Ly Corporation · TSE:4689
Ly — Z Holdings — FY2022 Q3 Earnings Presentation
32 slides from Ly's earnings presentation, Feb 2, 2023
Slide 1: Z Holdings Corporation Business Results FY2022 Q3
Security Code: 4689 Z Holdings Corporation Business Results FY2022 Q3 February 2, 2023
Slide 2: FY2022 Q3 Business Results – Topics
FY2022 Q3 Business Results – Topics Revenue: JPY453.6 B – highest quarterly revenue due to consolidation of PayPay. Adjusted EBITDA: approx. 79% of guidance despite impact of market changes. • Adjusted EBITDA (excluding PayPay standalone) increased due to cost optimization and selective focus on key
Slide 3: Table of Contents
Table of Contents 1 Consolidated Business Results – Whole Group 2 Topics/Business Results – By Segment 3 Merger of Core Group Companies
Slide 4: Table of Contents
Table of Contents 1 Consolidated Business Results – Whole Group 2 Topics/Business Results – By Segment 3 Merger of Core Group Companies
Slide 5: Whole Group – Performance
Whole Group – Performance Whole Group • Consolidated PayPay in Q3. Achieved highest quarterly revenue although challenging macro environment continues. • Adjusted EBITDA excluding PayPay standalone increased as a result of cost optimization and selective focus on key businesses. Revenue/YoY Growth R
Slide 6: FY2022 Revision of Full-Year Guidance
FY2022 Revision of Full-Year Guidance Whole Group • Adjusted EBITDA for the whole group revised from disclosing a range of guidance to JPY331.5 B. • Aim to achieve the revised guidance by absorbing market changes and impact of PayPay consolidation through cost optimization, etc. Segment Item FY2021
Slide 7: Response to Market Changes and Business Conditions
Response to Market Changes and Business Conditions Whole Group • Optimized costs (mainly sales promotional costs). Hiring freeze will make full contribution from the next fiscal year onward. • Selective focus on key businesses; promoted the consolidation of overlapping businesses within the Group. •
Slide 8: Revision of Financial Index/Financial Guidance
Revision of Financial Index/Financial Guidance Whole Group • Accompanying the consolidation of PayPay, revised financial index/financial guidance1 to reflect business characteristics. • Guidance for net leverage ratio2 (excluding financial business3) will be 3X or less to balance investment and disc
Slide 9: Table of Contents
Table of Contents 1 Consolidated Business Results – Whole Group 2 Topics/Business Results – By Segment 3 Merger of Core Group Companies
Slide 10: Media Business
Media Business
Slide 11: Media Business – Performance
Media Business – Performance Media Business • In addition to change in market conditions and impact from renewals of some services, effects from the launch of new products have tailed off. • Adjusted EBITDA margin maintained 40% level, due to measures that meet changes in market conditions and struc
Slide 12: Whole Group – Total Advertising Revenue
Whole Group – Total Advertising Revenue Media Business • Yahoo Japan display ads: Programmatic ads (excluding commerce ads) maintained last year’s level, but placements for reservation ads continue to decrease. Revenue of commerce ads also decreased due to cost optimization. LINE display ads revenue
Slide 13: Updates on Business Strategy: LINE Official Account
｜ Updates on Business Strategy: LINE Official Account Media Business • Despite changes in market conditions, no. of paid accounts increasing steadily due to its unique product feature which is increasingly recognized as an important CRM tool. • Aim to achieve medium- to long-term revenue growth by p
Slide 14: Selective Focus on Key Businesses – Strengthening Short-Video Business
｜ Selective Focus on Key Businesses – Strengthening Short-Video Business Media Business • Service KPIs expanded steadily despite changes in audience demographics due to renewal to LINE VOOM. • To capture demand in growing video ad market, selectively focused on key businesses. Status after Renewal1
Slide 15: New Sales Promotion Solution for Manufacturers
New Sales Promotion Solution for Manufacturers Media Business • Introduced sales promotion solution for manufacturers to maximize the LTV of brands, to make a full-scale development of digital sales promotion market. • In collaboration with manufacturers/retailers, will seek real-time POS linkage to
Slide 16: Commerce Business
Commerce Business
Slide 17: Commerce Business – Performance
Commerce Business – Performance Commerce Business • Improving the balance between growth and profitability through cost optimization and fundamental reinforcement of products. • Aim to hike Japan’s EC ratio and to achieve long-term growth by expanding PayPay’s ecosystem and through new e-commerce in
Slide 18: Business Overview (EC Transaction Value)
Business Overview (EC Transaction Value) Commerce Business • Group EC transaction value achieved JPY1.11 T (YoY +6.4%) as planned, mainly due to progress in cost optimization. • Domestic services EC grew to JPY176.5 B (YoY +34.8%) due to economic reopening and Japan’s nation-wide travel incentives.
