August 6, 2018

Rakuten, Inc.

2

3

Revenue strong growth: +18.5% YoY

Global GTV: +16.4% YoY

Domestic E-Commerce GMS keeping good momentum

Revenue stream of Domestic E-Commerce is diversifying

Strong growth in FinTech:

Revenue +28.2% YoY, Non-GAAP OI +31.5% YoY

Ad revenue growth accelerating

Investment business maintains good momentum

- Gains from investment business: JPY 30.6bn, strong relationships with global ridesharing players

Ongoing investments to massively expand Rakuten Ecosystem

Global brand logo change

4

(IFRS, JPY bn)

Q2/17 Q2/18 YoY

Revenue 228.0 270.3 +18.5%

Non-GAAP Operating Income 31.9 58.4 +83.1%

IFRS Operating Income 28.2 61.6 +118.3%

5

Q2/17 Q2/18 YoY

Domestic E-Commerce

Revenue 95.0 101.5 +6.8%Operating Income 18.4 14.8 -19.1%

Communications & SportsRevenue 22.9 29.8 +30.6%Operating Income -0.3 -0.6 -0.3

Other Internet ServicesRevenue 45.3 57.7 +27.2%Operating Income -3.1 24.6 +27.7

Internet Services SegmentRevenue 163.2 189.0 +15.8%Operaing Income 15.0 38.9 +159.3%

FinTech SegmentRevenue 82.1 105.2 +28.2%Operating Income 18.2 24.0 +31.5%

AdjustmentsRevenue -17.3 -24.0 -6.7Operating Income -1.3 -4.4 -3.1

Consolidated

Revenue 228.0 270.3 +18.5%Non-GAAP Operating Income 31.9 58.4 +83.1%IFRS Operating Income 28.2 61.6 +118.3%

(IFRS, JPY bn)

6

Q2/17

Operating Income

Q2/18

Operating Income

31.9

58.4 +5.7 -3.5 -0.3 -1.0

+30.6

-5.0 (JPY bn)

FinTech

Domestic E-Commerce ・Delivery cost

・SPU cost

・C2C marketing

Communications

and Sports

Other Internet Services

(excl. gains from investment business) ・Costs of logo change of PriceMinister

・Rakuten Marketing reorganization costs

Gains from

Investment

business

Investments for future

growth etc. ・Partnership cost

・NBA broadcasting rights

FinTech ・Rakuten General

Insurance consolidation +2.2

7

8

Platform （MNO and Logistics etc）

Rakuten Ecosystem:

Massive Expansion Digital

contents Others

Ad

business

FinTech

Telecom

Membership

Data Brand

E-Commerce

9

楽天太郎

総保有ポイント

99,999

新着メッセージ 2 通

通常ポイント

楽天ポイント

カード 楽天モバイル

楽天銀行 楽天Edy

楽天トラベル

楽天ペイ 楽天Express 楽天市場

楽天生命 楽天証券

999 期間限定ポイント

99,000

Rakuten Viber

Sales

0

20

40

60

80

100

0 1 2 3 4

楽天市場 楽天ペイ 楽天トラベル

Aug Sep Oct Nov Dec

View Full Report

DASHBOARD

Device Statistic

Android Windows iOS Mac OS Linux

View Full Report

2% 8%

23% 30%

37%

for Biz

…

10

Total Service Usage

Unique Users Cross Use

Rakuten Ecosystem

Membership Value

LTV (Life Time Value)* *LTV of each service

11

Q2/18

Membership Value

JPY

4 trillion

Membership Value Target

JPY 10 trillion

12

One

Delivery

Payment MNO

IDs

Brand

Points

Big

Data

Utilizing big data and Global

Network for Advertising

Business and Investment

FinTech Communications

E-Commerce

13

Transition to

New Group Structure

14

Background

Purpose

Company

Structure

More focus on the B/S management to allocate group assets efficiently

New Group Structure

Further investment in capital intensive businesses (MNO, logistics)

Enhance the expansion of Rakuten Ecosystem leveraging IDs, points and brand

Agile delivery / development of new services, adapting rapidly to the

needs of users (C2C, sharing economy)

Building framework for swift decision-making

To accelerate innovation

15

Rakuten, Inc. Rakuten (Listed company)

Rak

ute

n M

ob

ile N

etw

ork

Raku

ten

Card

Raku

ten

Ban

k

Raku

ten

Secu

rities

Raku

ten

Insu

ran

ce H

D

Overs

eas S

ub

sid

iarie

s e

tc.

Internet Services

FinTech Mobile

Shareholders Shareholders

Current Structure New Structure (Image)

IDs・Points・Data・Brand

Overseas

Subsidiaries etc.

