Ly Corporation · TSE:4689
Ly — Z Holdings — FY2022 Earnings Presentation
29 slides from Ly's earnings presentation, Apr 28, 2023
Slide 1: FY2022 Full Year & Q4 Business Results
Security Code: 4689 Z Holdings Corporation Business Results FY2022 Full Year & Q4 April 28, 2023
Slide 2: FY2022 Full-Year Business Results – Topics
FY2022 Full-Year Business Results – Topics Revenue & adjusted EBITDA renewed record high for 3 consecutive years. Operating income also increased 4 consecutive years, marking a record high: JPY314.5 B. • Account ad revenue maintained double-digit growth despite weak ad market. FY2022 • PayPay grew s
Slide 3: Table of Contents
Table of Contents 1 FY2022 Results 2 FY2023 Management Policy/Outlook
Slide 4: FY2022 Results
Table of Contents 1 FY2022 Results 2 FY2023 Management Policy/Outlook
Slide 5: Whole Group – Performance
Whole Group – Performance Whole Group • Record high revenue: JPY1.67 T. • Adjusted EBITDA exceeded guidance despite deteriorated market conditions and impact of PayPay consolidation. Revenue/YoY Growth Rate1 Adjusted EBITDA/YoY Growth Rate1 Adjusted EBITDA Margin1 (JPY B) (JPY B) Excluding PayPay +3
Slide 6: Factors of Change in Adjusted EBITDA
Factors of Change in Adjusted EBITDA Whole Group • Income increased; covered negative one-time factors through cost optimization, etc. Factors of Change in Adjusted EBITDA Major Factors of Change (JPY B) (JPY B) Business • Impact of revenue increase, etc. +2.2 Absence of gain growth Media • Increase
Slide 7: Whole Group – Total Advertising Revenue
Whole Group – Total Advertising Revenue Whole Group • Search ads remained stable; account ads maintained high growth. • Revenue decreased in display ads resulting from weak commerce ads due to cost optimization, and decreased ad placements. Whole Group – Advertising Revenue1 Whole Group -- Advertisi
Slide 8: Media Business – Performance
Media Business – Performance Media Business • Adjusted EBITDA margin improved due to restraint in marketing cost, etc. Revenue/YoY Growth Rate1 Adjusted EBITDA/YoY Growth Rate 2 Adjusted EBITDA Margin2 (JPY B) (JPY B) +74.8% +59.9% +9.2% +0.1% +0.8% 44.3% Growth Rate Growth Rate 641.2 642.0 260.0 26
Slide 9: Commerce Business – Performance
Commerce Business – Performance Commerce Business • Significant improvement in profitability due to shift to a policy of balancing growth and profitability. Revenue/YoY Growth Rate1 Adjusted EBITDA/YoY Growth Rate２ Adjusted EBITDA Margin² (JPY B) (JPY B) +8.7% +16.8% +4.3% +3.1% -13.6% Growth Rate G
Slide 10: Business Overview (EC Transaction Value)
Business Overview (EC Transaction Value) Commerce Business • Domestic services grew due to economic reopening, and reuse business achieved stable growth. Group EC Transaction Value1,2 Group EC Transaction Value1 - YoY Growth Rate (JPY B) 4,114.3 3,830.0 328.6 Overseas EC 251.2 184.0 Domestic Digital
Slide 11: Strategic Business – Performance
Strategic Business – Performance Strategic Business • Aim to quickly turn profitable by selectively focusing on key businesses and improving PayPay’s profitability, etc. Revenue/YoY Growth Rate1 Adjusted EBITDA1 Adjusted EBITDA Margin1 (JPY B) (JPY B) +73.3% 19.1 Growth Rate +26.7% -8.0% 21.9% Exclu
Slide 12: PayPay GMV Exceeded JPY 10 T Milestone
｜ Business Overview Strategic Business Consolidated PayPay GMV1,2,4 Standalone PayPay GMV1,3,4 (JPY T) (JPY T) 10.2 YoY +33.7% 7.9 Exceeded JPY10 T milestone 7.6 YoY +45.5% 5.4 in an exceptionally fast 4.5 years since service launch JPY10 T in 4.5 years FY2021 FY2022 FY2021 FY2022 1. The use of the
Slide 13: Strategic Business: PayPay Revenue and EBITDA
｜ Business Overview Strategic Business Consolidated Revenue1 Consolidated EBITDA1 (JPY B) (JPY B) 167.6 YoY +64.0% Large growth in revenue; -11.9 102.2 making steady progress towards profitability Reduced losses -43.2 FY2021 FY2022 FY2021 FY2022 1. Consolidated financial statements of PayPay Card Co
Slide 14: FY2023 Management Policy/Outlook
Table of Contents 1 FY2022 Results 2 FY2023 Management Policy/Outlook
Slide 15: Status of Group Reorganization
