Rakuten Bank, Ltd. · TSE:5838
Rakuten Bank — Q3 2024 Earnings Presentation
69 slides from Rakuten Bank's earnings presentation, Feb 12, 2025
Slide 1: FY2024 Third Quarter IR Presentation
FY2024 Third Quarter IR Presentation Rakuten Bank, Ltd. https://www.rakuten-bank.co.jp/corp/english/investors/ *For detailed numerical data, please refer to the data book: https://www.rakuten-bank.co.jp/corp/investors/documents/doc/databook-20250212.xlsx * The figures in the document are truncated b
Slide 2: Contents
Contents 1 Rakuten Bank’s Corporate Profile 2 About Our Medium- to Long-Term Vision and Growth Strategy Overview of Results for Third Quarter of FY2024 3 and Revision of Full-Year Performance Forecast 4 Appendix 2
Slide 3: Rakuten Bank's Corporate Profile
1 Rakuten Bank’s Corporate Profile 3
Slide 4: Corporate Profile
Corporate Profile Name Rakuten Bank, Ltd. In its aim to be the “safe, secure, and most convenient bank,” Rakuten Bank leverages the Rakuten Group’s strengths to develop a host of Established January 14, 2000 distinctive services. Capital JPY32,616mm* Employees 1,105* (consolidated) NBF Shinagawa Tow
Slide 5: Our Philosophy
Our Philosophy Rakuten Bank is aware of our public role and social responsibilities as a bank, and we strive to establish sound efficient business operations based on high self-discipline, to maintain society's unwavering trust and establish value. In addition, as a member of the Rakuten Group, we s
Slide 6: Rakuten Bank's History
Rakuten Bank’s History April 21, 2023 Sep. 2008 Listed on the Entered a capital and business Prime Market of alliance with Rakuten, Inc.*1 the Tokyo Stock October 2010 January 2021 Exchange Became a wholly owned Became the first May 2010 subsidiary of Rakuten, Inc.*1 digital bank*2 in Feb. 2024 Chan
Slide 7: Scale of Operations
Scale of Operations ◼ The number of accounts increased as we promoted account acquisition by leveraging the customer base of the Rakuten Group. ◼ The number of main accounts also increased, and the increase in total deposit balance (+16.9% YoY) outpaced the growth in the number of accounts (+11.6% Y
Slide 8: Three Business Pillars
Three Business Pillars Services for Individual Customers Services for Corporate Customers and Sole Proprietors Three Features Deposits/ Personal asset loans of Our Corporate management Business Overwhelmingly convenient online services Transfers/ Enter- enabled by remittances tainment in-house syste
Slide 9: About Our Medium- to Long-Term Vision and Growth Strategy
2 About Our Medium- to Long-Term Vision and Growth Strategy 9
Slide 10: Medium- to Long-term Vision
Medium- to Long-term Vision*1 ◼ With an eye to the arrival of the zero-cash era, in April 2022 a medium- to long-term vision was formulated, indexed to FY2020, in the aim of becoming a leading FinTech company. Consolidated Consolidated Number of accounts (non-consolidated) ordinary income ordinary p
Slide 11: Two Pillars of Earnings (Non-Interest Income/Interest Income)
Two Pillars of Earnings (Non-Interest Income/Interest Income) Growth in Non-Interest Income Growth in Interest Income ・Achieve further growth by acquiring main accounts*1 ・Produce of Group's proprietary assets to have a and through cross-selling balanced and diversified loan portfolio ・Balanced expa
Slide 12: Robust Synergies with Unique Rakuten Ecosystem
Robust Synergies with Unique Rakuten Ecosystem Unique Ecosystem Trusted and Well-known Brand Customer Acquisition 70+ services*1 100mm+ membership*1*2 No.1 web brand in Japan*3 Cross-selling Most Popular*4 Deep & Rich Data Point Program × Technology (in Japan) Origination of Unique 100mm+ membership
Slide 13: Efficient Customer Acquisition through the Rakuten Ecosystem
Efficient Customer Acquisition through the Rakuten Ecosystem 100mm+ Rakuten membership*1 Money Bridge JPY 6.0tn SPU*3 (Point rewards) (Point rewards ・ favorable interest rate) 12.0ｍｍ accounts*10 domestic e-commerce GMS*2 NISA’s Account 42.7mm No.1*6 67.5% MAU*4*5 of new customers come via Rakuten Gr
Slide 14: Full-fledged Digital Banking Services
