 |
| Rakuten Inc. Chief Executive Hiroshi Mikitani |
Qualitative Information, Financial Statements, etc.
1. Qualitative Information Concerning Consolidated Business Results
(1) Business Results for the Third Quarter of the Fiscal Year Ending December 31, 2013
In the world economy during the first three quarters of the current fiscal year (January 1, 2013 to September 30, 2013), the European debt crisis and a slowdown in economic growth in newly developing regions posed risks of an economic downturn. Meanwhile, in the Japanese economy, the recovery trend has been strong, as consumer sentiment recovered and business confidence of companies improved with the background of a rise in stock prices, in response to monetary easing measures and other factors.
Under such an environment, the Rakuten Group enhanced its services for smartphones, tablet devices and other smart devices, whose users have been increasing in number at exponential rates, engaged in marketing utilizing big data, and promoted Rakuten Ichiba’s B2B2C marketplace model to the world, mainly through large-scale sales events such as the “Rakuten Super Sale”. We also worked on enhancing logistics services through “Rakuten Super Logistics”, our logistics agency services for corporate clients. In the Internet Finance business segment, we aggressively expanded the business centering on Rakuten Card, which has notable synergies with Internet Services. The revitalization of the financial market also contributed to the growth in profits of the finance business during the first three quarters of the current fiscal year. Furthermore, we proactively developed the e-book service Kobo as well as video streaming services in Japan and abroad with the aim of strengthening the digital contents business which we position as one of the pillars of our future growth strategy. Through these and other measures, the “Rakuten Eco-System” continues to show solid expansion and growth.
(Millions of yen)
|
||||||||
Nine months ended
September 30, 2012 |
Nine months ended
September 30, 2013 |
Amount Change
YoY |
% Change
YoY |
|||||
| Revenue | 279,838 | 369,725 | 89,887 | 32.1% | ||||
| Operating income | 57,776 | 71,020 | 13,244 | 22.9% | ||||
Net income
(Attributable to owners of
the parent company) |
32,168 | 36,339 | 4,171 | 13.0% | ||||
Business results for each segment are as follows:
Internet Services
In the Internet Services segment during the first three quarters of the current fiscal year, Rakuten actively worked on strengthening its services for smart devices, promoting personalized marketing utilizing Big Data, and running large-scale sales events such as the “Rakuten Super Sale” and the “Rakuten Victory Sale” to celebrate the first league title victory of the Tohoku Rakuten Eagles baseball team, among other initiatives in its core “Rakuten Ichiba” service. We also strove to enhance our logistics services in line with the B2B2C marketplace model through “Rakuten Super Logistics” among other services. As a result of these efforts, we saw strong performance in the number of unique buyers and orders. Domestic e-commerce gross merchandise sales rose by 18.3% over the same period in the previous year, and we continued to maintain a high level of growth. In Travel services, leisure travel sales were strong, and we pursued a more diversified earnings base through efforts such as car rental and inbound services (services for reservations from foreign language websites), resulting in a 14.5% year-on-year increase in gross transaction value.
At its overseas ventures, Rakuten focused on marketplace-model services while also horizontally rolling out a range of strategic expertise including the points program and the “Rakuten Super Sale”, which have proven successful in Japan. Consequently, gross merchandise sales for these services have grown and are contributing to the expansion of operations.
In addition, we offered new products and services in the e-book business and video streaming services with a view to strengthening the digital content business.
As a result, revenue in the Internet Services segment climbed 18.3% year-on-year to ¥220,246 million. While profit from existing businesses continue to grow, segment profit declined 7.6% year-on- year to ¥39,477 million as a result of continued investments in future growth fields.
(Millions of yen)
|
||||||||
Nine months ended
September 30, 2012 |
Nine months ended
September 30, 2013 |
Amount Change
YoY |
% Change
YoY |
|||||
| Segment Revenue | 186,139 | 220,246 | 34,107 | 18.3% | ||||
| Segment Profit | 42,703 | 39,477 | (3,226) | (7.6)% | ||||
Internet Finance
In the Internet Finance segment during the first three quarters of the current fiscal year, the shopping transaction value for credit card and related services rose 39.6% over the same period in the previous year, accompanying an increase in Rakuten Card membership. Moreover, a solid rise in the revolving shopping balance resulted in a rise in commission income, continuing notable growth in profit. In securities services, revenue and profit grew substantially, including a 260.0% increase over the same period of the previous year in proceeds from domestic stock trading, supported by the revitalization of the financial market. In banking services, solid growth in loan balances led to increased interest income from loans.
As a result of the above, the Internet Finance segment recorded ¥147,747 million in revenue, a 66.2% year-on-year increase, while segment profit grew 143.4% year on year to ¥32,006 million.
(Millions of yen)
|
||||||||
Nine months ended
September 30, 2012 |
Nine months ended
September 30, 2013 |
Amount Change
YoY |
% Change
YoY |
|||||
| Segment Revenue | 88,921 | 147,747 | 58,826 | 66.2% | ||||
| Segment Profit | 13,151 | 32,006 | 18,855 | 143.4% | ||||
In the Others segment during the first three quarters of the current fiscal year, operating income remained strong in telecommunications services due to the growth of cloud services and call services for smartphones, in addition to improvements in management efficiency. In the professional sports division, the first league title victory of the baseball team since its establishment contributed to record high attendance numbers as well as robust sales of related goods.