Status of Group Reorganization • Group reorganization including merger with core subsidiaries to complete on October 1, 20231. • Offices are being sequentially consolidated to Kioicho. Companies Subject to Reorganization New Company Name (Scheduled) Z Holdings Corporation (Surviving company) LY Corp
Slide 16: Business Environment of New Company
Business Environment of New Company External Environment Internal Factors Recession/sluggish advertising market Decline in competitiveness of core ▼ businesses (media/search/commerce) Short-term revenue growth difficult Delayed generation of Group synergies Top priority issues: achieving double-digi
Slide 17: How We Position FY2023
How We Position FY2023 Improve business efficiency through the merger and lay the foundation for renewed growth from FY2024 onwards. Improvement of For the renewed growth from business efficiency FY2024 onwards Redefinition of growth strategy JPY30 B fixed cost reduction Steady implementation of Sel
Slide 18: Improvement of Business Efficiency
Improvement of Business Efficiency For the Renewed Growth from FY2024 Onwards
Slide 19: Radical Cost Reduction
Radical Cost Reduction Compared to FY2022, reduce fixed cost in the size of JPY30 B in the new company1. Raise fund for investment while securing profit growth. Reduction of Fixed Cost of New Company1 Major Cost Reduction Items (Excludes depreciation) Hiring freeze (JPY B) Thorough review of busines
Slide 20: Selection and Concentration
Selection and Concentration Selectively reorganize businesses mainly in loss-making domains and consolidate management resources. Video Business Domain Financial Business Domain Other • LINE LIVE (Service terminated on March 31, 2023) • LINE Bank (Japan) • LINE CLOVA (Absorption-type demerger to WOR
Slide 21: For the Renewed Growth from FY2024 Onwards
Improvement of Business Efficiency For the Renewed Growth from FY2024 Onwards
Slide 22: Outcomes of the Merger
Outcomes of the Merger Vigorously promote the integration/unification of foundations/services/organizations. Before Merger After 54.98 mil1 95.00 mil2 54.98 mil1 95.00 mil2 Foundation service Linkage ID ID ID ID ID Future ID integration also considered Premium Membership LYP Premium Membership Point
Slide 23: Growth Strategy of New Company
Growth Strategy of New Company • Reinforce media and search, domains that have high profitability. • Focus on ID linkage/premium membership, as fundamental measures to fully leverage LINE Messenger and PayPay. Reinforce Media/Search Content Exposure Store Commerce Local info Referral PayPay LINE Var
Slide 24: ID Linkage
ID Linkage Begin ID linkage at the same timing as the merger1 Linkage between Linkage with PayPay ID LINE ID & Yahoo! JAPAN ID Begin in October 2023 Begin within FY2024 (Scheduled) (Scheduled) 1. LINE ID and Yahoo! JAPAN ID to be linked at the same timing as the merger. 23
Slide 25: LYP Premium Membership
LYP Premium Membership Benefits for the group-wide premium membership program to be upgraded in November. Begins in November 2023 (scheduled) TBD Unlimited use of Useful albums Better backups LINE Stickers Premium LINE Benefit1 Now Members Now Members ＋Videos Photos Photos Once a only Realtime day C
Slide 26: FY2023 Consolidated Full-Year Guidance
FY2023 Consolidated Full-Year Guidance Aim for double-digit income growth through income growth in subsidiaries (ZOZO, ASKUL, etc.), improved business efficiency, and selective focus in key businesses. Item FY2022 Results FY2023 Guidance YoY Whole Group Revenue JPY1.67 T Approx. JPY1.90 T Approx. +1
Slide 27: Goals and Directions for FY2023 and Beyond
Goals and Directions for FY2023 and Beyond Enter a new growth phase after improving business efficiency. FY2023 FY2024 Onwards Revenue Approx. JPY1.90 T Regrowth under new strategy Adjusted JPY356.0 to 366.0 B EBITDA Reduction in fixed cost/selective focus in key Investment policy businesses (Review
Slide 28: 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 29: Unleashing the infinite potential of all people
Unleashing the infinite potential of all people, with the power of information technology