Rakuten Group Inc S/Adr

Good afternoon and thank you for joining Rakuten Group's 2024 Second Quarter Financial Results Meeting. We have disclosed the latest consolidated financial reports at 3 p.m. today. You can view this data on our corporate website's page for investors, along with the presentation documents used in this meeting. And if your voice is cut, you can use the different IC servers. And then now, Mr. Mikitani will give a presentation. Mikitani-san, please go ahead. Good afternoon, everyone. Some hot days are continuing and 2024 Q2 financial results meeting is held today. And first of all today, so I'm sure you are paying attention on here, Rakuten Mobile. So looking at the total subscribers, 7.7 million. And then MNO plus NO, and it's 7.26 million. And this is as of August 7th data. And then looking at the subscribers number of this Q2, and the B2C subscribers are increasing drastically. And then this is what area that you have to pay attention to. So the Rakuten mobile non-consolidated pre-marketing cash flow, this is before marketing means acquiring customers or retain customers and the marketing cost related to that. If we exclude that marketing related cost and then in QT Rakuten mobile non-consolidated basis pre-marketing cash flow achieved profit. So this is more detailed information. As you can see, this graph started from 2022, and then this was a quite challenging and exciting Rakuten Mobile project that we kicked off. And Rakuten Mobile's contribution to the entire Rakuten group, Rakuten Ichiba, or Rakuten Travel, and Rakuten Card, And then given that entire group, so at the group level, the cash flow already turned into positive. So this project itself, looking from the entire group perspective, it's already turned into positive from cash flow perspective. And I think you can read it from this chart. And then let me talk about the Q2 highlight.

First, on a consolidated basis, the revenue is shown here against last year. Year-on-year, 8.1% plus. So the record high, $537.3 billion was the consolidated revenue. And the internet segment and also overseas EC, or international EC and contents basis have been expanded and contributed to revenue growth. And in the fintech segment, each of the services or the segments are doing well. And the mobile segment, we have subscribers increase and so boosted revenue by 15.6 billion yen year on year. Now, looking at the operating income, dramatic improvement. So improvement of... 27.6 billion yen year-on-year. It was minus 11.8 billion, but EBDA, we actually had 66.8 billion in EBDA, and also non-Fintech posted EBITDA profit of 9.9 billion yen as well. And as for the financial situation in the first half, because of the foreign bonds being issued, the liquidity gap until 2025 have all been addressed. And we will explain this later, but the finance lease fundraising of Rakuten Mobile has been announced, and with this funding, self-funding in the mobile business is already established. And therefore, with this Going forward, internet services, in other words, shopping and travel, or fintech businesses, generated cash can be, or cash flow can be used to reduce the interest-bearing debt at Rakuten Group Incorporated. So you can see there's a tremendous improvement in the financial situation as well.

So this is by segment business update and the internet segment. First of all, internet service segment. So the revenue was 303.9 billion yen. And then this is the plus 3.1% YOY basis. And then the operating income, which was increased by 30.3% YOY, which is 18.9 billion yen. And this is because the SPU revision was made and also There were SPU improvement, and then we are implementing the measures to our heavy users with the domestic EC revenue growth rate, and revenue went up, and also the profitability recovered because of these measures. On the other hand, so minority investment, So there is a variation loss that happened last year. So that portion was shrunk drastically. And then looking into detail of this business segment, first of all, EC business. So there are many changes. Also, the nationwide travel support happened last year, but that does not happen this year. So these various conditions, if we annualize them, and then comparing to the year before, plus 3.1%. So the fundamental became strong. And then also the good transaction and on the good customers, we are dealing our businesses with good customers. And then Rakuten travel and domestic hotel checkout GTV is plus 34% while for 30% comparing to the FY 2019. So this is comparing to the pre-COVID. And then as for the advertising business, plus 8.4% growth. And then looking at the overseas businesses, first of all Rakuten TV, number of users is 112.1 million and plus 44.2% YOY, Rakuten Kobo, all really making a profit. and the users registration is 66.6 million which is plus 6.2% YOR and Viva this is also making profit and number of users 1.5 billion plus 5.3% YOR and VK this is also profitable business and then about 90 million users are using this service So the overseas businesses overall, we are performing pretty well. And looking at the domestic AC, I mentioned some one-time factor, and if we exclude those one time, we mentioned it was increased by plus 3.8%. So if we exclude them, we have grown by 25%, as you can see from this chart. And then next is for the GMS. It's steadily recovering. And the last year, we did the SPU05 revision. There are some impact of these revisions, but the total Ichiba GMS remained steady. So Q3. So the last year we had the home tax, the revision, the last minute demand happened. So how will it be impacting into this Q3 is something we need to worry. And then these four overseas businesses overall, they're steadily growing and they're making a big profit out of this business. And then last but not least, internet service-related topic here, as you know. So Rakuten Group, thinking of the empowerment of the local government, and these are the hometown tax so that we can contribute to the regional and the community growth. And then we are actively working on to support regional economy increase. And then a point were burdened on our company, and then grant them to our users, but from MIC. So they made this notice. And they did not obtain our consensus, but they went announcement of this. And then about 2 million people signed about this petition. And then we will ask to revoke this notice strongly.