Rakuten Group Inc S/Adr

Thank you very much for joining us today. I would like to offer from Rakuten Group, Inc., FY 2018-4 first quarter consolidated financial results. So already on the 1,500 hours, we have disclosed the earning call summary. Rakuten Group, Inc. corporate website, please refer to them from the investor's information page. And you may have not received smooth feed of the visual or audio. In the button that is at the bottom of your screen, you'll be able to be redirected to a different server. And also, we have generated a subtitle generated by AI. It has not been edited or confirmed and verified by humans. So there may be some incorrect information in the subtitle. So I'd like to seek for your kind understanding. So without further ado, I'd like to invite Mr. Mikitani for his presentation. Hello, everyone. And most of you, I presume, are attending through video over 2020 for the first quarter of the financial results like this presentation. So first of all, the large theme that I would like to deliver to you today in terms of our future, of course, strategic project, Rakuten Mobile, which you have engaged on. And this, in terms of EBITDA, in a single month, turning us black, we are now making very smooth progress with the profitability. And, in fact, Rakuten Mobile, the single, of course, unit in terms of EBITDA, for instance, in terms of the acquisition of new customers, the cost could be that ecosystem. There is a major contribution made to our ecosystem. And based upon all these and embracing this EBITDA already on an EBITDA basis, we are around the corner in making the business profitable. On top of that, today, I would like to bring to you the overall highlight and segment by segment results. And at the same time, financial status quo and a future outlook and a strategy and, of course, in terms of AI, artificial intelligence. We harness these new technologies, what I'd like to bring to you.

So starting with the highlight of our performance as for the revenue, on a year-on-year basis, about 8% increase was observed of 513.6 billion Japanese yen. This is record high for first quarter. Rakuten, Ichiba, and Travel. The domestic market was quite steady in its growth, and in addition, the overseas business also made progress in a steady fashion. And also, we have expanded our customer base, and also transaction volume, or value rather, has increased. And as for mobile growth in Rakuten mobile, subscribers boosted. And so MNO service revenue by Japanese 9.6 billion yen year on year was achieved. And Nongap operating income has seen a tremendous improvement. Operating income plus 43.5 billion yen year on year. So we have seen improvement. So domestic EC as well as overseas business profitability has improved dramatically. And also the Internet services, significant profit improvement in growth. Rakuten card profitability improved and Rakuten payment turned profitable. So at one time, there were some views expressed, but for commission, for example, the financial status is quite stable. And so even before, compared against the pre-zero commission level, the Rakuten securities were has the profit level back to those levels. And also cost optimization was conducted in Rakuten Mobile. Therefore, the situation has been improving. And as a result, before depreciation, that depreciation, that is EBITDA, is Japanese yen 52.8 billion. That's consolidated EBITDA. And therefore, cash flow also has improved accordingly. And therefore, well, we have corporate bond issued. We successfully issued a U.S. $2 billion denominated senior notes and 50 billion yen senior notes denominated in Japanese yen. And so liquidity gap for 2025 maturities are largely addressed. So please rest assured. So I would like to move on to the segment-based questions. presentations. Internet first.

So in terms of the revenue, it's plus by 5.4% by 285.5 billion. Non-GAAP, the operating income is 14.8% positive, so thereby 13.6 billion yen positive. So, of course, to a certain extent, the minority investment, there are some, of course, elements that need to be embraced. And if that is going to be excluded, 63.3%, a large, of course, growth has been exemplified by this business. And, of course, this is the SPU optimization is one of the bigger, of course, factors at the same time. in terms of some of the subsidy of the government by the support to have people travel. That has been already concluded. So there are negative factors, but still we are seeing a large amount of growth in terms of the profitability. So the domestic EC, on the surface, it looks as though it's minus by 4.7%, and of course 1.3 billion yen, Japanese yen. in terms of GMS. But we are now pursuing for quality rather than volume. So therefore, there are some sort of the users that are turning deficit. We are going to have a very sound and healthy, of course, customers that generate profit for our robot business. In Rakuten Ichiba, the competitiveness consistently is very strong. And at the same time, The domestic EC and GMS growth rate is the quarter is 1.5 percentage point improved. So Rakuten Travel inbound, of course, total GTV is now within a lot of inbound, so plus by 243%. And for advertisement, plus by 7.2%. And Rakuten TV overseas, that is, is 43.8% on-air growth. The amount of users are increasing. So, therefore, have exceeded over 100 million people altogether. And Global, the second, of course, Rakuten Kobo is a digital book. We have now a total of 65.7 million people that have registered. So, you're on-air plus by 6.3%. So, Colorbase Inc., the readers, digital reader, is also very, very smoothly growing and profitable. And also, Rakuten Viper, we have an increase of 5.4%, so accounting for 1.5 billion people. And what's doing very smoothly, Rakuten Viki, again, we are seeing the number of users increasing by 23%, so totaling to the amount of 86.8 million people altogether. So I'd like to break this down in more detail. So SPU, the revision of the SPU. So first of all, a unique number of unique users is growing steadily. And on the right-hand side of the chart is the graph, histogram. Of course, utilizing other service and being a subscriber of Rakuten Mobile and inclusive of that, we are seeing a reduction on non-contributors. And also at the same time, domestic EC non-GAAP, as I have mentioned, operating income, The one-time temporary factor, if you exclude that, then it's increased by 20%. So inter-baseline is a 20% growth. I think we'll be able to say that. And also large competitors' strategy is needed. So we're putting a lot of emphasis in logistics as well. So logistics services, by introducing them, Some of the merchant compared to non-merchant utilizing, it's a growth by 12.5% compared to non-user of a logistics service versus our users. And in actual terms, as you can see here, the six large warehouse out of that, four of them already is now full capacity. And other logistic business, there are various, of course, efficiency and optimization that has been implemented. So, therefore, in the future, we are going to foresee improvement of the profitability and also in terms of the growth could be quite a larger contribution that we'll be able to expect out of. The overseas business, as you can see, it is quite obvious the large improvement being made and the so-called in terms of 2.5 billion improvement in terms of operating profit. Next is fintech segment.