Slide 1: Earnings Presentation IFRS Q3 FY2019
LIFULL Co., Ltd. Earnings Presentation IFRS Third Quarter of the Fiscal Year Ending September 30, 2019 (October 2018 to June 2019) Disclaimer The opinions and projections, etc. contained herein represent the judgment of LIFULL Co., Ltd. at the time this document was prepared. We provide no guarantee
Slide 2: Index
Index 1. Key Points P02 2. Highlights P03 3. Growth Strategy P04 4. Q3 Financial Results P07 5. Appendices P41 6. IR Office Information P52
Slide 3: Key Points
Key Points 1. FY 2019/9 Q3： Revenue: JPY 29.3 billion, accelerated growth of +12.8% YoY (Total Results for Oct. to Jun.) EBITDA: JPY 4.2 billion, steadily progressing toward the FY targets at -4.1% YoY 2. Proactive investments for future growth Investment to strengthen LIFULL HOME’S media presence
Slide 4: Highlights
Highlights Revenue EBITDA EBITDA Margin Net Profit +12.8% -4.1% -2.6pt -11.3% JPY 29.3 bil. JPY 4.2 bil. 14.5% JPY 2.0 bil. (FY 2018 Q3 : JPY 26.0 bil.) (FY 2018 Q3 : JPY 4.4 bil.) (FY 2018 Q3 : 17.1%) (FY2018 Q3 : JPY 2.2 bil.) HOME’S Services Business Overseas Business Revenue Client Network Reven
Slide 5: Growth Strategy
Growth Strategy (Overview) Copyright(c) LIFULL Co., Ltd. All Rights Reserved. 4
Slide 6: Mid-Term Management Plan Quantitative target
Mid-Term Management Plan Quantitative target FY2020/9 Revenue JPY 50+ billion EBITDA Margin approx. 20% 5
Slide 7: To Achieve Mid-term Plan 2020
To Achieve “Mid-term Plan 2020” Investing in FY2019/9 to achieve the targets of the “Mid-term Plan 2020” 01 Growth of HOME’S Services Business 02 Growth of Overseas Business • ARPA*1 x Client network*2 • Strengthen Trovit business ┗ Improve ARPA through growth • Make Mitula a subsidiary ┗ Strengthen
Slide 8: Consolidated Financial Results for FY2019/9 Q3
Consolidated Financial Results for FY2019/9 Q3 Copyright(c) LIFULL Co., Ltd. All Rights Reserved. 7
Slide 9: Condensed statements of income and loss IFRS
Condensed statements of income and loss IFRS Sales Revenue grew by +12.8% over FY2018 Q3. EBITDA was down -4.1% due to proactive growth investments Unit: JPY mil FY2018 Q3(Oct.-Jun.) FY2019 Q3(Oct.-Jun.) Change Change % Revenue 26,015 29,352 +3,337 +12.8% *1 Cost of revenue 2,872 3,342 +469 +16.3% *
Slide 10: Temporary impact of growth investments – YoY analysis
Temporary impact of growth investments – YoY analysis– Proactively investing in growth to increase business scope (Unit: JPY hundred million) M&A Reorganization Other Marketing Total Costs Costs Costs Costs Costs 0 -2 -4 -6.6 -11.1 Growth Invest. of approx. -6 -1.5 -8 JPY 1.1 - 1.6 Billion -10 -3 -1
Slide 11: Progress of business forecast for the FY2019/9
Progress of business forecast for the FY2019/9 IFRS Condensed Statemants of Income and Loss Revenue by Service FY2019/9 FY2019/9 FY2019/9 FY2019/9 Oct.-Sep. Oct.-Jun. Progress Oct.-Sep. Oct.-Jun. Change Unit: JPY mil [Full-year [Actual] % Unit: JPY mil [Full-year [Actual] % forecast] forecast] Reven
Slide 12: Sales by segment, segment income and loss
Sales by segment, segment income and loss IFRS Despite the M&A costs in Overseas Business, the acquisition of Mitula has resulted in large revenue gains in addition to growth in Trovit. As planned, HOME'S Services have seen reductions in revenue due to investments in advertising. FY2018/9 Q3 FY2019/
Slide 13: Quarterly performance history – Consolidated revenue
Quarterly performance history – Consolidated revenue – Large gains in revenue during Q3 (Apr. - Jun.) up +16.9% YoY (Unit: Millions of yen) +16.9% 12,000 11,208 10,000 9,541 9,753 9,056 8,154 8,345 8,549 8,391 8,128 8,000 7,793 7,527 7,107 6,846 6,910 6,441 6,280 6,096 6,000 5,457 4,281 4,318 3,852