As a result, revenue in the segment was ¥25,984 million, a 0.6% year-on-year increase, while segment profit was ¥3,877 million, a 55.7% year-on-year increase.
(Millions of yen)
|
||||||||
Nine months ended
September 30, 2012 |
Nine months ended
September 30, 2013 |
Amount Change
YoY |
% Change
YoY |
|||||
| Segment Revenue | 25,818 | 25,984 | 166 | 0.6% | ||||
| Segment Profit | 2,491 | 3,877 | 1,386 | 55.7% | ||||
In the fiscal year ending December 31, 2013, we anticipate further expansion in the use of our services in Japan including e-commerce and travel, resulting in continued high growth. In financial services, although there will be a certain degree of impact from financial conditions, we anticipate a continuous growth in revenue created from synergies within the Rakuten Group. Aiming for an early return in income, Rakuten will continue to make strategic allocations of corporate resources and active investments in high-growth areas such as e-books, in order to generate more mid-to-long-term revenue opportunities.
While making these forward-looking investments, Rakuten intends to surpass its previous fiscal year’s financial results in the fiscal year ending December 31, 2013.
Rakuten, Inc. and its subsidiaries do not disclose earnings forecasts as these business operations include an Internet service business characterized by high uncertainty and financial related businesses such as securities business whose results heavily depend on highly volatile markets. This precludes us from making earnings forecasts.
3. Matters regarding summary information (Others)
(1) Changes in significant subsidiaries during the current period
No items to report.
(2) Outline of changes in accounting policies and accounting estimates
(Changes in accounting policies as required under IFRS)
Apart from the cases stated as follows, significant accounting policies adopted by the Rakuten Group in this summary of consolidated financial statements for the nine months ended September 30, 2013 basically remain the same as those adopted in the consolidated financial statements for the previous fiscal year. In addition, income tax expense for the nine months ended September 30, 2013 is calculated based upon estimated annual effective tax rate.
Impact from the adoption of the new accounting standards
The Rakuten Group started to adopt the following accounting standards from the first quarter of the current fiscal year.
| IFRS | Newly established or revised contents | |||
| IFRS 13 | Fair value measurement | Guidance of fair value measurements, which are required in other standards | ||
| IFRS 7 |
Financial instruments: disclosures
(Amended Dec. 2011) |
New disclosure for evaluation of the effect and potential effect of offsetting arrangements on an entity’s financial position | ||
Notes
|
| (1) Changes in significant subsidiaries during the current period
(Changes in specified subsidiaries resulting in change in scope
of consolidation): No
|
| New － (Company name － ) Excluded － (Company name － ) |
| (2) Changes in accounting policies and changes in accounting estimates |
1. Changes in accounting policies as required under IFRS: Yes
|
2. Changes in accounting policies due to other reasons: No
|
3. Changes in accounting estimates: No
|
| (3) Number of shares issued (Common stock) |
1. Total number of shares issued at the end of the period
(including treasury stocks)
|
1,322,974,100 shares (As of September 30, 2013)
|
1,320,626,600 shares (As of December 31, 2012)
|
2. Number of treasury stocks at the end of the period
|
6,033,464 shares (As of September 30, 2013)
|
6,007,996 shares (As of December 31, 2012)
|
3. Average number of shares during the period (cumulative from the
beginning of the period)
|
1,315,596,482 shares (Nine months ended September 30, 2013)
|
1,313,854,321 shares (Nine months ended September 30, 2012)
|
| (Note) | Rakuten, Inc. made a 100-for-1 stock split regarding shares of its common stock on July 1, 2012. Average number of shares during the period is calculated under the assumption that the stock split took effect at the beginning of the previous fiscal year. | |
- This quarterly financial report is not intended for the quarterly review based on the Financial Instruments and Exchange Act. At the time of disclosure of this quarterly financial results report, the review procedures for quarterly consolidated financial statements in accordance with the Financial Instruments and Exchange Act are not completed.
- The Rakuten Group adopted IFRS for the first time in the year ended December 31, 2012, and from the previous year (December 2012 period) we disclosed consolidated financial statements in conformity with IFRS.
- Rakuten, Inc. and its subsidiaries do not disclose earnings forecasts as these business operations include an Internet service business characterized by high uncertainty and financial related businesses such as securities business whose results heavily depend on highly volatile markets. This precludes us from making earnings forecasts.
*The full report is available at:
http://global.rakuten.com/corp/investors/documents/pdf/13Q3tanshin_E.pdf
About Rakuten
Rakuten, Inc. (4755:Tokyo), is one of the world's leading Internet service companies, providing a variety of services for consumers and businesses, including in the areas of e-commerce, eReading, travel, banking, securities , credit cards, e-money, logistics, portal and media, online marketing and professional sports. In both 2012 and 2013, Rakuten was ranked among the world’s Top 10 most innovative companies in Forbes magazine’s annual list. Rakuten is expanding worldwide and currently operates throughout Asia, Europe, the Americas, and Oceania. Is the headquarters of the company founded in 1997 with over 10,000 employees and partner staff worldwide, Tokyo. For more information: http://global.rakuten.com/corp/.
Contacts
Rakuten Investor Relations
investor-relations@mail.rakuten.com
http://global.rakuten.com/corp/investors/
or
Rakuten Public Relations
Email: pr@mail.rakuten.com
Tel: +81-50-5817-1104
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