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FY2014 Second Quarter
Consolidated Financial Results
August 4, 2014
Rakuten, Inc. This presentation includes forward-looking statements relating to our future plans, targets, objectives, expectations and intentions.
The forward-looking statements reflect management’s current assumptions and expectations of future events, and accordingly, they are
inherently susceptible to uncertainties and changes in circumstances and are not guarantees of future performance. Actual results may
differ materially, for a wide range of possible reasons, including general industry and market conditions and general international
economic conditions. In light of the many risks and uncertainties, you are advised not to put undue reliance on these statements. The
management targets included in this presentation are not projections, and do not represent management’s current estimates of future
performance. Rather, they represent targets that management strive to achieve through the successful implementation of the
Company’s business strategies. The Company may be unsuccessful in implementing its business strategies, and management may fail
to achieve its targets. The Company is under no obligation – and expressly disclaims any such obligation – to update or alter its forward-
looking statements. Names of companies, products, and services and such that appear in this material are trademarks or registered
marks of their respective companies.
2
23.4
14.8
Big Data: Predicting Composite Index Analyzing Rakuten Ichiba’s sales data, we can predict the Cabinet Office Composite
Index 2 months before government announcement.
Composite Index
Prediction (Training fit)
Prediction (Test fit)
3
23.4
14.8
1. Strategic actions for growth
2. Profit-focused management
Highlights
4
23.4
14.8 Strategic Actions for Growth 1
5
23.4
14.8
Digital
Content
Finance
E-
commerce
R-members
Viber
Rakuten Membership
+
Digital
Content &
Games
Finance
E-Commerce
Rakuten Ecosystem
6
23.4
14.8
Viber Number of Registrations
7
23.4
14.8
Viber Unique IDs
* Unique IDs: Unique phone numbers excluding deactivations
8
23.4
14.8
Rapid increase in Viber users
Registrations (as of July 31): 608mm
Unique IDs (as of July 31): 400mm
Working towards integration of Rakuten and
Viber ID numbers
Viber platform will be the core of Rakuten
Viber Update
Jeremy
7/23
9
23.4
14.8 Profit-focused Management 2
10
23.4
14.8
Achieved earlier than expected
Cost-cut activities in day-to-day operations (KKP)
• Replaced outsourcing with in-house operation
• Shifted to direct hiring
• Optimization of business travel expenses
Strategic review of operations
‘Shikumi-ka’ of projects leading to constant
efficiency improvements
Achieved cost cut target: JPY 1bn per month
Target is moved to next slide
Project V4 7/23 Ohno
Update
11
23.4
14.8
1. Operational improvement of existing
businesses Project V4: Cost optimization (KKP)
Cost control leading to improved bottom-line at
Kobo
Business model changes (Wuaki, China travel)
2. Further acceleration Global IT platform for e-commerce (RMSg)
Know-how transfer
8/1
s
12
23.4
14.8
Shrinking Other Internet Services Loss
Operating Income:
+4.7bn QoQ
OI excl. One-off Items:
+2.5bn QoQ
7/24
sisi
Operating Income
excl. One-off Items
One-off Items
13
23.4
14.8
New management team showing results Rapid ongoing content growth
De-risk device inventories
Right-sizing
Completed Sony migration to Kobo North America, Europe, and Australia
New initiatives Continued focus on Kobo Writing Life (self-publishing)
Education, more languages
Kobo: Strategic Initiatives Jeremy updated
(based on Murota-san)
7/22
14
23.4
14.8
RMSg (Rakuten Merchant Server Global):
Global E-Commerce IT Platform for Merchants
As is (10 Platforms)
<As is> <To be>
RMS
Japan
Original Platform
International RMS
• Taiwan
• UK
• Deutschland
• US
• France
• Austria
• Thailand
• Brazil
RMS Global • Malaysia
• Indonesia
• Singapore
• Spain
RMS
RMS
Japan
RMS Global
• Malaysia
• Indonesia
• Singapore
• Spain
• UK
• Deutschland
• US
• France
• Austria
• Thailand
• Brazil
• Taiwan
To be
7/23
Sisi
Original Platform (8)
RMS
RMS Japan
RMS Global
RMS Global (1)
RMS Japan (1)
15
23.4
14.8
Implementation of Rakuten’s global
IT platform (RMSg*) in progress and
set to improve cost efficiency
Strong marketplace GMS growth in US,
France, Spain, and Asia-Pacific
* Rakuten Merchant System global
Overseas E-Commerce Business 7/23
Jeremy
16
23.4
14.8
Faster Growth at RMSg Countries
GMS Growth YoY
Overseas
Marketplaces*
+47.4% (FX adjusted +32.5%)
Marketplaces at
RMSg Countries +639.5%
(FX adjusted +703.1%)
* Excluding Play.com under site transition
17
23.4
14.8
Overseas Marketplace GMS growth of RMSg-introduced countries:
+639.5% YoY (+703.1% YoY forex adjusted)
* RMSg-introduced Marketplace = Rakuten Belanja Online + Rakuten Malaysia + Rakuten Spain + Rakuten Singapore
7/23
Jeremy
RMSg-Introduced Countries: Overseas Marketplace GMS
7/31
大野修正
7/31
大野再鑑
18
23.4
14.8
Marketplace GMS growth excluding Play.com which is under site transition:
+47.4% YoY (+32.5% YoY forex adjusted)
7/23
Jeremy
Marketplace GMS Overseas Companies
7/31
大野修正
7/31
大野再鑑
*1: Marketplace = Taiwan Rakuten Ichiba + Tarad Premium Mall + Rakuten.com Shopping + PriceMinister + Rakuten Belanja Online + Rakuten
Deutschland + Rakuten Brasil + Rakuten Malaysia + Rakuten Spain + Rakuten Austria + Rakuten Singapore
19
23.4
14.8
Rakuten Super Sale
Malaysia Rakuten.com Shopping
Rakuten Deutschland
20
23.4
14.8
EU Asia America
FY2012 9 times: 8 countries / region
FY2013 16 times: 12 countries / region
Global EXPO
21
23.4
14.8 3 FY2014/Q2 Financial Results
• Rakuten started to report quarterly financial results based on IFRS from Q1/13, versus
J-GAAP up to Q4/12.