Company split

Commerce

Company

Media &

Sports

Company

16

Q2 Results Announcement

Annual Shareholders Meeting

Effective Date

Aug 6

Mar 2019

Apr 2019

* Subject to approval of government authorities

Resolution of Company-split plan at Board of Directors Feb 2019

17

18

One

Delivery

Payment MNO

ID

Brand

Point

Big

Data

FinTech Communications

E-Commerce

Utilizing big data and Global

Network for Advertising

Business and Investment

19

20

21

22

23

Please watch the video

24

Definition of locations:

Locations with merchant contracts for Rakuten Card, Rakuten Edy, Rakuten Point Card, and/or Rakuten Pay

Stores using Rakuten Pay with multiple service contracts are counted as one

Rakuten Pay, Rakuten Point Card, Rakuten Edy as of Jun/e 2018, Rakuten Card as of July 2018

25

Expanding

Rakuten Pay App

※Under Development

Various payment solutions

P2P money transfer to be implemented

26

Approx.

JPY 600bn*

* JPY 526.3bn CAPEX for 10 years (2018~28) + spectrum transfer cost

27

Nagoya

area

Tokyo

area

Osaka

area

28

Strategy expanding to external advertisers and external inventories

Rakuten Data Marketing (for external advertisers) has continued to receive strong orders

1H/18 Order Amount

+48.9%YoY

[Advertiser]

[Inventory] Internal

(Rakuten Site)

Internal (Ichiba Merchants etc)

External

External (National Brands)

2ndSTEP

(JPY bn)

79*

1stSTEP

Advertising

Revenue

(Joint Venture between Rakuten and Dentsu)

* Revenue includes internal transactions

29

Growth in ad revenue* is accelerating YoY (FY17 +12.6% YoY → FY18 1H +17.8% YoY)

FY2017 FY2018

+19.1%

+13.0%

+26.0%

+16.3%

+11.4%

+19.1%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Jan

Feb

Mar

Ap

r

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Ma

r

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

[YoY: %]

[Average YoY]

+12.6%

[Average YoY]

+17.8%

Rakuten Ad Revenue YoY (As of June)

* Revenue includes internal transactions

30

[Inventory]

[Advertiser]

Internal

(Ichiba Merchants etc)

1st step

2nd step

Internal

(Rakuten Site)

External (National Brands)

External

Current

Advertising Revenue

* Revenue includes internal transactions

31

32

33

Q2/17 Q2/18 YoY

Revenue 228.0 270.3 +18.5%

Non-GAAP Operating Income 31.9 58.4 +83.1%

Non-GAAP Operating Income(excluding gains from investment business in Q2/18)

31.9 27.8 -12.9%

IFRS Operating Income 28.2 61.6 +118.3%

IFRS Operating Income(excluding gains from investment business in Q2/18)

28.2 31.0 +9.8%

(IFRS, JPY bn)

34

Q2/17 Q2/18 YoY

Domestic E-Commerce

Revenue 95.0 101.5 +6.8%Operating Income 18.4 14.8 -19.1%

Communications & SportsRevenue 22.9 29.8 +30.6%Operating Income -0.3 -0.6 -0.3

Other Internet ServicesRevenue 45.3 57.7 +27.2%Operating Income -3.1 24.6 +27.7

Internet Services SegmentRevenue 163.2 189.0 +15.8%Operaing Income 15.0 38.9 +159.3%

FinTech SegmentRevenue 82.1 105.2 +28.2%Operating Income 18.2 24.0 +31.5%

AdjustmentsRevenue -17.3 -24.0 -6.7Operating Income -1.3 -4.4 -3.1

Consolidated

Revenue 228.0 270.3 +18.5%Non-GAAP Operating Income 31.9 58.4 +83.1%IFRS Operating Income 28.2 61.6 +118.3%

(IFRS, JPY bn)

35

Q2/17 Q2/18 YoY

Non-GAAP Operating Income 31.9 58.4 +83.1%

Amortization of Intangible Assets (PPA) -2.0 -2.7 -0.7

Stock Based Compensation -1.7 -1.8 -0.1

One-off items 0.0 7.6 +7.6

IFRS Operating Income 28.2 61.6 +118.3%

(IFRS, JPY bn)

36

+16.4％ YoY

* Global Gross Transaction Value = Domestic E-Commerce GMS + Credit Card GTV + Edy GTV + Rakuten Point Card GTV + Overseas E-Commerce GMS + Ebates GMS

+ Digital Contents GTV + Rakuten Marketing GTV * Includes intercompany transactions for settlement and affiliate services

(JPY tn)

37

38

(JPY bn)

Revenue YoYOperating

IncomeYoY

Card 45.3 +13.8% 8.6 +16.1%

Bank 20.4 +9.6% 6.5 +16.3%

Securities 14.4 +18.4% 5.3 +16.8%

Life Insurance 7.2 -10.8% 0.9 +22.2%

General Insurance 14.1 - 2.2 -

Others 3.8 +12.9% 0.5 +0.5

FinTech Total 105.2 +28.2% 24.0 +31.5%

39

（JPY mm）

Operating Income +16.1% YoY from growth in shopping transactions and revolving balances

40

1,491.0 1,519.6

1,701.3 1,690.71,793.4

Q2/17 Q3/17 Q4/17 Q1/18 Q2/18

(JPY bn)

Card Shopping Transaction Value

+20.3% YoY

396.2407.9

424.8447.4

470.9

Q2/17 Q3/17 Q4/17 Q1/18 Q2/18

(JPY bn)

Shopping Revolving Balance

+18.9% YoY

* Calculated on a managerial accounting basis, using different definitions from data in the Appendix.

