LINE Q4 2016 Earnings Results January 25, 2017

LINE Corporation

Disclaimer This presentation contains forward-looking statements with respect to the current plans, estimates, strategies and beliefs of LINE Corporation (the “Company”). Forward-looking statements include, but are not limited to, those statements using words such as “anticipate,” “believe,” “continues,” “expect,” “estimate,” “intend,” “project” and similar expressions and future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may,” or similar expressions generally intended to identify forward-looking statements. These forward-looking statements are based on information currently available to the Company, speak only as of the date hereof and are based on the Company’s current plans and expectations and are subject to a number of known and unknown uncertainties and risks, many of which are beyond the Company’s control. As a consequence, current plans, anticipated actions and future financial position and results of operations may differ significantly from those expressed in any forward-looking statements in the presentation. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented and the Company does not intend to update any of these forward-looking statements. Risks and uncertainties that might affect the Company include, but are not limited to: i. its ability to attract and retain users and increase the level of engagement of its users; ii. its ability to improve user monetization; iii. its ability to successfully enter new markets and manage its business expansion; iv. its ability to compete in the global social network services market; v. its ability to develop or acquire new products and services, improve its existing products and services and increase

the value of its products and services in a timely and cost-effective manner; vi. its ability to maintain good relationships with platform partners and attract new platform partners; vii. its ability to attract advertisers to the LINE platform and increase the amount that advertisers spend with LINE; viii. its expectations regarding its user growth rate and the usage of its mobile applications; ix. its ability to increase revenues and its revenue growth rate; x. its ability to timely and effectively scale and adapt its existing technology and network infrastructure; xi. its ability to successfully acquire and integrate companies and assets; xii. its future business development, results of operations and financial condition; xiii. the regulatory environment in which it operates; xiv. fluctuations in currency exchange rates and changes in the proportion of its revenues and expenses denominated in

foreign currencies; and xv. changes in business or macroeconomic conditions.

Ads Steady growth in the number of official accounts for Messenger Ads

Performance Ads continues to add Ad inventory and clients

Communication &

Content

Sharp increase in sticker engagement. Year-end campaigns contributing to Paying User (PU) growth

Solid revenue from existing game titles

Smart Portal LINE NEWS MAU continue to grow globally

Number of LINE Pay registered accounts and GMV steadily rising

3

Financial Negative impact of 678mn yen in revenues and 1.08bn yen in operating

income due to adjustments to reconcile the differences in settlement amounts from the in-app payment processing platform providers

Executive Summary (Q4 2016)

YoY 15.4%↑

DAU/MAU: 72%

Global MAU: 217mn

51 54 55 57 58 61 62 64 66

62

70 76

81 87

91 95

98 101

113

123

130

138

145 152

157 162

167

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

Japan Taiwan, Thailand, Indonesia

(mn)

4

Monthly Active Users | Four Key Countries

31.9 32.3 33.5 33.9

35.9 37.5

Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

Ads Communication Content Others

Revenues

By Business

＊Q4 2016

By Geography

4％ 7％ 6％ 7％

10％

24％ 24％

23％ 22％ 20％

41％ 36％ 35％ 34％

30％

30％ 33％

35％ 37％ 40％

(bn yen)

73%

27%

Japan Rest of world

5

11％

19％

29％

42％

9.5

10.7

11.9

12.6

14.5

15.7

Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

Portal Ads Messenger Ads Performance Ads

LINE Ads

24％

76％

23％

75％

22％

71％

19％

66％

3％

7％ 15％

17％

57％

25％

6

(bn yen)

Q1'16 Q2'16 Q3'16 Q4'16

6,751 7,992 9,933 11,166

Ads revenue

YoY 47.5%↑ / QoQ 8.6%↑

LINE Ads revenue

YoY 59.1%↑/ QoQ 9.5%↑

Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

390 419 456 480 521 549

17％

57％

26％

LINE Ads Platform Impressions (mn)

# of Global Paid Official Accounts

Ads Official Account, LINE@, Sponsored Sticker, LINE Point ads, Timeline/LINE NEWS ads, etc.

Communication Stickers, Theme, LINE Out(Call), etc

7.8 7.7 7.7 7.4 7.3 7.0

Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

7

(bn yen)

Communication revenue

YoY 9.6%↓ / QoQ 3.9%↓

Sticker settlement amount recovered but

revenue declined due to 469mn yen

adjustment

Daily average number of stickers sent (mn)

Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

379 388 389 397 384 407

Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

MAU(mn) 32.0 31.9 30.8 28.9 27.5 26.5

PU ratio 4.4% 5.2% 5.2% 4.9% 5.1% 5.0%

13.2

11.6 11.9 11.4

10.8 10.8

Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

Content revenue

YoY 7.5%↓ / QoQ 0.1%↓

Solid revenue from existing casual game but

revenue was flat due to 209mn yen

adjustment

8

(bn yen)

LINE GAME KPI

Content LINE GAME, LINE PLAY, LINE Manga, LINE Fortune, LINE MUSIC, etc.

9

1.4

2.3

2.0

2.5

3.4

4.0

Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

(bn yen)

Others revenue

YoY 72.9%↑ / QoQ 17.1%↑

# of LINE Friends stores in 5 countries

Others LINE FRIENDS, LINE Part-time Job, LINE Pay, LINE Mobile, etc.