Full-fledged Digital Banking Services Deposits / Asset Management Loans ◼ Personal loan ◼ Deposits (JPY, foreign currency) ◼ Housing loan ◼ FX margin trading ◼ Education loan ◼ Personal financial management ◼ Reverse mortgage loan (“Money Support”) ◼ Investment property loans ◼ Real estate collatera
Slide 15: Our Main Accounts' Growth Momentum…
Non-Interest Interest Income Income Our Main Accounts’*1 Growth Momentum… Key Drivers of Main Account*1 Conversion Convert into Convenience main account*1 ✓ Full-fledged services ✓ Customer-centric first-class UI/UX Economic Benefit Open Rakuten Rakuten Bank Ecosystem account ✓ Rakuten Point rewards
Slide 16: Increases Our Per Account Earnings
Non-Interest Interest Income Income Increases Our Per Account Earnings Average Revenue per Account Average Deposit Balance per Account (Q3 FY2024) (As of Dec. 31, 2024) c. 4x c. 6x Non-main accounts Main accounts *1 Non-main accounts Main accounts *1 *1: Accounts that are used for direct debit or di
Slide 17: Compelling Rakuten Card Securitization Scheme
Non-Interest Interest Income Income Compelling Rakuten Card Securitization Scheme One-stop securitization service Increasing Credit card shopping GTV*3 receivables (Trust) *2 Securitized Senior E-commerce Shopping portion Assets GMS*1 GTV*3 Shopping Funding through Subordinated Portion acceleration
Slide 18: Securitization Business that Utilizes Rakuten Trust
Non-Interest Interest Creating Investment Opportunities on Our Own through the Income Income Securitization Business that Utilizes Rakuten Trust Monetary claims Example of a Scheme (Simplified) Arranger • Rakuten Card trust beneficiary rights • Other credit card receivables • Accounts receivable, et
Slide 19: Data Technology to Enlarge Our Interest Income
Non-Interest Interest Income Income Data Technology to Enlarge Our Interest Income Improve accuracy Advanced Credit Scoring EC – Expand credit access – Drive loan growth Contents Travel – Reduce credit cost Sports Commu- FinTech nity Mobile Optimized Marketing – Accelerate customer acquisition – Enh
Slide 20: Promising Data Monetization Opportunities
Promising Data Monetization Opportunities Our unique advantages enable us to expand the advertising business and improve the marketing efficiency of our banking services Rich Data Targeting Reach ✓ Sales of advertising solutions to external parties ✓ 16.4mm accounts*1 (KYC completion) ✓ Precise targ
Slide 21: Providing a New Customer Experience through BaaS
Providing a New Customer Experience through BaaS*1 Open API*2 Transportation 15.57 mm passengers per day*3 5.88 mm cardholders*4 （Launched May 9,2024） The Ogaki Kyoritsu Bank Entertainment Retail THE NISHI-NIPPON CITY BANK Real Estate/ Housing Other Regional Banks Life Insurance (“Rakuten Bank Dai-i
Slide 22: Overview of Results for Third Quarter of FY2024 and Revision of Full-Year Performance Forecast
Overview of Results for Third Quarter of FY2024 3 and Revision of Full-Year Performance Forecast 22
Slide 23: Deposit Balance Exceeded 12 Trillion Yen
Deposit Balance Exceeded 12 Trillion Yen ◼ Deposits exceeded JPY12tn within five months of reaching JPY11tn in deposits. ◼ Business expansion continued, driven by enhanced service convenience and our main account strategy. Deposit Balance (Non-consolidated） 12T 11T Deposit Balance 10T (Dec. 2024, no
Slide 24: Q3 FY2024 Financial Results
Q3 FY2024 Financial Results Key Financial and Other Data Ordinary Income Ordinary Profit Non-interest Income*1 ROE *2 ( FY2024 Q1-Q3, consolidated) (FY2024 Q1-Q3, consolidated) Ratio (FY2024 Q1-Q3, annualized 131.7 49.4 (FY2024 Q1-Q3, consolidated) basis, consolidated) JPY +30.3% YoY bn JPY +40.4% Y
Slide 25: Our Main Accounts' Growth Momentum
Our Main Accounts’*1 Growth Momentum ◼ Main accounts*1, which are highly profitable and have large deposit balances per account, increased at a faster pace than the total number of accounts. Number of Total Accounts and Main Accounts*1 （mm） YoY 15.2 16.4 +11.6% Total accounts 13.7 14.7 12.3 10.5 Non
Slide 26: Consolidated Statements of Income
