 600 Marketing Solutions Business 533 +10 4% +10.4% 483 Listing advertising revenue was strong 400 Consumer Business +2 +2.8% 8% Pay digital content revenue grew 200 245 252 Other Business O +6.9% % Settlement and finance busi
Slide 7: Quarterly Advertising-related Revenue
Quarterly y Advertising-related g Revenue Total +43 (¥100M) (¥ 100M) 448 404 400 +10.7% 300 Listing advertising revenue +14.8% 329 -Smartphone S h advertising d i i revenue rose substantially 286 -Strong growth in revenue through advertising 200 agencies Display advertising revenue +0.9% 100 -Revenu
Slide 8: Quarterly Advertising-related Revenue via Mobile Phones
Quarterly Advertising-related Revenue via Mobile Phones (¥ 100M) 50 Smartphone advertising revenue * 40 +42 (¥100M) S Smartphone t h advertising d ti i revenue ratio ti 30 55 3.4% 12.5% *Including Including revenues from some part of tablet devices 20 Feature phone advertising revenue 10 18 -11 11
Slide 9: Quarterly Advertising-related Revenue YoY Growth Trend
Quarterly Advertising-related Revenue YoY Growth Trend 20% 15% 14.8% 10% 5% 0.9% 0% ‘09/ ‘10/ ‘11/ ‘12/ Listing Advertising 5% 7-9 -5% 7-9 7-9 7-9 Display Advertising -10% -15% 9
Slide 10: YoY Change Contributors by Industry - Listing Advertising Revenue
YoY Change Contributors by Industry - Listing Advertising Revenue (¥ 100M) +42.4 Total +42.4 42.4 (¥100M) +14.8% +14.9 +7.8 +6.0 +4.9 +4.1 +3.3 +2.2 0 YoY Change Others, net 10 *The sum of changes by industry doesn’t match the total YOY change because a portion of revenues is not categorized by indu
Slide 11: YoY Change Contributors by Industry - Display Advertising Revenue
YoY Change Contributors by Industry - Display Advertising Revenue (¥ 100M) Total +1.0 (¥100M) +0 9% +0.9% +3.7 +3.0 +2.5 +2.5 Finance/Insurance/Securities +1.0 -1.6 Others, net 0 YoY Change -4.3 -4.9 11
Slide 12: Quarterly e-commerce Transaction Value
Quarterly y e-commerce Transaction Value (¥ 100M) Total -26 26 (¥100M) 4,000 3,778 3,751 -0.7% 737 745 Shopping +1.1% 3,000 Increase in transaction value of shopping and travel 1,611 1,569 Auctions -2.6% 2,000 Transaction value decreased Others +0.5% (Settlement/Financial services, pay digital conte
Slide 13: Quarterly Profits
Quarterly Profits (¥ 100M) 500 60% 50% 400 40% Operating Income 営業利益 300 Ordinary Income 経常利益 30% 四半期純利益 半期純利益 Quarterly Net Income Operating Margin 売上高営業利益率 200 Ordinary Margin 売上高経常利益率 20% 100 10% 0 0% ‘02/ ‘04/ ‘06/ ‘08/ ‘10/ ‘12/ 7-9 7-9 7-9 7-9 7-9 7-9 *Margins for ’08/7-9 onward are affected b
Slide 14: Quarterly Operating Income YoY Growth Trend
Quarterly Operating Income YoY Growth Trend 14% 12% 10% 8% 6% 6.7% 4% 2% 0% ‘09/ ‘10/ ‘11/ ‘12/ 7-9 7-9 7-9 7-9 14
Slide 15: Review of FY2012-2Q Business Outlook
Review of FY2012-2Q Business Outlook (¥100M) Actual Forecast Reasons for Gap （ As of July 25, 2012) ・Sluggishness of display Revenue 787 778 - 820 advertising revenue was beyond th scope off assumption. the ti Operating Income 432 428 - 452 - Ordinary Income 439 433 - 456 - Quarterly Net Income 271
Slide 16: FY2012 2nd Half Business Outlook
FY2012-2 0 nd Half a Business Outlook (¥100M) 2011-2nd 2012-1st 2012-2nd Half Change Half Half (Actual) (Actual) (Forecast) Contributors ・ Listing advertising revenue 1 564 1,563 1,564 1 563 1,626 1 626 - 1,689 1 689 expected to grow Revenue ・ Revenue from membership services expected to increase Op
Slide 17: FY2012 Full Year Business Outlook
FY2012 Full Year Business Outlook (¥100M) FY2011 FY2012 Change (A t l) (Actual) (F (Forecast) t) C Contributors ib ・ Listing advertising revenue 3,020 3,190 - 3,253 expected to grow Revenue ・ Revenue from membership services expected to increase Operating Income 1,650 1,733 - 1,770 - Ordinary Income
