Rakuten Group Inc S/Adr

Thank you very much for joining us at Rakuten Group FY2026 Second Quarter Consolidated Financial Result. So already the summary of the financial report has been disclosed half past three this afternoon. Please refer the content from the investor's information page on the corporate website. If you have problem with the truncated image and video, please select the different distribution server where is the button at the bottom of the slide. So I'd like to invite Mr. Mikitani for the presentation. Hello everyone. So first of all, the effect of the 2026, those families and individuals that has been affected, we would like to offer a heartfelt support. And two weeks before the earthquake, in fact, I was in Kumamoto, I visited E.ON Mall as well, who had been severely struck by the earthquake. And those people who have difficulties and deceived, at Nakuten Group, we would like to do everything that we can. So we'd like to offer heartfelt support and also consolidation to that. So in terms of the topic today, this will be the summary. Summary and FinTech Business Reorganization and Segment Result and in Finance, CFO Kaga-san will be presenting, AI Chief AI Officer, Data Officer, Tin Tsai will be presenting this section. So without further ado, the summary. This second quarter, in terms of the net income, we were able to achieve positive by amount of 27.2 billion yen. Mobile business is a big challenge that we have executed, and that is a growth drive for us. In between the meantime, since Q2 of 2020, we have been able to enjoy the positive result. So reflective of that, so in eight or six years, since in eight years, six years it says, but this is not only a one-off, but this need to be a perpetuating result that we would like to achieve on the coming years. In the consolidated revenue, the record high of 665.5 billion yen. With the size of our business, 11.6% growth, so we have been able to grow our business quite steadily. Each segment, all of them are on a growth trajectory. and also Inter-Consolidated EBITDA is a record high for second quarter, 150.3 billion yen. It's a growth by 11.7% in terms of the growth rate. And non-GAAP, Non-GAAP operating income is again ML service this is a record high 42 billion yen so again year on year it's 109.6% roughly 110% increase over this year and with that being said this is regarding the fintech business

So Rakuten's fintech business, bank securities and card, and although this was not included this time, insurance and Rakuten point card or Rakuten payment, we do have these entities and respectively, they're top leaders within each industry, we believe. So regarding card, shopping, GTV, A 27.7 trillion yen, that's a second quarter result, so amazing result. And for a digital bank, Rakuten Bank, the number of accounts, 18.46 million accounts. So very soon we will be achieving 20 million. And for Rakuten Securities, general accounts, 14.39 million accounts were number one in the industry. So this has industry-leading growth and overwhelming customer base. So these three companies basically will be under the umbrella of Rakuten Bank. So for the details, We would like to talk about this later, but we do believe there are two major synergies. Straightforward financial synergies, that's one. And from marketing perspective, maximizing individual customer base. So cross-use of customers or acquire new customers. So we do believe that there will be significant synergies that could be generated. So the total impact, 2028. So actually, in October, we will integrate, which means that full year will be fiscal year ending March 28. So that's 25 billion yen approximately. In financial impact and 8 billion in terms of the marketing impact. And furthermore, with this growth for March 2030, 85 billion yen of synergy effect presumably can be gained. So going forward, Rakuten Bank The synergy with Rakuten Securities We will be able to leverage their capabilities and like I said the number of accounts Rakuten Bank 18.46 million and for Rakuten Card overwhelmingly The number of cards is extremely high, so we will be able to refer customers and Rakuten card and Rakuten securities. With Nisa, it is leading the young customer base, so there once again will be synergy. So what kind of synergies? Rakuten card? Non-transfer of bank and those people with a bank transfer at Rakuten Bank, the Direct Debit, the deposit amount is 4.3 times. And with and without money bridge, that's 4.4 times difference. So as we move into the world with interest rate, how can we go about opening more accounts and have our customers deposit their balance? Thank you very much. The deposit and also diversify the portfolio. And not just these three entities but synergy with Rakuten Group can be generated. So, through Rakuten Payment, this fintech ecosystem and Rakuten Group e-commerce. So, we will be connecting the two ecosystems. And moving on to buy segment results.

So, the internet service segment. In terms of the business result for the second quarter, revenue is 338.1 billion yen, and yen on yen is plus by 4.2%. And with AI utilization and other levers, non-GAAP operating income, yen on yen is 68.6% increase, so 23.1 billion yen. So looking into the breakdown and content, the domestic ECGMS, it's year-on-year, it's a 5.3% increase, thereby 1.2%. Raku Ten Travel, GTV is a 17.2% increase. The investment again plus by 17.6% for realizing IRR. And inter-international is also a very robust business growth. Especially it could be highlighted to the sense that advertising revenue year-on-year is 65.6 billion yen. So data and AI, data mobile, DPI data inclusive, Thank you very much. So the AI, how this could be well leveraged and utilized. Without AI, we would not be able to grow our business. So with that being said, AI, we are putting a lot of emphasis on AI. But one of the example that I'd like to share with you is that what we are promoting and developing AI Shop Manager allow me to introduce the shop manager. With Rakuten and Amazon, the biggest difference is that for Rakuten, it's based on brick-and-mortar stores and the store is the basis. So in other words, the human touch shopping experience that we'll be able to offer at the same time, In terms of hospitality, we like to offer the sense of omotenashi and hospitality from Japan. The true, real store managers, 24 by 7 or serving a few tens of thousands of customers at the same time is not feasible. So the shop manager The personality or the store characteristics or the product characteristics. Having deep understanding of that, AI Shop Manager will be able to provide service 24 by 7. So I think you're running a video of this AI Shop Manager.