Consolidated Statements of Income ◼ As a result of a significant increase in interest income driven by the accumulation of diversified investment assets and the Bank of Japan’s policy rate hike, the growth rates of ordinary income, gross operating profit, ordinary profit, and profit attributable to
Slide 27: Summary of Consolidated Financial Results
Summary of Consolidated Financial Results ◼ Driven by an increase in interest income, the growth rates of ordinary income, ordinary profit, and net income exceeded the YoY growth rate of the earnings forecast that was revised upward in November. Ordinary Income Ordinary Profit*1 Net Income*1*2 Forec
Slide 28: Revisions to the Consolidated Forecast for FY2024
Revisions to the Consolidated Forecast for FY2024 ◼ In light of our performance from Q1 to Q3, we have revised upward our consolidated forecast for FY2024 (revised forecast announced in November 2024), as shown below. (JPY bn, consolidated) FY2024 FY2024 FY2023 (Forecasts Change from (Latest Nov. fo
Slide 29: Interest and Non-Interest Income (Non-Consolidated)
Interest and Non-Interest Income (Non-Consolidated) ◼ The ratio of interest income to non-interest income trended at around 6:4 under the Bank of Japan’s negative interest rate policy. ◼ Since the lifting of this policy, our interest income has grown at a faster pace than non-interest income, and it
Slide 30: Interest Income (Non-Consolidated)
Non-Interest Interest Income Income Interest Income (Non-Consolidated) ◼ Interest on loans, interest on monetary claims bought, and others (interest on due from banks, interest and dividends on securities, etc.) all increased due to the expansion of investment assets. ◼ The Bank of Japan’s policy ra
Slide 31: Breakdown of Loans and Monetary Claims Bought
Non-Interest Interest Breakdown of Loans and Monetary Claims Bought Income Income ◼ Each category of the loans and the monetary claims bought increased in a well-balanced manner. Change from Dec. 31, 2023 Change from Mar. 31, 2024 （JPY bn, non-consolidated） Mar. 31, 2023 Mar. 31, 2024 Dec. 31, 2023
Slide 32: Expand Investment Assets
Non-Interest Interest Medium- to Long-term Vision Income Income Expand Investment Assets ◼ Steady growth in the balances of each middle-risk asset category. Total for Categories That Include Middle-Risk Assets (JPY bn, non-consolidated) Card loans (Personal loans) Investment property loans ABL (Asse
Slide 33: Balance Sheet Summary
Non-Interest Interest Balance Sheet Summary Income Income ◼ 80% of our investment assets adopt floating rates, which are mostly linked to TIBOR. ◼ The due from the Bank of Japan is also linked to changes in policy rates. (Dec. 31, 2024, non-consolidated) Loans + monetary claims bought, Loans Deposit
Slide 34: Rakuten Bank Reverse Mortgage Balance Exceeded JPY10bn
Non-Interest Interest Income Income Rakuten Bank Reverse Mortgage Balance Exceeded JPY10bn ◼ A strategic product to meet the needs for retirement funds in Japan’s aging society. ◼ Expansion of service lineup for individuals at different life stages to strengthen main account strategy. Balance (Non-C
Slide 35: Status of Investment in Marketable Securities, etc.
Non-Interest Interest Status of Investment in Marketable Securities, etc.*1 Income Income ◼ Progressively and selectively increase loans and marketable securities to the Ministry of Finance to increase the yield on investment of surplus funds after ensuring liquidity (Dec. 31, 2024, non-consolidated
Slide 36: Non-Interest Income (Non-Consolidated)
Non-Interest Income (Non-Consolidated) Non-Interest Income Interest Income ◼ The number of payments steadily increased, and exchange/settlement commissions, direct debit fees, and debit card commissions all achieved YoY double-digit growth. FY2023 FY2024 Breakdown of Non-Interest Income*1 (JPY bn, n
Slide 37: Sufficient Capital Adequacy with Disciplined Management
Sufficient Capital Adequacy with Disciplined Management ◼ Leveraging capital raised through the public offering at the time of IPO, we actively accumulated investment assets. ◼ Meanwhile, our capital adequacy ratio remained at a sound level. Capital Adequacy Ratio*1 (JPY bn, consolidated) Since Sep.