Slide 18: Forecast of Cash Dividend for FY2012
Forecast of Cash Dividend for FY2012 Cash dividends per share ¥370- ¥370 (¥) 400 ¥378 Cash dividend per share is expected ¥347 to grow 6.6-8.9% YOY 350 ¥318 The Company’s target continues to be approximately 20% of consolidated 300 net income as its forecast for dividends for the FY2012. FY2012 250
Slide 19: FY2012 2nd Half
FY2012 2 Half nd H lf Th torch The t h was passed d successfully f ll ・ Re-organization to proceed with growth strategies - Set up Central Services Company - Introduced I t d d a new personnell system t ・ Maintained consecutive growth in revenue and profit 19
Slide 20: Re-organization to Proceed with Growth Strategies
Re-organization to Proceed with Growth Strategies President and CEO Executive Vice President / COO CMO CFO Media Services Company Marketing g Solutions Company p y Consumer Business Company Central Services Company Business Strategy gy Group p *CEO = Chief Executive Officer *COO = Chief Operating Of
Slide 21: Set up Central Services Company
Set up Central Services Company f Strengthening for St th i Settlement S ttl t and d Finance Businesses Transaction Value within Yahoo! JAPAN services: ¥1 trillion e commerce digital content etc e-commerce, etc. Settlement/Finance- W ll t Wallet related products ezPay P Central Services Company Sett
Slide 22: New Personnel System
New Personnel System ・ Introduced a comprehensive p personnel p evaluation system y based on contribution to profit multiplied by display of “Yahoo! Value”, aiming to unleash employees’ talent and passion Profit 22 Yahoo! Value
Slide 23: Aim to Achieve 2-Digit YoY Growth in OP
Aim to Achieve 2-Digit YoY Growth in OP -->Double OP by FY 201X X2 ¥165 bn 2012.3 201X.3 23
Slide 24: Measures to Re-accelerate Profit Growth
Measures to Re-accelerate Re accelerate Profit Growth Only y 1 Strategy gy Aiming to become a portal site for “Only 1” services by brushing-up/ restructuring of own services and alliances with external partners The Most Powerful Tag Teams IIntending t di to t strengthen t th services i provision
Slide 25: Only 1 Strategy
Only 1 Strategy 1 ‘YAHOO!
Slide 26: Reallocation of Internal Resources
Reallocation of Internal Resources ・ Restructuring g of services Ｙ!１ TOP 5 Most important sing Ｙ!２ TOP 20 Important Keep assess Continue services with Ｙ!３ Not in TOP 21 high user retention only Ｙ!４ Low market share Close or restructure Develop utilizing Ｙ!Ｃ New services internal resources 26
Slide 27: Top 20 Services DUB Trend
Top 20 Services DUB Trend * 2010.2Q 2011.2Q 2012.2Q Source：Yahoo Japan Corporation *DUB=Daily Unique Browsers 27
Slide 28: Measures Taken for Top Services
Measures T M Taken k ffor Top p 20 Services 28
Slide 29: Yahoo! JAPAN start page
Yahoo! JAPAN start page ・ “Rich Rich Ad Ad” products Plan to start marketing based on performances of trial distributions done in the latter half of September Advertiser’s banners Expands by hovering shown simultaneously mouse over the banner In 3 spots ・ Display advertising for smartphones 29 selli
Slide 30: Yahoo! Auctions
Yahoo! Auctions ・ Simplified Si lifi d id identification tifi ti process th throughh mobile devices enables registration in as quick as 30 seconds. Number of new sellers increased 40% YOY accordingly. Buy it now ・ Yahoo! Bazar B Bazar Sh Shopping i Allows individual sellers Individual Stores to list
Slide 31: Yahoo! Premium