• Numbers for FY2012 in this presentation are retrospectively stated based on IFRS basis.
• Numbers are rounded to the nearest million, etc.
22
23.4
14.8
Domestic GTV* growth: +21.3% YoY
Domestic e-commerce GMS* growth:
Q2 +8.1% YoY, H1 +19.5% YoY
Credit Card profit growth: +54.5% YoY
Other Internet Services loss is shrinking
Q2/14 Financial Highlights Yuko
7/22
数字要確認
* Domestic E-Commerce GMS and Travel gross booking transaction value are retrospectively adjusted to include consumption tax for a part of
businesses which previously excluded consumption tax
23
23.4
14.8
(JPY bn, IFRS)
Q2/14 Results Summary 7/24
青木更新
7/24
sisi （one-off除きました。）
7/28
青木更新
8/1
大野更新
Q2/13 Q2/14 YoY
楽天証券 売上収益 13,173 9,213 -30.1%
楽天証券 営業利益 6,959 3,713 -46.6%
連結 売上収益 127,732 138,339 8.3%
連結 営業利益 24,665 22,213 -9.9%
連結 売上収益 証券除き 114,559 129,126 12.7%
連結 営業利益 証券除き 17,706 18,500 4.5%
楽天トラベル 会計エラー 0 320
連結 営業利益 証券・トラベルエラー除き 17,706 18,820 6.3%
8/1
Sisi更新
* Adjusted for impact of accounting error in Q2/14 mainly related to coupons at Travel business
Q2/13 Q2/14 YoY
Revenue 127.7 138.3 +8.3%
Operating Income 24.7 22.2 -9.9%
EBITDA 31.5 29.7 -5.6%
Net Income Attributable to
Owners of the Parent Company11.4 7.0 -38.7%
Revenue 114.6 129.1 +12.7%
Operating Income 17.7 18.8 +6.3%
Excluding Securities results and accounting error impact at Travel*
24
23.4
14.8
(JPY bn, IFRS)
Q2/14 Operating Income Breakdown
*1: Accounting Error Impace at Travel: JPY -0.4bn
*2: Forex impact on OI at major subsidiaries: JPY -1.5bn YoY, same FX rate applied for Q1/13 and Q1/14
*3: Inventory write-off at Kobo: Q2/13 JPY 0.5 bn, Q2/14 JPY1.0bn
7/24
青木更新
7/24
猪倉更新
7/28
青木更新
Q2/13 Q2/14 YoYRakuten Ichiba and Rakuten Travel
Revenue 41.4 44.3 +6.9%
Operating Income 20.1 21.2 +5.4%
Excluding Accounting Error Impact at Travel* 20.1 21.5 +7.0%
Other Internet Services
Revenue 31.8 36.8 +15.5%
Operating Income -8.3 -8.5 -
Internet Finance Segment
Revenue 51.7 56.8 +9.8%
Operating Income 11.5 9.5 -17.6%
Others Segment
Revenue 9.4 11.7 +25.2%
Operating Income 1.8 0.4 -76.3%
Adjustments
Revenue -6.6 -11.2 -
Operating Income -0.5 -0.3 -
Consolidated
Revenue 127.7 138.3 +8.3%
Operating Income 24.7 22.2 -9.9%
* Adjusted for impact of accounting error in Q2/14 mainly related to coupons at Travel business
25
23.4
14.8
Q2/14 EBITDA Breakdown
*1: Accounting Error Impace at Travel: JPY -0.4bn
*2: Forex impact on OI at major subsidiaries: JPY -1.5bn YoY, same FX rate applied for Q1/13 and Q1/14
*3: Inventory write-off at Kobo: Q2/13 JPY 0.5 bn, Q2/14 JPY1.0bn
7/24
青木更新 (JPY bn, IFRS)
7/24
猪倉更新
7/28
青木更新
Q2/13 Q2/14 YoYRakuten Ichiba and Rakuten Travel
Revenue 41.4 44.3 +6.9%
EBITDA 21.0 22.1 +5.4%
Excluding Accounting Error Impact at Travel* 21.0 22.4 +6.9%
Other Internet Services
Revenue 31.8 36.8 +15.5%
EBITDA -5.3 -5.1 -
Internet Finance Segment
Revenue 51.7 56.8 +9.8%
EBITDA 13.7 12.3 -10.6%
Others Segment
Revenue 9.4 11.7 +25.2%
EBITDA 2.3 1.2 -49.2%
Adjustments
Revenue -6.6 -11.2 -
EBITDA -0.2 -0.7 -
Consolidated
Revenue 127.7 138.3 +8.3%
EBITDA 31.5 29.7 -5.6%
* Adjusted for impact of accounting error in Q2/14 mainly related to coupons at Travel business
26
23.4
14.8
*1: Edy Transaction Value = Amount settled by E-Money “Rakuten Edy” (including mobile and cards)
*2: Credit Card Shopping Transaction Value = Shopping Transaction Value of credit cards (including Rakuten group service use)
*3: Travel gross booking transaction value is before cancellation and retrospectively adjusted to include consumption tax
*4: Domestic E-Commerce GMS are retrospectively adjusted to include consumption tax for a part of businesses which previously excluded
consumption tax.
