Slide 1: LY Corporation Business Results FY2023 Full Year & Q4
LY Corporation Business Results FY2023 Full Year & Q4 May 8, 2024 Security Code: 4689
Slide 2: FY2023 Full-Year Business Results - Topics
FY2023 Full-Year Business Results - Topics • Adjusted EBITDA amounted to JPY414.9 B (YoY +24.7%) due to improved profitability and revenue to JPY1.8146 T (YoY +8.5%). • Both set new records for the fourth consecutive fiscal year. • For FY2023, full year adjusted EBITDA of the Strategic Business achi
Slide 3: Table of Contents
Table of Contents 1 Consolidated Business Results – Entire Group 2 Business Results/Topics – By Segment 3 FY2024 Policies
Slide 4: Consolidated Business Results – Entire Group
Table of Contents 1 Consolidated Business Results – Entire Group 2 Business Results/Topics – By Segment 3 FY2024 Policies
Slide 5: Entire Group – Performance
Entire Group Entire Group – Performance • PayPay (Consolidated) drove revenue growth. YoY income growth exceeded 20% as a result of cost optimization and selective focus on key business areas. Revenue/YoY Growth Rate Adjusted EBITDA/YoY Growth Rate Adjusted EBITDA Margin (JPY B) (JPY B) +30.0% +18.8
Slide 6: Factors Behind Change in Adjusted EBITDA
Entire Group Factors Behind Change in Adjusted EBITDA • Improvements in LY Corporation’s gross profit and SG&A contributed to the profit increase. Factors Behind Change in Adjusted EBITDA Improvements in FY2023 (SG&A/Adjusted EBITDA) (JPY B) (JPY) LY Corporation & Others1 PayPay Listed (consolidated
Slide 7: Factors Behind Change in Operating Income
Entire Group Factors Behind Change in Operating Income • Operating income increased by more than YoY +15% (excluding one-time gains), similar to the adjusted EBITDA. (JPY B) (JPY B) FY2022 FY2023 YoY 314.5 Increase in Loss on Increase in depreciation2 retirement of stock Adjusted EBITDA1 332.6 405.4
Slide 8: Factors Behind Change in Adjusted Net Income
Entire Group Factors Behind Change in Adjusted Net Income • Adjusted net income grew by approximately 3.3 times YoY as a result of an increase in operating income and other factors. (JPY B) (JPY B) FY2022 FY2023 YoY EBITDA Improvement adjustment Operating income 314.5 208.1 -106.3 in equity in items
Slide 9: Business Results/Topics – By Segment
Table of Contents 1 Consolidated Business Results – Entire Group 2 Business Results/Topics – By Segment 3 FY2024 Policies
Slide 10: Media Business – Performance
Media Business Media Business – Performance • Revenue increased with growth of account ads, and margin improved to exceed 35%. Revenue/YoY Growth Rate1, 2, 3 Adjusted EBITDA/YoY Growth Rate1, 2, 3 Adjusted EBITDA Margin1, 2, 3 (JPY B) (JPY B) Growth Growth +1.8% +7.0% Rate Rate 707.6 254.6 36.0% 695
Slide 11: Entire Group – Total Advertising Revenue
Media Business Entire Group – Total Advertising Revenue • Growth in account ads (YoY +22.3%) drove revenue growth for the entire Group. Gradual recovery in market conditions continues. Entire Group – Total Advertising Revenue¹ Entire Group – Total Advertising Revenue YoY Growth Rate¹ (JPY B) 606.4 +
Slide 12: Commerce Business – Performance
Commerce Business Commerce Business – Performance • Revenue and profit increased as a result of a recovery in domestic merchandise transaction value and cost optimization. Revenue/YoY Growth Rate1, 2, 3 Adjusted EBITDA/YoY Growth Rate1, 2, 3 Adjusted EBITDA Margin1, 2, 3 (JPY B) (JPY B) Growth Growt
Slide 13: Business Overview (Domestic E-Commerce Transaction Value)
Commerce Business Business Overview (Domestic E-Commerce Transaction Value) • Domestic Shopping transaction value bottomed out with launch of LYP Premium. Domestic Shopping Transaction Value1 Domestic Reuse Transaction Value1 Domestic Services Transaction Value1 – YoY Growth Rate – YoY Growth Rate –
Slide 14: Strategic Business – Performance
Strategic Business Strategic Business – Performance • Revenue increased with growth of PayPay (Consolidated). Strategic Business achieved profitability for the first time in the full fiscal year. Revenue/YoY Growth Rate1, 2 Adjusted EBITDA1, 2 Adjusted EBITDA Margin1, 2 (JPY B) (JPY B) Growth 11.5 5