Yahoo! Premium ・ Enhanced membership benefits applicable for smartphones -Provision of more than 1,000 contents/services (worth as much as ¥200 thousand per year) free of charge -Raised Raised the monthly membership fee from ¥330 to ¥380 (as of Oct.1, tax excluded) ・ Membership acquisition activitie
Slide 32: Facility investment: Shirakawa Data Center
Facility investment to support Top 20 services operations Start of operations of Shirakawa Data Center in October 2012 ・ The mega data center triangle concept World class energy-saving and Capital region environmental design g Great scalability Shirakawa DC Japan s largest Japan’s Low delay ne
Slide 33: Alliances at Ultimate Speed
Alliances at Ultimate Speed 33
Slide 34: Listing tabelog.com on Yahoo! JAPAN start page
(tabelog.com) × ・ Started listing tabelog.com tabelog com on Yahoo! JAPAN start page, instead of Yahoo! Gourmet in September ・ Growth in numbers of access after the replacement l iindicates di enhanced h d user convenience ・ Expecting advertising revenues to grow along with increased traffic 34
Slide 35: Listing COOKPAD on start page for smartphones
× ・ Started listing COOKPAD on Yahoo! JAPAN start page for smartphones, replacing Yahoo! Recipe in July ・ Growth in numbers of access after the replacement i di t iincreased indicates d user convenience i ・ Started p planning g and selling g collaborative display p y advertising products 35
Slide 36: Re-targeting advertising
Offers the worlds’ top-level re-targeting advertising technology (from France) × ・ Re-targeting g g advertising g (click-based banners) -Accepted distributions to Yahoo! JAPAN pages at the end of August -Yahoo Japan Corporation will start marketing services as an agency by the year end 36
Slide 37: Invested in Crocos, Inc.
One of the first companies in Japan certified as a Preferred Marketing Developer by Facebook × ・ Invested in Crocos, Inc. Prize promotions to achieve more followers User traffic on FB by Crocos Yahoo! 店 Yahoo! 店 Selling S lli products d t on retailers’ FB pages Crocos provides e-commerce assistant s
Slide 38: Facebook integration on start page
× ・ Enabled Yahoo! JAPAN users to read new posts by FB friends and FB pages on Yahoo! JAPAN start page ・ Publicly-open P bli l d t on FB is data i ＊＊＊＊ now included in the coverage of Yahoo! Realtime Search Only Yahoo! JAPAN provides real-time search service covering data from A sample image from Ya
Slide 39: The Most Powerful Tag Teams
The Most Powerful Tag g Teams 39
Slide 40: With SOFTBANK Group
With SOFTBANK Group No.1 Smartphone × No.1 Internet Distributor Services Company p y 40
Slide 41: Yahoo! Premium Membership Acquisition at SoftBank Stores
Yahoo! Premium Membership Acquisition at SoftBank Cell-phone Stores ・ Promote membership subscriptions in stores Subscribers can pay membership fees through mobile phone monthly payment New subscribers New subscribers expected to more than double Monthly average Oct. 2012 in the FY2012-1st Half (Est
Slide 42: With ASKUL
With ASKUL × No.1 Office Supply * No.1 Internet Delivery y Service Services Company p y *Transaction value of Office Supply by Mail Order, July 2011, Yano Research Institute Ltd. 42
Slide 43: LOHACO, a new BtoC shopping site
LOHACO, a new BtoC shopping pp g site Launched on Oct. 15 Smartphones/Tablet devices-optimized devices optimized pages launched prior to the PC site 43
Slide 44: With Culture Convenience Club
With C lt re Con Culture Convenience enience Cl Club b × No.1 Off-line Point Platform No.1 Internet Services Company Point business segment split off from CCC into a separate company as of Oct. 1. (Yahoo Japan Corporation will acquire 15% of shares of the newly established company.) 44
Slide 45: Unexplored Frontier
Unexplored Frontier 1 ‘YAHOO!