Domestic Gross Transaction Value 7/24
青木更新
7/31
Sisi
*1: Edy Transaction Value = Amount settled by E-Money “Rakuten Edy” (including mobile and cards)
*2: Credit Card Shopping Transaction Value = Shopping Transaction Value of credit cards (including Rakuten group service use)
*3: Travel (gross booking before cancellations, retroactively adjusted to including tax) = Domestic / international accommodation bookings, International
air tickets, Domestic / international dynamic packages, bus services, rent-a-car, pet hotel services
*4: Domestic E-Commerce (retroactively adjusted to including tax) = Ichiba, Auction, Package Media, Golf, Business, Download, Tickets, Internet
Supermarket, Check Out, Off-track betting, toto, Showtime, Media rental, Dining, Salon, Mart, Kenko.com, Energy, Smart pay, Stylife
Travel gross booking transaction value is
before cancellation and retroactively adjusted to include consumption tax.
27
23.4
14.8
* Purchasing ratio of Rakuten Members who have utilized two or more Rakuten services during the past 12 months of the listed month.
Applicable services are limited to those which can earn Rakuten Super Points.
青木
7/28 Advancing Cross-use Ratio*
7/30
大野再鑑
28
23.4
14.8 4 Internet Finance
29
23.4
14.8
Expanded operating income growth at both Card and Bank in Q2
Strong Profit Growth at Card and Bank 大野
更新
7/29
4.0
4.4
5.0
6.2 6.0
6.3
Credit Card + Bank
+42.7% YoY
大野
更新
7/31
Total
Sisi
8/2
* Operating income of Rakuten Bank in Q1/13 are adjusted for transfer gain (JPY1.5bn) of investment trust business to Rakuten Securities.
Rakuten Bank recognizes transfer gain as extraordinary profit under J-GAAP, while consolidated Rakuten group eliminates it in “Adjustments” as
group transaction
*
30
23.4
14.8
Operating income +54.5% YoY thanks to active card shopping transaction value
*1: Reversal of earthquake disaster reserve (decrease in expense): Q3/12 JPY 249 mm, Q4/12 JPY 340 mm
*2: Q3/13 JPY102 mm additional provision to reserve for retirement benefits due to the termination of the plan (increase in expense)
※速報値
青木更新
7/22
*1 *1
*2
Rakuten Card Results
大野コメント
更新
7/23
31
23.4
14.8
Operating income base has been raised to a new level
* Q3/13 JPY102 mm additional provision to reserve for retirement benefits due to the termination of the plan (increase in expense)
Rakuten Card OI & Margin growth 大野更新
7/29
*
大野更新
軸・範囲7/30
Operating Income
OI Margin
Sisi
8/2
32
23.4
14.8
* Managerial accounting basis and using different definition from Appendix. Total credit card data are shown in Appendix
7/22
大野更新
Rakuten Card Shopping Transaction Value
and Shopping Revolving Balance*
33
23.4
14.8
Operating Income +23.9% YoY, thanks to Rakuten Bank Super Loans growth
* Revenue and Operating income in Q1/13 are adjusted for transfer gain (JPY1.5bn) of investment trust business to Rakuten Securities.
Rakuten Bank recognizes transfer gain as extraordinary profit under J-GAAP, while consolidated Rakuten group eliminates it in “Adjustments” as
group transaction
※速報値
青木
7/22
Rakuten Bank Results
*
*
コメント更新
大野
7/23
34
23.4
14.8
* Loan receivables and loan customers are total of Rakuten Bank and credit guarantees of Rakuten Card Co., Ltd
Achieved high growth of loan receivables (+26.7% YoY)
7/22
大野更新
Rakuten Bank Super Loans
35
23.4
14.8
Deposits staying over JPY 1 trillion
* Other deposits include deposits in foreign currencies and others
7/22
大野更新 Rakuten Bank Deposits
36
23.4
14.8
※速報値
青木
7/22
Rakuten Securities Results
コメント更新
大野
7/23
37
23.4
14.8
Net asset balance of investment trusts close to JPY 400bn, hit a record high
7/23
大野更新
Rakuten Securities
Investment Trust Asset Balance
38
23.4
14.8
7/23
大野更新
Rakuten Securities
Stock Brokerage Trading Value
39
23.4
14.8
* Rakuten Life Insurance Co., Ltd. was consolidated from the end of October, 2012
7/23
大野更新
Rakuten Life Insurance
Life Insurance Contracts (excl. mutual aid association)
40
23.4
14.8 5 Internet Services
41
23.4
14.8
*1: Adjusted for reversal of point allowance due to the change of consumption tax rate
*2: Stylife (1st Party Business) was consolidated from Q2/13
OI growth: +5.8% YoY
OI margin excluding first party: 54.1%
*1
Rakuten Ichiba Results StylifeとFine Tradingを
除いた場合
7/31
Sisi
8/2
Sisi
42
23.4
14.8
Domestic E-Commerce GMS: Q2 +8.1% YoY
Domestic E-Commerce GMS 税込GMS
7/30
Sisi
7/31
Sisi
注記要確認
特にEC→
* Domestic E-Commerce GMS are retrospectively adjusted to include consumption tax for a part of businesses which previously excluded
consumption tax . Domestic E-commerce= Ichiba, Package Media, Auction, Golf, Business, Download, Tickets, Internet Supermarket, Check Out,
Off-track betting, toto, Showtime, Media rental, Dining, Salon, Mart, Kenko.com, Energy, Smart pay and Stylife
43
23.4
14.8
Domestic
E-Commerce GMS
Half-Yearly Domestic E-Commerce GMS
YoY Growth
税込GMS
7/30
Sisi
7/31
Sisi
* Domestic E-Commerce GMS are retrospectively adjusted to include consumption tax for parts of some businesses which previously excluded
consumption tax .