Slide 14: Business growth and breakdown – Consolidated revenue
Business growth and breakdown – Consolidated revenue – In addition to steady growth in HOME’S Services, increased speed in the growth of Overseas Businesses (Unit: Millions of yen) 30,589 4.9% 26,015 Others 23,957 22.1% Overseas 20,655 73.0% Services 2015/10 – 2016/10 – FY2018 FY2019 *Calculated acc
Slide 15: Condensed statements of financial position and goodwill
Condensed statements of financial position and goodwill IFRS JPY 3.2 bil. in short-term loans used for the acquisition of Mitula As of As of Change Change % Main items Unit: JPY mil Sep 30, 2018 Jun 30, 2019 Current assets 12,900 15,330 +2,430 +18.8% Increase in cash and deposits +1,341 Refer to ”Co
Slide 16: Condensed statements of cash flow
Condensed statements of cash flow IFRS Cash and cash equivalents increased by JPY 1.3 bil. to 8.9 bil. from FY2018 Q3 FY2018/9 Q3 FY2019/9 Q3 Change Main items Unit: JPY mil Oct.-Jun. Oct.-Jun. Items FY2018/9 Q3 FY2019/9 Q3 Profit for the period before tax +3,552 +3,098 Depreciation and amortization
Slide 17: Services
Services Copyright(c) LIFULL Co., Ltd. All Rights Reserved. 16
Slide 18: Comparison with same period in previous year – Effects of operation withdrawals
Comparison with same period in previous year – Effects of operation withdrawals – Sales revenue up +4.2% excluding effects from withdrawal of the Reform Business Revenue (Unit: Millions of yen) Withdrawal from Reform Business • LIFULL HOME’S Reform +4.2% → Discontinued in Sept. 2018 21,638 21,434 22
Slide 19: KPIs - Client network・ARPA
KPIs - Client network・ARPA - Increased numbers of clients and marginal change in ARPA ARPA （JPY） Client Network FY2017 Q3 FY2018 Q3 FY2019 Q3 FY2017 Q3 FY2018 Q3 FY2019 Q3 91,521 88,800 91,474 26,853 27,111 24,305 *ARPA figures are the average of each nine-month period. *Above figures are preliminar
Slide 20: Measures to improve ARPA – Strengthening media presence
Measures to improve ARPA – Strengthening media presence – Continue investments in strengthening media presence Strive to become market leader by maximizing provided value LIFULL HOME’S Investments in Media Presence Content Campaigns Branding UI & UX SEO Paid Online Marketing 19
Slide 21: (Ref) Growth of LIFULL HOME'S
(Ref) Growth of LIFULL HOME’S Site traffic back on track with smooth growth Profitability improved to reach the EBITDA target of approx. 20% in the Mid-Term Plan 〈 Traffic (Organic) 〉 〈 Segment Revenue Ratio (Quarterly Results) 〉 20.0% +38.0% 17.9% 18.0% 15.5% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.1%
Slide 22: Pricing structure revisions – Rental & sale properties
Pricing structure revisions – Rental & sale properties – Revisions to the LIFULL HOME'S pricing structure will be implemented from October 2019 Improve value for users and clients by removing additional costs on main optional services. Clients 1) Reduce the effort of selecting optional services 2) A
Slide 23: Pricing structure revisions – Rental & sale properties
Pricing structure revisions – Rental & sale properties – Raise Basic Membership and inquiry fees and include optional services in the membership package. Original Pricing Structure New Pricing Structure (Until Sept. 2019) (From Oct. 2019) Basic Membership Fee Membership Fees (Monthly) Basic Membersh
Slide 24: Overseas Businesses
Overseas Businesses Copyright(c) LIFULL Co., Ltd. All Rights Reserved.