Slide 46: Established YJ Capital Inc., a Domestic Investment Fund
Established YJ Capital Inc. Inc a Domestic Investment Fund -Yahoo Japan p Corporation’s p ownership: p 100% -A venture capital business that mainly targets d domestic ti venture t companies i Aiming to: -discover promising ventures -earn capital it l gains i 46
Slide 47: Progress with Smartphone Growth Initiatives
Progress with Smartphone Growth Initiatives 47
Slide 48: Smartphones DUB Trend
Smartphones DUB Trend （Million UBs） 20 15 10 5 0 2011 4 2011.4 2012 9 2012.9 Source: Yahoo Japan Corporation *DUB=Daily Unique Browsers 48
Slide 49: Cumulative Number of Yahoo! JAPAN Applications Downloaded
Cumulative Number of Yahoo! JAPAN Applications Downloaded ・ iOS+Android Approx. pp Cumulative downloads: 40 million Approx. 40 million Approx Approx. 30 million and up Applications for iOS・Android 2012.1Q 2012.2Q 49
Slide 50: Alliances at Ultimate Speed in Smartphone Areas
Alliances at Ultimate Speed in Smartphone Areas -Community Factory Inc. DECOPIC -KAKAO JAPAN Corporation KAKAO TALK × -ACCESSPORT, INC. 50
Slide 51: Investment in Community Factory Inc.
Investment in Community Factory Inc. Offers DECOPIC, a camera application for smartphones -Cumulative number of downloads worldwide: 8 million -Weekly active user numbers: 1 million A camera application with photo decorating function We intend W i t d tot learn l from f their th i knowledge k l d an
Slide 52: Investment in KAKAO JAPAN Corporation
Investment in KAKAO JAPAN Corporation -Made an alliance aimed at penetrating the fast-growing ast g o gssmartphone a tp o e co communication u cat o services market in Japan -KAKAO KAKAO TALK has a 65 million global user base in 216 countries (at the end of September 2012) 52
Slide 53: Alliance with ACCESSPORT, INC.
Alliance with ACCESSPORT, INC. Plan to offer Yahoo! Market plus, p enabling data management of Android based devices on PCs Android-based in early November 53
Slide 54: Growth Strategies and Progress - Summary
Growth Strategies g and Progress g - Summary The Most Th M t Smartphone S t h Unexplored Only 1 Strategy Powerful Tag Growth Teams Frontier Initiatives Advertising ( (O2O promotion p (tabelog.com) services) Rich ads on Brand Panel test YJ Capital e-commerce/ e commerce/ Auctions Project DEJIMA Membe
Slide 55: Supplemental Information
Supplemental Information 55
Slide 56: Table of Contents
Table of Contents P. 57 Quarterly Business Results P. 68 Quarterly Business Data P. 70 Organization, Personnel and Affiliated Companies 56
Slide 57: FY2012-2Q Statements of Income
FY2012-2Q Statements of Income 2011-2Q 2012-2Q Change Revenue (¥100M) 737 787 6.8 % Cost of Sales (¥100M) 69 79 14.4 % Gross Profit (¥100M) 668 708 6.0 % SG&A (¥100M) 262 275 4.9 % Operating Income (¥100M) 405 432 6.7 % Ordinary Income (¥100M) 410 439 7.2 % Quarterly Net Income (¥100M) 242 271 11.8
Slide 58: FY2012-2Q Performance Breakdown by Business Segment
FY2012-2Q Performance Breakdown by Business Segment (¥ 100M) Cost of Operating Ordinary Operating Ordinary Revenue Revenue Breakdown SG&A Sales Income Income Margin Margin Advertising-related 439 Marketing Corporate services, etc. 54 Solutions 533 Information listing 33 86 165 280 280 52.6% 52.7% Bu
Slide 59: Business Segment Breakdown
Business Segment Breakdown Marketing Solutions Business Advertising-related: Listing advertising (paid search advertising, interest-based advertising) Display advertising (banner, text, e-mail, and video) Corporate Services and Others: Data Center-related, Yahoo! WebHosting and others Information Li
Slide 60: Quarterly SG&A Breakdown
Quarterly SG&A Breakdown (¥ 100M) Major Factors for YoY Changes Composition QoQ YoY Number of employees reached 11/2Q 12/1Q 12/2Q Ratio Change Change 5,475, up 467 persons (9.3%) Personnel Expenses 81 91 89 32.4% -2.8% 9.0% Decrease because of Business Commissions 37 38 33 12.2% -12.1% -10.1% more e
Slide 61: FY2012-2Q Balance Sheets