Detailed credit card data is shown in the Appendix. Revolving balance is calculated on a principal basis.

41

* Calculated on a managerial accounting basis, using different definitions from data in the Appendix.

Detailed credit card data is shown in the Appendix. Revolving balance is calculated on a principal basis.

579.3

42

Operating Income +16.3% YoY due to increased growth of loan receivable balances

（JPY mm）

43

*1: Based on IFRS which includes derivatives in structured term deposits. *2: Other deposits include deposits in foreign currencies and others.

44

45

Boost in both revenue and operating income resulting from strong growth in domestic

stock brokerage trading

（JPY mm）

46

Prompt, unified decision making, reinforcing governance

Providing the most optimal insurance service

47

(JPY mm) (JPY mm) +22.3% YoY

Operating Income

-10.8% YoY Revenue

Termination of reinsurance policies caused a decline in revenue, however insurance

premiums continue to show strong growth, resulting in OI +22.3% YoY

48

New Business ANP +32.1% YoY, driven by continuous and effective TV ads

New Business ANP in direct marketing channels*1 +55.1% YoY

1: Internet & mail-order *2: Annualized insurance premiums for new policies in Q2/18, excluding one-year cancer insurance for eligible Rakuten members which started from Q4/14. *3: Annualized insurance premiums for new policies through direct marketing channels in Q2/18, excluding one-year cancer insurance for eligible Rakuten members

which started from Q4/14.

Q2/18

New Business

ANP Growth*2

Q2/18

Direct Marketing*1

New Business ANP Growth*3

+32.1% YoY +55.1% YoY

49

50

+11.1% YoY

(JPY bn)

*1: Domestic E-Commerce GMS includes consumption tax. Consumption tax not included in GMS for businesses not required to pay consumption tax.

GMS comprises Ichiba, Travel GTV on checkout basis, Books, Golf, Ticket, Brand Avenue, Dream businesses, Rakoo, Beauty, Mart, Delivery,

Rakuten Direct, Car Life, Rakuten Pay, Coupon, Rakuma, Rakuten Delivery Premium, Rebates, Raxy etc. *2: Definition of GMS for first party businesses was revised mainly upon the merger between Soukai Drug and Kenko.com. This has resulted in retroactive adjustments to

Domestic E-Commerce GMS

51

* Domestic E-Commerce = Ichiba, Travel, Books, Golf, Ticket, Brand Avenue, Dream businesses, Rakoo, Beauty, Mart, Delivery, Rakuten Direct, Logistics

Car Life, Rakuten Pay, Coupon, Rakuma, Rakuten Delivery Premium, etc.

（JPY mm）

52

Q2/18 GMS

+57.6% YoY

Fashion E-Commerce, Rakuten Brand Avenue, showed strong growth due to successful marketing

53

Q2/18 GMS

+32.6% YoY

Rakuten Books showed strong growth due to SPU program

Rakuten Books

54

61.5% 61.2%

62.3% 61.7%

65.0% 64.6%

65.9%

64.2%

68.3% 67.6%

70.6%

71.8% 72.1% 70.7%

Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18

SPU started

* Ratio of the number of acquisitions from existing Rakuten members among new user acquisitions number of the each service

55

Strong growth momentum despite starting to charge 3.5% commission fee

Engaging in aggressive marketing and leveraging Rakuten group services to accelerate growth

TV commercial Change funds in escrow to Rakuten Cash

56

57

New Super Hodai and 24GB plan started on June 14

Commencement of Plus Wari campaign, allowing up to a JPY 10,000 discount on devices, plus no initial fees and 3 months free usage for second

line

From July 1, Unlimited Calling Plan upgraded from 5 to 10 minutes

Super Hodai Plus Wari

⇒～）

58

Opened 59 shops in Q2/18 (5 partner shops, 54 shop-in-shops)

Total 277 shops (8 direct shops, 61 partner shops, 208 shop-in-shops)

as July 19

59

60

61

Our Mission Objectives

Realize Global Innovation Company

through Investments

1. Strong Financial Returns

Invest in truly innovative companies

that will shape the future

Contribute towards creating the new

generation of “Unicorns”