Q1'16 Q2'16 Q3'16 Q4'16

22 19 25 26

65 66 67

93

Q1'16 Q2'16 Q3'16 Q4'16

19

42 46 46

27

50

60

39

69

96

106

Q1'16 Q2'16 Q3'16 Q3'16

Japan Taiwan, Thailand, Indonesia

(mn)

10

20

Smart Portal Update | Contents Platform

(mn)

LINE NEWS & LINE Today MAU B612 MAU (Global)

Smart Portal Update | Life Platform

11

Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

Taiwan

Started issuance of CTBC LINE Pay card, partnering with CTBC Bank

Domestic

New user registration increased due to New Year’s “Otoshidama” campaign

Indonesia

Partnered with largest local Mandiri Bank and started LINE Pay e-cash

LINE Pay Registered Accounts (global)

YoY 127%↑

12

Customer support service using both AI engine and operator

Automatically reply to customer inquiries using natural language processing and deep learning technology

Respond to inquiries via chatbot

Switch to operator if necessary

LOHACO AIRDO

Board flight using QR code sent to LINE chat

Chatbot for inquiries

Smart Portal Update | Life Platform

* IVR: Interactive Voice Response

Service Image

（mn yen） Q4'15 Q3'16 Q4'16

Growth

Y/Y Q/Q

Revenues and other operating income 32,440 36,099 38,145 17.6% 5.7%

Revenues 32,332 35,930 37,465 15.9% 4.3%

LINE Ads 8,235 11,960 13,098 59.1% 9.5%

Portal Ads 2,431 2,524 2,633 8.3% 4.3%

Communication 7,714 7,255 6,973 -9.6% -3.9%

Content 11,637 10,774 10,760 -7.5% -0.1%

Others 2,315 3,417 4,002 72.9% 17.1%

Other operating income 108 170 680 530.3% 301.1%

Operating expenses 31,659 31,173 36,542 15.4% 17.2%

Operating income 781 4,927 1,603 105.3% -67.5%

Margin(%) 2.4% 13.6% 4.2% +1.8pt -9.4pt

Pre-tax income -1,860 4,578 2,724 n/a -40.5%

Tax -4,433 1,664 288 n/a -82.7%

Net income from continuing operations 2,574 2,915 2,436 -5.3% -16.4%

Discontinued operations income -2,852 -96 -219 n/a n/a

Net income -279 2,818 2,217 n/a -21.3%

13

Earnings Summary (Q4 2016)

Supplemental Information to Q4 Results

14

Adjustments to the earnings to reconcile the differences in settlement amounts from the in-app payment processing platform providers

(mn yen) Amount

Revenues -678

Communication -469

Content -209

Operating expenses 400

Operating income -1,078

Sales records existed, but no payment from in-app payment processing platform providers

Payments made from in-app payment processing platform providers, but no match to the sales records

Impact on financial statements

Impact on financial statements Recorded as a liability of 1.27bn yen as of

end of December 2016

Will be recorded as earnings once obligation of liability is finished

Operating Expenses

（mn yen） Q4'15 Q3'16 Q4'16

Growth

Y/Y Q/Q

Operating expenses 31,659 31,173 36,542 15.4% 17.2%

Payment processing and licensing 7,859 7,308 7,346 -6.5% 0.5%

Employee compensation 10,028 9,775 10,555 5.3% 8.0%

Marketing 3,130 2,798 4,280 36.7% 53.0%

Infrastructure and communication 2,137 1,881 2,113 -1.1% 12.3%

Authentication and other service 2,995 3,584 4,673 56.0% 30.4%

Depreciation and amortization 1,104 1,425 1,441 30.6% 1.1%

Other operating expenses 4,406 4,401 6,134 39.2% 39.4%

15

*Other operating expenses include LINE Friends COGS, office related expense and IPO related expenses

6.1

7.1 6.9 7.3 7.4 8.4

3.0

2.9 2.5

2.5 2.4

2.2 9.0

10.0

9.4 9.7 9.8

10.6

Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

Salary + Others SBC

1.6 2.0

1.3 1.5

2.2

3.1

1.9 1.2

1.0 1.0

0.6

1.1 3.5

3.1

2.3 2.4

2.8

4.3

Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

Japan Rest of World

(bn yen) (bn yen)

16

Employee Compensation Marketing

Employee Compensation and Marketing

(bn yen)

17

(bn yen)

Operating Income (Margin) Net Income (Margin)

Operating & Net Income

2.1

0.8

5.3

3.8

4.9

1.6

4.2

6.6%

2.4%

15.6%

21.0%

13.6%

4.2%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

0

0

0

0

0

0

0

0

0

0

Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

OP Income One-time other OP Income Margin (%)

(2.3)

(0.3) (0.2) (0.3)

2.8

2.2

3.4

-7.3%

-0.9% -0.7%

8.1% 7.8%

5.8%

-12.0%

-7.0%

-2.0%

3.0%

8.0%

13.0%

0

0

0

0

0

0

0

0

Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

OP Income One-time other OP Income Margin (%)

3.1

-0.8%

8.0

11.3%

Margin (excl. one-time other operating item) Margin (excl. one-time other operating item)