44
23.4
14.8
GMS Growth Trends after Tax Increase
Product Category Jun/14 GMS
YoY Growth
Faster
growth
Package Media (Rakuten Books) +33%
Medical goods +17%
Sweets +16%
Flowers / Gardening / DIY +15%
TVs / Audio / Cameras +10%
Slower
recovery
Cars and car goods -9%
Watches -8%
Cosmetics -5%
Bags / Luxury brands -4%
Furniture / Interior accessories -0%
45
23.4
14.8
* Unique Buyers: Number of buyers sorted by e-mail address with purchasing records during the listed 3 month period
Rakuten Ichiba
Unique Buyers* and Transactions
46
23.4
14.8
E-commerce through mobile devices increasing penetration
Ichiba Mobile & Tablet GMS Expanding
7/30
大野再鑑
税込GMS
7/31
Sisi (ｸﾞﾗﾌのみ）
47
23.4
14.8
Domestic E-Commerce GMS*1
Per Ichiba Merchant*2
*2: Number of merchants is average of two most recent half year ends
税込GMS
7/30
Sisi
7/31
Sisi
*1: Domestic E-Commerce GMS are retrospectively adjusted to include consumption tax for a part of businesses which previously excluded
consumption tax
48
23.4
14.8
Rakuten Ichiba: Number of Merchants Jeremy footnote
7/30
7/30
大野再鑑
Jun/12 Jun/13 Jun/14
Number of
Merchants39,809 41,628 41,817
49
23.4
14.8
7/22
Aoki
（グラフのみ）
For attractive and safe shopping mall for users and merchants, focusing on
nurturing merchants who chose Standard/Mega shop plans
Distribution of Merchant Plans
* Rakuten Ichiba’s main merchant plans are below • Ganbare Plan (Monthly fee: JPY 19,500, Commission on GMS: 3.5-6.5%, Listable items: Up to 5,000 items)
• Standard Plan (Monthly fee: JPY 50,000, Commission on GMS: 2.0-4.0%, Listable items: Up to 20,000 items)
• Mega Shop Plan (Monthly fee: JPY 100,000, Commission on GMS: 2.0-4.0%, Listable items: No limit)
Smaller-sized merchants typically choose Ganbare plan. Larger-sized merchants typically choose Standard or Mega plans.
7/30
Sisi
（グラフのみ）
50
23.4
14.8
*1: FY2012 revenue and operating income: Adjusted for correction of costs recorded in Q4/12 regarding dynamic package transactions
*2: Operating Income in Q1/14 : Adjusted for impairment loss of goodwill and intangible assets of Etpass (China)
*3: Operating Income in Q2/14 : Adjusted for impact of accounting error mainly related to coupons
Operating Income excluding accounting error: +15.8% YoY
※速報値
青木
7/24
*1
*1
*1
*1
*1
*1
*2
Rakuten Travel Results
*3
7/31
Sisi
51
23.4
14.8
* Travel gross booking transaction value is before cancellation and retrospectively adjusted to include consumption tax.
Travel GTV = Transactions of Domestic / International accommodation booking, International air tickets, Domestic / International Dynamic
Package, Bus, Rent-a-car and pet hotel services
Gross bookings: +10.3% YoY
7/24
青木更新
Travel Business
Gross Booking Transaction Value
7/31
Sisi
52
23.4
14.8
Travel : Internal Control Improvement
Since recording accounting error in 2012, Travel business
has continued thorough review of accounting processes
• Necessary corrections of accounting errors have been done
• Clarifying challenges and executing initiatives
(Challenges: appropriate design of accounting processes at launch of
new services, human resources and sufficiency of IT systems)
Initiatives • Tighter third-party audit and internal control checks
• Strengthening workforce at accounting department, conducting
stricter accounting scrutiny and thoroughly advising on start-ups by
accounting dept.