Slide 15: PayPay Business Overview
Strategic Business PayPay Business Overview • Consolidated GMV grew by JPY2 trillion YoY, consolidated revenue exceeded JPY200 billion, and consolidated EBITDA achieved profitability. No. of Registered Users¹ GMV (Consolidated) 2, 3 Revenue (Consolidated)4 EBITDA (Consolidated)5 (Mil) (JPY T) (JPY B
Slide 16: FY2024 Policies
Table of Contents 1 Consolidated Business Results – Entire Group 2 Business Results/Topics – By Segment 3 FY2024 Policies
Slide 17: Security Measures
FY2024 Policies 1 Security Measures 2 Product Reinforcement 3 Disciplined Cost Allocation 16
Slide 18: Security Measures
FY2024 Policies 1 Security Measures 2 Product Reinforcement 3 Disciplined Cost Allocation 17
Slide 19: Overview of Information Leakage Due to Unauthorized Access
Overview of Information Leakage Due to Unauthorized Access • Malware infection of subcontractors’ PCs and other factors triggered multiple cases of unauthorized third-party access to our systems. • This led to the information leakage of users, business partners, employees, and other personnel. Timel
Slide 20: Causes of Incidents and Our Main Recurrence Prevention Measures
Causes of Incidents and Our Main Recurrence Prevention Measures • We will reinforce security measures for employee systems, etc., and fundamentally revise our safety management measures and subcontractor management. Causes of Incidents Main Recurrence Prevention Measures2 Common authentication syste
Slide 21: Measure for Employee Systems, Etc.
Measure for Employee Systems, Etc.2 • Scheduled to complete LY Corporation’s own measures within this fiscal year (separation of employee systems and authentication systems from NAVER, etc.). • Currently formulating plans to further accelerate the implementation schedule, including that of subsidiar
Slide 22: Measures for Service and Business Domains
Measures for Service and Business Domains • In addition to employee system and network operations, etc., will also terminate outsourcing relationship with NAVER in the service and business domains. Reinforcement Policies/Measures ⚫ Will also terminate outsourcing in the service and business domains.
Slide 23: Establishment of New Organizations
Establishment of New Organizations • Established new organizations to strengthen security governance. Reinforcement Policies/Measures ⚫ Established a Security Governance Committee directly under the President ⚫ Established a Group CISO Board that also includes SoftBank Corp. 22
Slide 24: Impact on Business & Financial Performance
Impact on Business & Financial Performance • Prioritizing the acceleration of security reinforcement measures. For FY2024, approx. JPY15.0 B anticipated for the cost of countermeasures. Approx. JPY15.0 B anticipated in FY2024 as countermeasure expenses • Preliminary estimated figure for costs associ
Slide 25: Revision of Management Structure
Revision of Management Structure • Strengthen governance by further separating management from business execution functions. • As directors, Idezawa and Kawabe will be responsible for governance, including security measures. Shin (CPO) and Oketani (CSO) will focus on business promotion. Current Stru
Slide 26: Product Reinforcement
FY2024 Policies 1 Security Measures 2 Product Reinforcement 3 Disciplined Cost Allocation 25
Slide 27: Product Reinforcement
Product Reinforcement • Reinforce the service gateways in FY2024 to propel service growth. Reinforce LINE Yahoo! JAPAN LYP Premium service gateways Revamp App Revamp Search Advertisement Service growth Commerce PayPay Generative AI 26
Slide 28: LYP Premium
LYP Premium • Free members increased as a result of sales promotional measures. Will expand paid members through additional benefits, etc. Yahoo! JAPAN Premium/LYP Premium1 Membership Planned Additional Benefits (LINE)5 (Mil) LINE Puri6 Use of multiple profiles Real-time backup 24.44 23.75 23.63 23.