FY2012-2Q Balance Sheets Increase/ Major Factors for (¥ 100M) Major Items 2011/9/30 2012/9/30 Decrease Increase/Decrease Assets Current Assets 2,756 4,463 1,706 Increase in cash from operating activities Cash and Cash Equivalents 2,131 2,561 429 Increase due to receivables on sale of Notes and Accou
Slide 62: FY2012-2Q Cash Flow Statements
FY2012-2Q Cash Flow Statements FY2012-2Q Major Items (July-Sep. 2012) Major Factors for Changes (¥ 100M) Operating Activities 482 Quarterly Net Income before Income Taxes Increase in quarterly net income 435 before income taxes Depreciation Expenses 28 Accounts Receivable and Payable -Trade -11 Othe
Slide 63: FY2012-2Q Highlights – Marketing Solutions Business (1)
FY2012-2Q Highlights – Marketing Solutions Business (1) Listing advertising (Paid search advertising [Sponsored Search] and interest-based advertising [Interest Match] ) - Overall revenue of listing advertising expanded by 14.8% compared with the same quarter last year: based on enhancement of funct
Slide 64: FY2012-2Q Highlights – Marketing Solutions Business (2)
FY2012-2Q Highlights – Marketing Solutions Business (2) Display advertising - Year-on-year and quarter-on-quarter growth of Prime Display advertising revenue, supported by revenue from London Olympic-related advertising, despite decline in Brand Panel advertising revenue. Increase of smartphone adve
Slide 65: FY2012-2Q Highlights – Consumer Business
FY2012-2Q Highlights – Consumer Business e-Commerce-related revenue (Yahoo! Auctions, Yahoo! Shopping, pay digital content and others) - Substantial growth of revenue from pay digital content, etc., due to steady performance of game- related services such as Yahoo! Mobage online game, compared with
Slide 66: Listing Advertising Revenue by Industry
Listing Advertising Revenue by Industry Industries with large year-on-year increase Transportation/Leisure Recruitment and Human Resources Services Real Estate/Housing/Household Equipment 11/2Q 3Q 4Q 12/1Q 2Q Transportation/Leisure 10.0% 7.4% 8.7% 9.3% 11.0% Finance/Insurance/Securities 10.3%
Slide 67: Display Advertising Revenue by Industry
Display Advertising Revenue by Industry Industries with large year-on-year increase Industries with large year-on-year decrease Transportation/Leisure Finance/Insurance/Securities Mobile Communications Service Government/Organizations Foodstuffs Computers and Accessories/Office Equipment
Slide 68: Quarterly Business Data (1)
Quarterly Business Data (1) Indicator (Quarterly average) 2011/2Q 2012/2Q Number of total monthly page views (millions)(1) 52,160 53,780 Number of total monthly smartphone page views (millions)(2) 3,490 9,351 Number of Daily UBs (Unique Browsers)(millions)(3) 49.32 53.09 Number of smartphone Daily U
Slide 69: Quarterly Business Data (2)
Quarterly Business Data (2) Indicator (Quarterly total) 2011/2Q 2012/2Q Transaction value of Yahoo! Auctions (100 millions of yen) 1,611 1,569 Transaction value of shopping-related (100 millions of yen)(1) 737 745 Transaction value of Yahoo! Auctions and shopping-related (100 millions of yen)(1) 2,3
Slide 70: Organization Chart of Yahoo Japan Corporation
As of October 1, 2012 Organization Chart of Yahoo Japan Corporation Board of Auditors Board of Directors President & CEO CMO CSO( * ) CSO(**) CCO Executive Vice President & COO CFO Media Services Marketing Consumer System Solutions Business Central Services CFO Office Company (867) Company (383) Man
Slide 71: Number of Directors and Employees
Number of Directors and Employees (at the End of Quarter) (Number of People) 5,000 4,000 3,000 2,000 1,000 0 09/9 12 10/3 6 9 12 11/3 6 9 12 12/3 6 9 Directors and Auditors of Subsidiaries 32 30 30 24 24 17 17 18 18 18 18 14 20 Employees of Subsidiaries 1,228 1,249 1,238 1,238 1,177 1,142 1,164 1,17
Slide 72: Consolidated Subsidiaries and Companies Accounted for by the Equity Method
Consolidated Subsidiaries and Companies Accounted for by the Equity Method (as of September 30, 2012) •Major consolidated subsidiaries at the end of FY2012-2Q Community Factory Inc. Crocos, Inc. Feedpath, Inc. Firstserver, Inc. GyaO CORPORATION IDC Frontier Inc. Indival, Inc. Netrust