• Enhancing administrative functions at Travel Business and
developing stronger IT systems
53
23.4
14.8
Viki Monthly Active Users Jeremy update
7/22
54
23.4
14.8
Jeremy 7/30 Kobo Registered Users
* Kobo Inc. was consolidated from Q1/12
Kobo registered users as of June 2014: +38.8% YoY
55
23.4
14.8
Jeremy 7/23 Kobo Quarterly Content Revenue Growth
Kobo’s global content revenue: +32.9% YoY in Q2
56
23.4
14.8 6 Others Segment
⁃ Telecommunications
⁃ Professional Sports
57
23.4
14.8
Fusion
Communications Number of “Rakuten Broadband LTE”
users accelerated (+88.6% YoY)
Operating Income: JPY 604 mm*,
in stable condition
Rakuten Baseball
Annual season tickets sales
(excl. wholesale) reached a record high
Sponsors and goods sales staying in
good shape
Average attendance per home game in
2014 season up to end of June +23% YoY
* Managerial accounting base (IFRS)
Jeremy 7/23
Jeremy 7/23
Telecom and Pro Sports Highlights
Jeremy 7/23
Wholesale
確認中8/3
58
23.4
14.8
1. Strategic actions for growth
2. Profit-focused management
Highlights
59
23.4
14.8 7 FY2015 Topics
60
23.4
14.8
Rakuten Card: Profit Impact due to IFRS 15
Rakuten Card plans to change customer acquisition costs accounting
according to IFRS 15*1
• Current : Expenses when incurred
• FY2015- : Capitalized and amortized over the period
to be recovered
Estimated impact based on past data
• Estimated profit increase*2: about JPY 4bn per year
*1: Direct costs relating to obtaining contracts under IFRS 15, “Revenue from Contracts with Customers” was published in May 2014
*2: Impact is net result and retroactively calculated based on FY2012 data. Actual results may vary when IFRS 15 will be adopted from FY2015.
61
23.4
14.8
Moving to New Office
Rakuten Group Tokyo head office will be relocated in 2015
Expected one-time impact on P/L
Estimated cost increase: about JPY 4bn
62
23.4
14.8
⁃ Financial Condition
⁃ Other Information
Appendix
63
23.4
14.8 Financial Condition
64
23.4
14.8
Rakuten Group
(Consolidated)
*1: Rakuten, Inc. , Rakuten Bank, Ltd. Rakuten Card Co., Ltd., Rakuten Securities, Inc. and Rakuten Life Insurance Co., Ltd are IFRS based
non-consolidated balance sheets
*2: Debt = Corporate bonds + CP + Borrowings
Rakuten
Securities, Inc.
Rakuten Card
Co., Ltd. Rakuten Bank, Ltd. Rakuten, Inc.
Rakuten Life
Insurance Co.,Ltd
青木
7/28
Rakuten Group : Balance Sheets
(As of June 30, 2014, JPY bn)
青木
8/1
65
23.4
14.8
*1: Debt from outside financial institutions = Corporate Bonds + CP + Borrowings
*2: Debt subleased from Rakuten, Inc to Rakuten Card Co., Ltd. is part of the debt of Rakuten Card.
Debt from Outside Financial Institutions*1 7/22
Sisi
66
23.4
14.8
Operating CF
(Exc. Tax)
Tax
Change in
assets &
liabilities
Increase of cash and cash
equivalents JPY73.3bn
Increase of cash and cash
equivalents JPY28.3bn
Operating Investing
Financing
Balance of cash
Dec 31, 2013
Balance of cash
Jun 30, 2014 Non-Financial Businesses Financial Businesses
Tax
Investing Financing
M&A
and
investments
Common
Change in
investment securities
Other
investing CF
Acquisition of
Viber etc.
(JPY bn)
Profit (adjusted)
Operating
Breakdown of Cash Flows: Jan – Jun, 2014 7/31
Sisi
8/1
片山再鑑
67
23.4
14.8
* Breakdown between financial and non-financial businesses are based on internal estimation and not reviewed by independent auditors.
(JPY bn)
Breakdown of Cash Flows by Financial Businesses
and Non-financial Businesses: Jan – Jun, 2014 (1) 7/31
Sisi
Overview of cash flows for six months ended June 30, 2014 Consolidated Financial Non-Financial Common
Income before income tax 43.7 22.4 21.4 -
Depreciation and amortization 14.3 4.4 9.9 -
Other loss (profit) 5.1 - - 5.1
Decrease (Increase) in operating receivables 8.9 0.0 8.9 -
Decrease (Increase) in loans for credit card biz (39.1) (39.1) - -
Increase (Decrease) in deposits for banking biz 53.9 53.9 - -
Decrease (Increase) in call loans for banking biz 15.0 15.0 - -
Decrease (Increase) in loans for banking biz (36.3) (36.3) - -
Increase (Decrease) in operating payables (17.9) (8.7) (9.2) -
Increase (Decrease) in accounts payable - other and accrued expenses - - - -
Decrease (Increase) in financial assets for securities biz 177.8 177.8 - -
Increase (Decrease) in financial liabilities for securities biz (141.9) (141.9) - -
Others (5.8) (9.6) 3.8 -
Income tax paid (32.6) (8.9) (23.7) -
Net cash flows from operating activities 45.1 29.0 11.0 5.1
8/1
片山再鑑
68
23.4
14.8
* Breakdown between financial and non-financial businesses are based on internal estimation and not reviewed by independent auditors.