Slide 29: Revamping of LINE App
Revamping of LINE App • Proceeding steadily towards the redesign in FY2024. Home Tab1 Chats Tab1 VOOM Tab1 Shopping Tab1 Place Tab1 New portal for news Augmented video content Shopping experience New discoveries with and other content and other features beginning with LINE guide map media Search ser
Slide 30: Revamping of Yahoo! JAPAN App
Revamping of Yahoo! JAPAN App • Scheduled to be released in the first half of FY2024. Aim for reaccelerated growth with the redesign. Yahoo! JAPAN App—DAU Trend Purpose of Revamp Increase DAUs and sessions by revamping tab structure to meet user DAU grew with the revamp in 2015. needs; increased num
Slide 31: Search
Search • Integrated commerce search started off steadily, anticipating a 1.5X increase in no. of products within FY2024. Percentage by Key Query Domain (Commerce/Local/Knowledge)1 Reinforcing Integrated Commerce Search Increase revenue by enhancing custom features based on queries Ideal State and lo
Slide 32: Advertisement
Advertisement • Reinforcing monetization through functional improvements of account ads. • For display ads, introducing various measures to propel growth while conducting responses to the end of third- party cookies. Account Ads Display Ads 1 Increase no. of paid accounts • Reinforce monetization by
Slide 33: Commerce Business
Commerce Business • Growth of Yahoo! JAPAN Shopping accelerated as a result of cross use of the Group’s assets. Yahoo! JAPAN Shopping Transaction Value¹ Cross Use by LYP Premium Members Measures to Promote Cross Use – YoY Growth Rate +10.3% New LYP Premium Members New “Shopping” tab on the LINE app
Slide 34: Strategic Business (PayPay)
Strategic Business (PayPay) • PayPay will aim for top-line growth and improved profitability. Increase average spend and interest income from revolving 1 credit by promoting use of credit card payment and co-use with physical credit cards Promote use by integrating payment experiences for code Launc
Slide 35: Generative AI Strategy
Generative AI Strategy • Accelerate implementation of generative AI in services based on a multi-vendor strategy. • Anticipated to generate a revenue of JPY110.0 billion over the medium-to-long term. FY2023 Utilized Generative AI in 16 Services (Mainly for Individual Users) FY2024 Implementation of
Slide 36: Disciplined Cost Allocation
FY2024 Policies 1 Security Measures 2 Product Reinforcement 3 Disciplined Cost Allocation 35
Slide 37: Disciplined Cost Allocation
Disciplined Cost Allocation • Allocate costs to security measures and domains in need of product reinforcement in line with FY2024 policy. FY2024 Cost Allocation Policy (YoY Change/Excludes PayPay and listed subsidiaries) Security measures Approx. JPY+15.0 B Product reinforcement • Some linked with
Slide 38: FY2024 Income Guidance
FY2024 Income Guidance • Adjusted EBITDA is expected to increase, but adjusted EPS is expected to stay at the FY2023 level due to the absence of one-time gains. Entire Group Adjusted EBITDA (YoY) Adjusted EPS (YoY) (JPY B) (JPY) 18.9 YoY +3.6 to +6.0% Impact of 3.8 merger tax effect 14.3 to15.3 YoY
Slide 39: FY2024 Consolidated Full-Year Guidance
FY2024 Consolidated Full-Year Guidance • Newly included adjusted EPS in earnings guidance. Will aim to increase revenue and profit through product reinforcement. Segment Item FY2023 FY2024 YoY Revenue JPY1.81 T Approx. JPY 1.93 T Approx. +7 % Adjusted EBITDA JPY414.9 B JPY 430.0 to 440.0 B +3.6 to 6
Slide 40: Capital Allocation
Capital Allocation • In FY2025, will aim to exceed JPY20 for adjusted EPS. Capital Allocation Policy1 (Cumulative Approximate Value for FY2023-2025) Cost of Equity/Adjusted EPS (JPY B) Merger effect/ financing 200.0 Buffer for additional 515.0 investments & capital Cost of Equity policy (for the pas
Slide 41: 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 LY Corporation (Company) and its consolidated subsidiaries and affiliates. The Company cautions you that a number of important factors c
Slide 42: Create an amazing life platform that brings WOW! to our users.
Create an amazing life platform that brings WOW! to our users.