Slide 38: General and Administrative Expenses (Non-Consolidated)
General and Administrative Expenses (Non-Consolidated) ◼ The business scale expansion boosted our management efficiency, and our G&A Expense Ratio reached 36.7%, improving 6.1pts from FY2023 Q1-Q3. General and Administrative Expenses and G&A Expense Ratio* (Non-Consolidated) *G&A Expense ratio: Gene
Slide 39: Credit Costs (Non-Consolidated)
Credit Costs (Non-Consolidated) ◼ Credit cost ratio remained at a low level, while credit costs rose due to an increase in non-guaranteed personal loans. Credit Costs*1 Credit costs Reversal of credit costs Credit cost ratio *2 （JPY mm, non-consolidated） 159 (148) (657) (1,297) (1,359) (2,102) (0.01
Slide 40: Roadmap to Achieve Higher ROE
Roadmap to Achieve Higher ROE Aiming for Further Business Expansion with Unique Rakuten Ecosystem ROE*1 further increases Non-Interest Income Growth ✓ • Further growth through main account*2 acquisition and cross-selling 16.8% ✓ Enhance Risk/Return Profile • Produce of Group‘s proprietary assets to
Slide 41: Our Dividend Policy
Our Dividend Policy Our Thoughts on Capital and View on the Capital Adequacy Ratio Prioritize further growth over dividends for the near term To achieve the targets in our Medium- to Long-Term Vision, the accumulation of (%) risk assets is intended to control within – Intend to keep capital adequacy
Slide 42: Appendix
4 Appendix 42
Slide 43: Strong Commitment by Experienced Management
Strong Commitment by Experienced Management*1 Mika Matsumoto Kenji Takeuchi Tatsuya Misawa Takuya Mizuno Tamaki Kasuya Masato Tarukado Kosho Ito Executive Manager: General Manager: Executive Manager: Executive Manager: Executive Manager: General Manager: General Manager: • Customer Support • Data In
Slide 44: Disciplined Corporate Governance
Disciplined Corporate Governance*1 3 Outside Directors out of 5 Directors Banking Regulations Hiroshi Mikitani Hiroyuki Nagai Chairman President & CEO Group Arm’s- Synergies Length Eiji Ebinuma Michio Kayano Masatsugu Nagato Outside director Outside director Outside director 3 Outside Auditors out o
Slide 45: Our SDGs Initiatives
Our “SDGs” Initiatives Contributing to a healthy and economically prosperous society through “SDGs” “SDGs” × Gender “SDGs” × Education • Percentage of women in managerial • Host seminars for financial education for positions*1: People students - Reached our initial target of more than 33% by • A mem
Slide 46: Digital Bank Share
Japan – Dawn of Banking Digitalization Japan Cashless Payment Ratio*2 80% 4 Japan Post Bank 20% (aiming to be the global highest level) % Promoted by Japanese Government Digital Bank ~40% 39% Share*1 Mizuho Bank 29% MUFG Bank 22% (deposit balance) 17% … … … SMBC 2020 2023 2025 Long- 17% term Actual
Slide 47: Rakuten Bank's Ability to Lead Digitalization
Rakuten Bank’s Ability to Lead Digitalization ✓ A corporate mindset of specializing in digital and cashless (1) Impact on earnings improvement ✓ No possession of legacy assets (branches/own ATMs) ✓ Utilization of state-of-the-art technology ➢ Service creation with an in-depth understanding of custom
Slide 48: Banking in a Cashless Era