(JPY bn)
Breakdown of Cash Flows by Financial Businesses
and Non-financial Businesses: Jan – Jun, 2014 (2) 7/31
Sisi Overview of cash flows for six months ended June 30, 2014 Consolidated Financial Non-Financial Common
Increase in restricted deposits (7.9) - (7.9) -
Increase in time deposits (8.1) (7.7) (0.4) -
Decrease in time deposits 6.3 5.9 0.4 -
Purchase of property, plant and equipment (5.1) (1.1) (4.0) -
Purchase of intangible assets (12.2) (4.2) (8.0) -
Acquisition of subsidiaries (76.6) (0.0) (76.6) -
Purchase of investment securities for banking biz (129.6) (129.6) - -
Proceeds from sales and redemption of investment securities for banking biz 140.6 140.6 - -
Purchase of investment securities for insurance biz (5.3) (5.3) - -
Proceeds from sales and redemption of investment securities for insurance biz 2.5 2.5 - -
Purchase of investment securities (3.7) (3.7) (0.0) -
Proceeds from sales and redemption of investment securities 3.1 3.1 - -
Other payments (8.6) (0.1) (8.4) -
Other proceeds 3.1 2.1 1.0 -
Net cash flows from investing activities (101.4) 2.5 (103.9) -
Net increase (decrease) in short-term borrowings (10.3) (9.3) (1.0) -
Increase (Decrease) in commercial papers (35.0) (8.0) (27.0) -
Proceeds from long-term debt 145.8 33.0 112.8 -
Repayment of long-term debt (37.5) (18.5) (19.0) -
Income from bond issuance 29.8 - 29.8 -
Cash dividends paid (5.2) - (5.2) -
Others (1.2) (0.5) (0.7) -
Net cash flows from financing activities 86.4 (3.2) 89.6 -
Effect of change in exchange rates on cash and cash equivalents (1.7) - - (1.7)
Net increase (decrease) in cash and cash equivalents 28.4 28.3 (3.3) 3.4
Cash and cash equivalents at beginning of the year 384.0 - - -
Cash and cash equivalents at end of June 2014 412.4 - - -
8/1
片山再鑑
69
23.4
14.8
(IFRS, JPY mm)
aoki
7/28
※Viber PPAの金額掲載前
Balance of Goodwill (as of end of June 2014)
*
(JPY mm)
aoki
7/29
注記修正（末吉さんに要確認） Goodwill
Non-Amortizable
intangible assetsGoodwill
Non-Amortizable
intangible assets
92,386 7,420 89,492 7,075
PRICEMINISTER S.A.S 15,519 6,462 14,798 6,162
Kobo Inc. 19,766 32 19,088 31
VIKI, Inc. 17,510 - 16,784 -
Others 39,591 926 38,822 882
46,617 - 46,617 -
Rakuten Bank, Ltd. 32,886 - 32,886 -
Others 13,731 - 13,731 -
3,223 - 86,753 -
Viber Group - - 83,534 -
Others 3,223 - 3,219 -
142,226 7,420 222,861 7,075
December 31, 2013 June 30, 2014
Total
Others
Internet Services
Internet Finance
大野再鑑
* After Purchase Price Allocation (PPA), Viber group recognized intangible assets of JPY 7,933 million, which are amortized in straight line over
9 years on average
70
23.4
14.8
* Acquisition Basis
(JPY bn)
Aoki
7/28 Rakuten Group’s CAPEX*
Q1 Q2 Q3 Q4 Q1 Q2
Property, plant and equipment 1.89 2.92 2.73 3.74 2.06 2.65
Intangible assets 5.55 6.56 4.78 6.34 7.11 5.74
Total 7.44 9.48 7.51 10.08 9.17 8.39
FY2014FY2013 大野
8/1再鑑
71
23.4
14.8
(JPY bn, IFRS) As of Jun 30, 2014
片山更新
7/22
Rakuten, Inc. Balance Sheet
(Non-consolidated)
Cash and cash equivalents 17.7 Accounts payable - trade 2.7
Accounts receivable - trade 51.1 Bonds and borrowings 227.5
Property, plant and equipment 7.2 Other liabilities 140.2
Intangible assets 23.2 TOTAL LIABILITIES 370.4
Investment securities and financial assets 616.0 Common stock 111.0
Other assets 23.9 Capital surplus 121.9
Retained earnings 134.0
Treasury stock △3.6
Other components of equity 5.4
TOTAL NET ASSETS 368.7
TOTAL ASSETS 739.1 TOTAL LIABILITIES AND NET ASSETS 739.1
72
23.4
14.8 Other Information
73
23.4
14.8
Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14
Revenue 27,891 27,249 31,940 30,327 33,593 33,768 39,587 38,560 35,979
Revenue
excl. 1st Party*2 27,850 27,213 31,874 30,265 32,264 32,356 37,747 36,754 34,552
Operating Income 15,648 14,979 18,529 17,664 17,617 17,372 21,185 20,895 18,639
Operating Income
excl. 1st Party*2 15,664 14,996 18,521 17,669 17,696 17,514 21,368 20,881 18,694
OI Margin 56.1% 55.0% 58.0% 58.2% 52.4% 51.4% 53.5% 54.2% 51.8%
OI Margin
excl. 1st Party*2 56.2% 55.1% 58.1% 58.4% 54.8% 54.1% 56.6% 56.8% 54.1%
(JPY mm)
Rakuten Ichiba: Operating Income Margin StylifeとFine Tradingを
除いた場合
*1: Adjusted for reversal of point allowance due to the change of consumption tax rate
*2: Stylife (1st Party Business) was consolidated from Q2/13
*1
7/31
Sisi
74
23.4
14.8
(JPY mm)
7/31
Sisi Rakuten Travel: Accounting Adjustments
Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14