2. Synergy with Rakuten

Ecosystem

Contribute to “Expansion” and

“Evolution” of Rakuten Ecosystem

Pursue strong financial returns and “Expansion” & “Evolution” of Rakuten Ecosystem

62

Synergy

1. Strong Financial Return

2. Synergy with

Rakuten Ecosystem

Contribute to the “Expansion” and

“Evolution” of Rakuten Ecosystem

63

Leading Corporate Venture capital

AUM: USD 3B

Global investment with 4 areas

1. Top Tier Corporate

Venture Capital

Efficient funding

Active Portfolio management

2. Create

“Unicorns”

Entrepreneurship

Rakuten’s Brand,

Membership & Data

Open Innovation

3. New Frontier

AI / Deep learning

Blockchain

Sharing Economy

Robotics

Healthcare, etc

64

65

(JPY bn)

*1: Rakuten, Inc., Rakuten Bank, Ltd., Rakuten Card Co., Ltd., Rakuten Securities, Inc., Rakuten Life Insurance Co., Ltd., and Rakuten General Insurance Co., Ltd. are based on

IFRS non-consolidated balance sheets.

*2: Bonds and borrowings = Corporate bonds + CP + Borrowings.

66

Operating CF

(Excl. Tax)

Change in

assets &

liabilities

Increase in cash and

cash equivalents +45.5

Decrease in cash and

cash equivalents -14.9

Balance of cash

Dec 31, 2017

Balance of cash

Jun 30, 2018 Non-Financial Businesses Financial Businesses

Tax

Change in

investment

securities

Other

investing CF

Profit(adjusted)

Operating Investing Financing Investing

Financing Operating

* “M&A and investments” includes “Increase and Decrease in restricted deposits”, “Purchase of investment securities” “Acquisition of investments in associates and

joint ventures” and “Proceeds from sales and redemption of investment securities” of Non-Financial activities in addition to “Acquisition of subsidiaries”

(JPY bn)

Increase in cash and

cash equivalents

+6.2

M&A,

investments* Common

Tax

67

Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 YoY

Expenses related to doubtful accounts 7,031 7,499 7,377 7,983 8,078 14.90%

Ratio of expenses related to doubtful accounts*1 2.00% 2.08% 1.93% 1.99% 1.98% －

(JPY mm)

*1: Ratio of expenses related to doubtful accounts = (Expenses related to doubtful accounts) / (average of total balance of loan receivables at beginning and end of the period) × 4

*2: Balance of Rakuten Bank Super Loans guaranteed by Rakuten Card *3: Including allowance for credit guarantees from Q1/18 *4: Write-off for bad debt includes loss on transfer of loan receivables

Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 YoY

Rakuten Card 1,050,360 1,077,372 1,222,083 1,217,549 1,263,110 20.25%

Stage 1 (Normal) 986,137 1,011,882 1,151,449 1,148,457 1,196,212 21.30%

Stage 2 (1-2 months delinquent) 7,640 8,255 10,613 11,541 8,876 16.18%

Stage 3 (3 months-and-over-delinquent/Restructured Loans) 56,583 57,235 60,022 57,551 58,023 2.54%

374,897 380,470 379,549 388,818 387,696 3.41%

Stage 1 (Normal/Credit gurantees*2

) 343,127 347,481 346,454 352,702 350,442 2.13%

Stage 2 (30 days-and-over-delinquent/Credit gurantees*2

) 195 179 128 161 175 -10.51%

Stage 3 (Foreclosed credit guarantees) 31,575 32,810 32,967 35,954 37,079 17.43%

Others 1,692 1,656 1,623 1,563 1,504 -11.13%

Total balance of loan receivables 1,426,950 1,459,498 1,603,255 1,607,929 1,652,310 15.79%

Allowance for doubtful accounts 35,975 35,667 34,955 86,560 86,412 140.20%

Write-off for bad debt*4 6,609 7,848 8,165 8,395 8,222 24.40%

Rakuten Bank Super Loans

*3

* Mobile GMS Ratio = Ichiba mobile GMS / Total Ichiba GMS (includes feature phones, smartphones, and tablets)

66.6% Up 3.3 points YoY

Rakuten Card share of Ichiba GMS is consistently growing

70

* Includes GMS of Cartera acquired in Q1/17 and ShopStyle acquired in Q2/2017

+8.1% YoY

71

* Includes Cartera, ShopStyle, and Rebates.

+46.6% YoY

(USD mm)

72

Revenue

+1.9% YoY

Operating Income

USD -8.1 mm YoY

(USD mm)

73

* Unique IDs: Unique phone numbers excluding deactivations

74

* Telco: Viber Out, In. Content: Service messages, ads, stickers and others

Monetization accelerating on strong growth in both Telco (Viber In/Out) and content revenue

Total Revenue

+69.1% YoY