Slide 25: Overseas businesses - Q3 performance
Overseas businesses - Q3 performance - Large gains from the acquisition of Mitula in January 2019 Unit: JPY mil. Revenue Segment income and loss +140.9% *1 +363.1% *2 +96.7% 6,750 1,223 5,514 +145.6% 648 2,802 264 FY2018 Q3 Total FY2019 Q3 Total FY2019 Q3 FY2018 Q3 FY2019 Q3 Total FY2019 Q3 (Release
Slide 26: Trovit × Mitula – Q4 result trend
Trovit × Mitula – Q4 result trend – Steady growth in the second pillar of LIFULL Group sales volume 17,881 Trovit & Mitula results based in EUR (■ Results from Mitula before acquisition) Unit: thousand EUR Steady Growth Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2015 2015 2015 2016 2016 2
Slide 27: Overseas businesses – Segment P&L (Quarterly Trend)
Overseas businesses – Segment P&L (Quarterly Trend) – Maintained profitability despite high temporary M&A costs 単位：百万円 Unit: JPY mil. 〈 四半期 Segment Quarterly セグメント損益 P&L 〉 ■Trovit&Mitula ■International Division ■PPA ■M&A Costs ■ Other 542 505 331 -71 -78 PPA depreciation costs associated with the ac
Slide 28: Growth strategy – Review
Growth strategy – Review – Plan to increase service area and accelerate monetization of each region From FY2015/03 Q2 Earnings Presentation (https://lifull.com/wp-content/uploads/2015/09/presentation_20141113.pdf) 27
Slide 29: Growth strategy – Review
Growth strategy – Review – Increase traffic and link to multidimensional revenue opportunities Accelerate monetization by consolidating management of Trovit and Mitula From FY2019/09 Q2 Earnings Presentation (https://lifull.com/wp-content/uploads/2019/05/190513_en_presentation_FY2019_2Q.pdf) 28
Slide 30: Growth strategy – Service regions
Growth strategy – Service regions – Increase service regions from 39 to 63 countries worldwide Focus on business expansion in existing service areas 29
Slide 31: Growth strategy – Monetization of each region
Growth strategy – Monetization of each region – Accelerate monetization with growth strategies based on the characteristics of each region Focus on growth developed and developing markets for the present Focus on Developed and Developing Markets 01 Developed Markets 02 Developing Markets 03 Potentia
Slide 32: Growth strategy in growth markets
Growth strategy – Growth strategy in growth markets – Increase aggregation business around Trovit and Mitula Growth of Aggregation Business Products & Marketing ・Consolidate organization to strengthen sales ・Develop new products ・Retarget users to related markets ・Consolidate organization to improve
Slide 33: Growth strategy for developing markets
Growth strategy – Growth strategy for developing markets – Actively consider portal businesses to directly assist users’ property searches • Combine the domestic and international portal knowhow of LIFULL and Mitula • Strive to reach the number one position in crucial markets • Consider the market e
Slide 34: Other Businesses
Other Businesses Copyright(c) LIFULL Co., Ltd. All Rights Reserved. 33
Slide 35: Other businesses – Segment sales revenue (quarterly)
Other businesses – Segment sales revenue (quarterly) – Maintain similar level of revenue when excluding effects of transfer of LHL*1 Transfer of LHL Revenue by quarter Unit: JPY mil. 479 ■Existing businesses*2 ■New businesses excluding the 4 main businesses Maintain Establishment of the four subsidi
Slide 36: Other businesses – Segment P&L (quarterly)
Other businesses – Segment P&L (quarterly) – Other established businesses are continuing smoothly without regard to the transfer of LHL. Additional investments are also being made into Rural Revitalization (Quarterly Segment P&L) Unit: JPY mil. Transfer of LHL ■既存事業 Existing ※ ■4社以外の新規事業 Other new b
Slide 37: Other businesses – Rural revitalization
Other businesses – Rural revitalization – Proactive investment in Rural Revitalization to promote the compilation of vacant houses for repurposing into a database 01 02 03 Compilation of database for vacant properties Recruitment / Training Repurposing vacant properties Akiya Bank Training program U
Slide 38: Other businesses – Case studies of vacant property utilization
Other businesses – Case studies of vacant property utilization – Public Private Partnerships Aizu-Bandai Est. of Regional Revitalization Agreements Utilization of Izu Shimoda Recreational Facilities Case Studies [Kamaishi, Iwate] [Sabae, Fukui] Turned vacant houses into share Renovated traditional h
Slide 39: (Ref) Vacation rental market
(Ref) Vacation rental market Steady growth in vacation rentals since new laws came into effect one year ago Licensed facilities 2,210 17,143 Over12,000 registered facilities 8,200 released on site (As of 19 June 2019) 15 June 2018 July 2019 Gross numbers of lodgers Automatic listing on international
Slide 40: LIFULL Worldview – LIFULL Group
LIFULL Worldview – LIFULL Group – Create a society where everyone can attain "comfort" and "happiness" through continuous social innovations Become the best life-event database and solution company in the world. Build the biggest life-event database in the world to offer the best solutions for each
Slide 41: LIFULL
m4 Ly) LIFULL 4506 LIFE. FULLE.