Slide 19: Business Overview (Domestic Merchandise Transaction Value)
Business Overview (Domestic Merchandise Transaction Value) Commerce Business • Shopping business: Cost optimized through changes in campaign programs, achieving JPY471.2 B (YoY -1.4%) as expected. • Reuse business: Continues to grow steadily, mainly driven by PayPay Flea Market, expanding to JPY261.
Slide 20: Status After Integration of Sales Platforms
Status After Integration of Sales Platforms Commerce Business • Through cost optimization, cut costs (mainly fixed point-provision expense) and improved gross profit. Impact on transaction value from sales platform integration was within expectations. • Will transform to sustainable growth while imp
Slide 21: Strategic Business
Strategic Business
Slide 22: Strategic Business – Performance
Strategic Business – Performance Strategic Business • Large increase in revenue due to PayPay consolidation in FY2022 Q3. • Will improve profitability through growth in PayPay, cost optimization and reduced losses in new businesses, and selective focus on key businesses. Revenue/YoY Growth Rate1 Adj
Slide 23: Business Overview (PayPay)
｜ Business Overview Strategic Business • In addition to measures related to Japanese government’s promotion of individual number card, average spend and no. of payments increased. No. of registered users/GMV also steadily increased. • Accelerated growth in revenue while EBITDA is steadily improved.
Slide 24: PayPay & PayPay Card – Initiatives
｜ PayPay & PayPay Card – Initiatives Strategic Business • Launched PayPay Card Gold to be used as first-choice credit card (from November 24, 2022). Made a good start (uplift in unit spending, etc.). • PayPay Card transaction volume steadily increased (YoY +26.4%) due to successful collaborations wi
Slide 25: Other Domestic Financial Businesses – Major KPIs
Other Domestic Financial Businesses – Major KPIs Strategic Business • PayPay Card and PayPay Bank will further expand businesses through strengthened collaborations with PayPay. • LINE’s domestic financial business has steadily grown, capturing potential financial needs through LINE. PayPay Card – R
Slide 26: Table of Contents
Table of Contents 1 Consolidated Business Results – Whole Group 2 Topics/Business Results – By Segment 3 Merger of Core Group Companies
Slide 27: Changes in the Advertising Market Environment
Changes in the Advertising Market Environment • Rapid deterioration in market environment from latter half of FY2022. • Revenue rapidly decreasing in advertising which had been the growth driver. Declining competitiveness as an advertising product is also becoming a factor of the decrease. Growth Ra
Slide 28: To Make a Breakthrough...
To Make a Breakthrough...
Slide 29: Merger Among Z Holdings, LINE Corporation & Yahoo Japan Corporation (Scheduled)
Merger Among Z Holdings Corporation & LINE Corporation & Yahoo Japan Corporation (Scheduled) • Decided on the policy of merging Z Holdings Corporation and its core wholly owned subsidiaries: LINE Corporation and Yahoo Japan Corporation by around the end of FY2023. • Will further expedite decision-ma
Slide 30: Changes in Management Structure
Changes in Management Structure • From April 1, 2023, transition from Co-CEOs structure to single CEO. Shin, GCPO1 is scheduled to assume office as Representative Director. • After merger, plan to introduce company system for each business domain. Delegate authority to promote rapid service developm
Slide 31: 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 32: Unleashing the infinite potential of all people, with the power of information technology
Unleashing the infinite potential of all people, with the power of information technology