Banking in a Cashless Era ◼ The industry’s widest range of instruments for cashless payment Debit Cards Prepaid Cards Direct Payment for code payment Rakuten Bank Card Service Linkage with Rakuten Card via Direct Debit (Rakuten Card Combined with Cash Card) ✓ Interest on ordinary deposits is more fa
Slide 49: Our Unique Service Offering through One App
Our Unique Service Offering through One App Full-fledged Digital Banking Services Rakuten Ecosystem Deposits / Asset Management Loans Transfer Payment Entertainment Single integrated app comprehensively covering individuals’ everyday life 49
Slide 50: Providing JRE BANK service jointly with JR East Group
Providing JRE BANK service jointly with JR East Group ◼ Realize a new financial service experience by providing benefits that take advantage of the assets (stations, trains, commercial facilities, etc.) and business areas (transportation, distribution and service, real estate, hotels, etc.) of the J
Slide 51: Rakuten International Commercial Bank in Taiwan
Rakuten International Commercial Bank in Taiwan Company Overview Group Structure Company RAKUTEN INTERNATIONAL COMMERCIAL BANK CO., LTD. Name (Joint Venture) Establishment May 18, 2020 Rakuten Card Co., Ltd. IBF Financial Holdings Co., Ltd. 50% 1% 49% Operation Since January 19, 2021 Electronic bank
Slide 52: Scheme for the Liquidation of Rakuten Card's Credit Card Receivables
Non-Interest Interest Scheme for the Liquidation of Rakuten Card’s Credit Card Income Income Receivables (Trust Beneficiary Rights) Rakuten Card Co., Ltd. is one of Japan’s largest credit card companies, with more than 31 million cards issued.* In general, when the holder of a credit card uses their
Slide 53: Number of Accounts, Deposit Balance (Non-Consolidated)
Number of Accounts, Deposit Balance (Non-Consolidated) Number of Accounts (Non-Consolidated) Deposit Balance (Non-Consolidated) (Millions of accounts) (JPY bn) 14,000 18.00 Total 16.48 12,071.8 16.00 15.23 12,000 97.9 14.75 153.1 903.7 10,540.2 Foreign Currency 13.73 88.2 10,319.7 14.00 138.4 94.0 1
Slide 54: Revision of Interest Rates for Yen Ordinary Deposits
Regarding the Revision of Interest Rates for Yen Ordinary Deposits Effective from March 1, 2025 (Announced on February 4, 2025) ※Before tax Before Revision After Revision (September 1, 2024～) (March 1, 2025～) *1 *2 Interest Rates for Yen Ordinary Deposits (Both Individual and Corporate 0.10% per ann
Slide 55: Improved Spreads on the Card Loans (Personal Loans)
Non-Interest Interest Income Income Improved Spreads on the Card Loans (Personal Loans) ◼ Effective yields on Card loans (Personal Loans) comprise two layers. Non-guaranteed balance: yield - ratio of allowance for loan losses = (1) effective yield on non-guaranteed personal loans Balance with extern
Slide 56: Quarterly Consolidated Financial Summary
Quarterly Consolidated Financial Summary FY2023 FY2024 YoY (JPY bn, consolidated) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Ordinary income 32.6 33.2 35.1 36.8 40.8 42.8 48.0 +25.0% +28.7% +36.6% Interest income 19.2 20.3 21.8 23.0 26.1 29.2 34.1 +35.8% +43.5% +56.0% Non-interest income 13.2 12.8 13.1 13.