Revenue
(Accounting)7,247 9,371 7,272 7,824 7,821 10,197 8,848 8,536 8,284
Adjusted Revenue*1 7,063 9,067 7,918
Operating Income
(Accounting)2,773 4,256 759 2,969 2,465 4,058 3,546 1,471 2,534
Adjusted
Operating Income*1,2,3 2,565 3,911 3,383 3,300 2,854
*1: FY2012 revenue and operating income: Adjusted for correction of costs recorded in Q4/12 regarding dynamic package transactions
*2: Operating Income in Q1/14 : Adjusted for impairment loss of goodwill and intangible assets of Etpass (China) (One off time)
*3: Operating Income in Q2/14 : Adjusted for impact of accounting error mainly related to coupons
75
23.4
14.8
Marketplace GMS growth: +30.2% YoY (+15.7% YoY forex adjusted)
Ichiba-style events and campaigns proving successful overseas
*1: Marketplace = Taiwan Rakuten Ichiba + Tarad Premium Mall + Rakuten.com Shopping + PriceMinister + Rakuten Belanja Online + Rakuten
Deutschland + Play.com + Rakuten Brasil + Rakuten Malaysia + Rakuten Spain + Rakuten Austria + Rakuten Singapore
*2: Other GMS = C2C, SaaS and First Party = PriceMinister C2C + Rakuten Brasil SaaS + Buy.com First Party + Play.com First Party
*1
*2
7/23
Jeremy
Q2/14 GMS of Overseas Companies
7/31
大野再鑑
76
23.4
14.8
Kobo Viki
Content line-up
4.3 million titles 32,000 videos
Number of Languages
9 (system)
70 (content)
200+ (50 of the languages are
endangered)
Words translated - 660 million
Number of Countries 19 Service used:190+
Content procured:
50+
The World’s Leading Content Platform
Jeremy updated
7/22
77
23.4
14.8
(JPY mm)
*2
*1
*1
7/24
大野更新
Credit Card Business: Revenues and Expenses
Q2/13 Q3/13 Q4/13 Q1/14 Q2/14
Total revenues 18,602 19,342 22,201 22,474 23,833
Shopping 10,770 11,585 13,021 13,840 14,857
Revolving 6,616 7,100 7,626 8,177 8,719
Others 4,154 4,485 5,395 5,663 6,137
Credit guarantee 2,491 2,681 2,877 2,957 3,223
Cash advances 1,492 1,617 1,787 1,806 2,017
Others 3,850 3,459 4,516 3,871 3,737
Total operating expenses 15,892 16,176 18,109 18,494 19,645
Personnel costs 1,373 1,725 1,441 1,624 1,807
General expenses 9,922 9,601 11,623 11,312 11,805
Interest expenses 1,487 1,601 1,678 1,748 1,949
3,069 3,202 3,314 3,739 4,019
Others 42 47 53 71 65
Operating income 2,710 3,166 4,093 3,980 4,188
Expenses related to doubtful accounts
IFRS
78
23.4
14.8
(JPY mm)
7/22
大野更新
Credit Card Business: Transaction Volume
* Increase due to change of contract with a tie-up credit card company
7/31
大野更新
Others
Q2/13 Q3/13 Q4/13 Q1/14 Q2/14
607,767 649,382 768,057 808,451 820,081
607,087 648,636 767,314 807,695 819,338
680 746 743 757 743
19,228 19,783 21,523 23,267 26,030
18,303 18,905 20,825 22,507 25,306
925 878 698 760 724
4,925 5,250 5,052 5,223 18,098*
631,920 674,415 794,632 836,942 864,209Total transaction volume
General services
Card shopping
Others
Card cash advances
Financing
Others
Loan cards
79
23.4
14.8
(JPY mm)
* Before deducting allowance for doubtful accounts
7/22
大野更新
Credit Card Business:
Loan Receivables Balance
Q2/13 Q3/13 Q4/13 Q1/14 Q2/14
387,700 405,638 483,081 526,055 515,201
387,494 405,405 482,823 525,798 514,960
186,285 199,467 215,009 228,935 242,461
206 234 258 257 241
68,793 69,856 70,234 73,201 75,504
30,355 32,701 34,408 38,376 41,566
5,586 5,545 5,312 5,168 4,931
32,852 31,610 30,515 29,657 29,007
10,200 10,949 11,912 12,947 14,149
63 43 40 31 28
466,756 486,487 565,267 612,235 604,882
-405 -497 -661 -789 -869
466,351 485,990 564,606 611,446 604,013
Card cash advances
Installments
Amount reported in IFRS B/S*
Card shopping
incl. Revolving balance (principal)
Others
Total balance
Differences between J-GAAP and IFRS
Loan cards
Financing
Foreclosed credit guarantees
General services
Others
197,730 211,097 222,079 237,612 246,716Credit guarantee for Rakuten Bank super
loan and etc (Off-balance)
80
23.4
14.8
(JPY mm)
7/22
大野更新
Credit Card Business:
Allowance for Doubtful Accounts
Q2/13 Q3/13 Q4/13 Q1/14 Q2/14
423,410 444,541 523,527 570,498 562,696
417,258 437,912 516,514 563,125 555,192
6,152 6,629 7,013 7,373 7,504
30,766 29,549 28,490 27,646 26,999
23,314 22,888 22,678 22,555 22,608
7,452 6,661 5,811 5,092 4,390
454,176 474,090 552,017 598,144 589,694
440,572 460,800 539,192 585,679 577,801
13,604 13,290 12,825 12,465 11,894
3.00% 2.80% 2.32% 2.08% 2.02%
3,999 3,922 3,859 3,767 3,658
458,175 478,012 555,876 601,912 593,352
Normal
Rakuten Card
Normal