Slide 42: Appendices
Appendices Copyright(c) LIFULL Co., Ltd. All Rights Reserved. 41
Slide 43: Corporate info (as of March 31, 2019)
Corporate info (as of March 31, 2019) Company LIFULL Co., Ltd. Stock code 2120 (TSE 1st Section) Representative Takashi Inoue, President and CEO History Mar. 12, 1997 Established Oct. 2006 Listed in TSE, Mother’s Section Mar. 2010 Listed on TSE 1st Section President and CEO Takashi Inoue Capital JPY
Slide 44: LIFULL Group Companies
LIFULL Group Companies (in chronological order by effective date of establishment or addition to the scope of consolidation) PT. LIFULL MEDIA INDONESIA *1 Planning and operation of “LIFULL Rumah” a real estate and housing information website in Indonesia Home hunting proxy service in Jakarta for
Slide 45: Segments and Major Services
Segments and Major Services Segments Main services HOME’S Services Business LIFULL HOME’S AD Master (former Renter’s Net) NabiSTAR LIFULL Marketing Partners Co., Ltd. Overseas Businesses Trovit (Trovit Search, S.L.) Mitula (Mitula Group Limited) LIFULL Tech Vietnam Co., Ltd. Other Businesses LIFULL
Slide 46: Number of employees – Across All Businesses
Number of employees – Across All Businesses – Number of overseas employees has increased due to the expansion of Overseas Businesses (Number of employees) 1548 1500 1275 1199 1118 1000 919 ■Overseas Businesses 735 ■Other Businesses 561 ■HOME’S Services Business 500 0 End of End of End of End of End
Slide 47: Consolidated statements of profit and loss (quarterly)
Consolidated statements of profit and loss (quarterly) FY2017/03 FY2017/09 FY2018/09 FY2019/09 Unit : JPY mil 1Q 2Q 3Q 4Q 1Q 2Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q Revenue 6,846 6,910 7,107 9,056 7,793 8,154 8,128 9,541 8,345 8,549 8,391 11,208 9,753 HOME'S Services Business 5,616 5,782 5,955 7,662 6,472 6,816 6,7
Slide 48: Expense-to-revenue ratio IFRS
Expense-to-revenue ratio IFRS Increase in Cost of Sales and Other SG&A due to M&A costs Higher percentage of advertising costs due to highest expenditure in marketing ever +3.2pt -3.9pt 28.3% +1.7pt 29.0% 32.1% 30.0% Cost of sales and other SG&A Advertising expenses 26.7% 32.7% +5.5pt +0.6pt +1.4pt
Slide 49: (Ref.) Pricing structure revisions – Rental & Sales
(Ref.) Pricing structure revisions – Rental & Sales – New Pricing Structure Basic Membership Fee Inquiry Fee by Inquiry (monthly) Property Inquiry Inquired Property Rent (Mon.) x 9.5% Rental ¥15,000 (e-mail / Tel.) Company Inquiry Number of Inquiries x ¥5,000 Property Inquiry Inquired Property Sale
Slide 50: External market data
External market data 2015 2016 2017 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 (Jan-Dec) (Jan-Dec) (Jan-Dec) Capital Region 40,449 35,772 37,132 2,978 2,817 3,366 6,480 1,934 2,490 3,617 2,
Slide 51: (Ref.) Domestic market environment
(Ref.) Domestic market environment 01 02 03 04 Number of Real Estate Number of Licensed Number of Offices Size of Real Estate Companies Real Estate Agencies Listing Market 328,553 123,782 (105,015 Corporates) 352,733 Approx. 900+ billion yen (Based on 2017 values from the (Based on 2017 values from
Slide 52: (Ref.) Overseas competitors
(Ref.) Overseas competitors Competitors have high market capitalization due to their user shares in each country. [Rightmove, UK] Market Cap As of September, 2019 (forecast) Revenue JPY 35.3 bil. (YoY+10%） [LIFULL, JP] JPY 914.3 bil. Market Cap EBITDA JPY 26.7 bil. Revenue 42.3B.JPY EBITDA 5.9B.JPY
Slide 53: IR Office Information
IR Office Information IR Website English https://LIFULL.com/en/ir/ Japanese https://LIFULL.com/ir/ TEL 03-6774-1603 (Monday to Friday 10:00AM-6:00PM) E-mail ir@LIFULL.com FAX 03-6774-1737 Annual Report 2017 Other Information Twitter Facebook Page Japanese https://lifull.com/news/10305/ English https