Slide 57: Financial Summary – Consolidated Balance Sheets
Financial Summary – Consolidated Balance Sheets (JPY bn, consolidated) Mar. 31, 2022 Mar. 31, 2023 Mar. 31, 2024 Dec. 31, 2023 Dec. 31, 2024 Total assets 9,490.6 11,589.5 13,480.4 13,173.0 15,382.1 (incl.) Cash and due from banks 3,649.1 4,050.2 4,791.0 4,563.1 5,202.7 (incl.) Monetary claims bought
Slide 58: Quarterly Non-consolidated Financial Summary
Quarterly Non-consolidated Financial Summary FY2023 FY2024 YoY (JPY bn, consolidated) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Ordinary income 31.7 32.3 34.1 35.8 39.5 41.3 46.3 +24.3% +27.9% +35.7% Interest income 18.7 19.8 21.2 22.3 25.3 28.2 32.9 +34.7% +42.3% +54.7% Non-interest income 12.8 12.4 12.7
Slide 59: Financial Summary – Non-consolidated Balance Sheets
Financial Summary – Non-consolidated Balance Sheets (JPY bn, non-consolidated) Mar. 31, 2022 Mar. 31, 2023 Mar. 31, 2024 Dec. 31, 2023 Dec. 31, 2024 Total assets 9,647.7 11,694.2 13,527.6 13,245.1 15,386.7 (incl.) Cash and due from banks 3,645.1 4,039.7 4,782.3 4,553.9 5,190.7 (incl.) Monetary claim
Slide 60: Accountholder Demographics
Accountholder Demographics By Age By Region By Occupation Hokkaido Under 20s 4% Company Others 4% executive 4% Tohoku 2% Kyushu, 6% Okinawa Unemployed 60s and 20s 10% 4% over 13% Chugoku, Student 14% Shikoku 5% 7% Housewife 7% 50s Kansai Company employee 21% 17% Kanto, (general) 30s Koshinetsu Part-
Slide 61: Progress of Medium- to Long-Term Vision
Progress of Medium- to Long-Term Vision Number of Bank Accounts Ordinary Income CAGR+10.0% （mm, non-consolidated） （JPY bn, consolidated） （Target: >+10%） CAGR +13.1% （Target: >+15%） 200.0 25.0 137.9 15.2 103.3 10.5 FY2020 FY2023 FY2026 FY2020 FY2023 FY2026 Target Target Total Deposit Balance Ordinary
Slide 62: Implementation of Shareholder Benefit Program
Implementation of Shareholder Benefit Program（Announced on August 26, 2024） ◼ Introduced a shareholder benefit program, based on which we also expect an increase in salary receiving accounts, one of the important factors toward achievement of our medium- to long-term vision. Purpose of Shareholder B
Slide 63: Organizational Chart of Rakuten Group
Organizational Chart of Rakuten Group*1 Rakuten Group, Inc. (TSE: 4755) Internet Services business 49.26% FinTech 85.01 %*3 FinTech 100% FinTech 100% Mobile 100% business business business business Rakuten Bank, Rakuten Card Rakuten Rakuten Rakuten Mobile, Other domestic Insurance Ltd. 4.72% Co., Lt
Slide 64: The History of the FinTech Segment Within the Rakuten Group
The History of the FinTech Segment* Within the Rakuten Group September 2004 April 2013 Rakuten fully acquires Rakuten Group rebrands Aozora Card Co., Ltd. AIRIO Life Insurance as (currently known as Rakuten Life Insurance Co., Rakuten Card Co., Ltd.). Ltd. (Life Insurance) June 2005 Rakuten commence
Slide 65: Cancellation of FinTech Reorganization
Cancellation of FinTech Reorganization- Announcement of Changes as of Sep. 30, 2024 ◼ On April 1, 2024, Rakuten Bank and the Rakuten Group signed an MoU to initiate discussions on the reorganization of Rakuten’s entire FinTech business*1 (aiming for the reorganization to take effect in October 2024)
Slide 66: Rakuten Card: Driving the Rakuten FinTech Ecosystem
Rakuten Card: Driving the Rakuten FinTech Ecosystem with a Huge Customer Base CY2022 CY2023 CY2024 *１：Calculated by Rakuten Group, Inc. based on “Ministry of Economy, Trade and Industry, Specified Service Industry Statistics Survey, Credit Card 66
Slide 67: Rakuten Securities: Achieving High Customer Loyalty through Money Bridge
Rakuten Securities: Achieving High Customer Loyalty through “Money Bridge” How Money Bridge Works Huge Presence and Rapid Growth of Money Bridge (non-consolidated) Transaction 5.5mm accounts (YoY +21.5%) Automatic deposit “Money Bridge” deposit balance JPY 6.2tn (YoY +14.0%) makes up 51.7%*2 of Raku
Slide 68: Rakuten Payment: Developing Leading Services in Japan
Rakuten Payment :Developing Leading Services in Japan Centered on Payment and Marketing Service Lineup Cashless payment service (QR Code*3/barcode/touch payment/ Rakuten Payment Revenue*2 Suica payment /Online payment,etc.) (JPY bn) Common point service IC type electronic money Online electronic mon
Slide 69: Disclaimer on opinions and forecasts
The opinions and forecasts stated in this document reflect the Bank's judgment at the time these materials were prepared. The Bank does not guarantee the accuracy of the information contained herein. Please note that actual performance and results may differ significantly due to various factors.