Doubtful (4months-and-over-delinquent)
Normal
Doubtful (4months-and-over-delinquent)
Total balance of loan receivables
% of doubtful accounts
Secured
Total balance
Doubtful (4months-and-over-delinquent)
Others (incl. re-contract)
17,202 16,987 16,644 16,543 15,940
3.75% 3.55% 2.99% 2.75% 2.69%
2,304 2,305 2,316 2,458 2,764Write-off for bad debt
Allowance for doubtful accounts
Allowance ratio
81
23.4
14.8
(JPY mm)
* This figure was amended on November 11, 2013
7/22
大野更新
Credit Guarantee Business:
Allowance for Doubtful Accounts
Q2/13 Q3/13 Q4/13 Q1/14 Q2/14
10,200 10,949 11,912 12,947 14,149
3,083 3,323 3,649 3,986 4,655
778 836 987 1,017 1,138
Foreclosed credit guarantees
Write-off for bad debt
Allowance for doubtful accounts
82
23.4
14.8
(JPY mm)
7/22
大野更新
Banking Business: Revenues and Expenses
Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 YoY
(2) 10,334 11,040 11,439 11,631 12,370 +19.7%
(1-2) 230 98 440 241 195
Ordinary income (J-GAAP) (1) 10,564 11,139 11,879 11,873 12,565 +18.9%
6,383 6,935 7,369 7,421 8,036 +25.9%
3,623 3,483 3,703 3,788 3,830 +5.7%
557 623 521 603 634 +13.9%
1 97 286 61 65 +8951.5%
8,828 9,431 9,812 9,865 10,201 +15.6%
470 551 614 595 614 +30.7%
3,777 3,972 4,294 4,400 4,788 +26.8%
- - - - - -
4,579 4,814 4,911 4,857 4,773 +4.2%
2 94 -6 13 25 +1011.4%
(3) 1,736 1,708 2,067 2,007 2,364 +36.2%
Differences between J-GAAP and IFRS (3-4) 23 -48 -63 49 241
(4) 1,713 1,756 2,129 1,959 2,123 +23.9%
Fees and commissions payments
Interest expenses
Operating Income (IFRS)
Interest income
Fees and commissions
Other ordinary income
Other income
Other ordinary expenses
Ordinary expenses (J-GAAP)
General and administrative expenses
Other expenses
Ordinary income (J-GAAP)
Differences between J-GAAP and IFRS
Revenue (IFRS) 7/30
OI margin
大野更新
83
23.4
14.8
(JPY mm)
Balance of Deposits (Liabilities) Balance of Assets (JPY mm)
*1: Intercompany elimination at IFRS consolidation
*2: Other deposits include deposits in foreign currencies and others
7/22
大野更新
Banking Business: Invested Assets and Deposits
Jun/14
Deposit Balance 1,065,337
Ordinary Deposits 578,635
Time Deposits 419,373
Other Deposits*2 67,328
Jun/14
865,554
378,687
Rakuten Card securitized assets*1 355,126
Others 23,561
165,917
JGB 59,705
Local Government bonds -
Corporate bonds 25,706
Stocks 1
Others 80,505
276,950
Rakuten Bank Super Loan 252,871
Others 24,079
44,000
305,518
1,171,072Total assets
Securitized loan receivables
Invested assets
Securities
Other assets
Others
Loan Receivables
84
23.4
14.8
*1: Amortization of intangible assets by PPA (Purchase Price Allocation) through acquisition is adjusted
*2: Including policies of succeeded mutual aid association business in 2008
*3: Solvency Margin Ratio of Q2/14 is preliminary
*4: MCEV uses Simplified calculation methodology
(JPY mm)
Rakuten Life Insurance Co., Ltd. quarterly results (IFRS)
(No. of contracts, JPY mm) Rakuten Life Insurance Co., Ltd. Major indices
7/23
大野更新
MCEV未更新
Rakuten Life Insurance
Quarterly Results and Major Indices
*1: Rakuten Life Insurance Co., Ltd. was consolidated from the end of October, 2012
*2: Depreciation of intangible assets by PPA (Purchase Price Allocation) through acquisition is adjusted
*3: Including policies of succeeded mutual aid association business in 2008
*4: MCEV uses Simplified calculation methodology.
7/30
大野
MCEV更新
7/31
大野
生命指摘事項
- Q2/14 includes payment of legal settlement : JPY441 mm
Q2/13 Q3/13 Q4/13 Q1/14 Q2/14
No. of New Policies 16,947 12,244 15,654 17,883 14,220
Annualized Insurance Premiums 548 425 536 640 518
No. of Policies*2 658,836 654,293 654,289 655,646 652,484
Annualized Insurance Premiums*2 27,180 27,157 27,266 27,442 27,464
917.1% 866.2% 862.6% 808.8% 1,183.2%
45,519
Adjusted Net Asset Value 4,874
The Present Value of Future Profits 40,735
MCEV*4
Solvency Margin Ratio*3
Q2/13 Q3/13 Q4/13 Q1/14 Q2/14
Revenue 6,786 6,717 6,804 6,761 8,225
Operating Income before PPA*1 70 695 813 414 63
Operating Income (Loss) -139 486 604 229 -120
8/3
大野
BPC数値＆*3追加
85
23.4
14.8
* Rakuten Members excluding non-active users who have not used any Rakuten services, and excluding members who logged but later withdrew
their membership within a month
(Million persons)
Rakuten Membership
Jun/13 Mar/14 Jun/14 YoY
Rakuten members 85.51 91.93 93.87 +9.8%
Log-in members* 58.82 64.59 66.40 +12.9%
7/28
青木更新
7/30
大野再鑑
