[February 12, 2016] |
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Rakuten Reports Consolidated Financial Results (IFRS) for the Fiscal Year Ended December 31, 2015
Rakuten, Inc. (TOKYO:4755) today announced the consolidated financial
reports (IFRS) for the Fiscal Year ended December 31, 2015. The Rakuten
Group achieved revenue of ¥713,555 million for the fiscal year ended
December 31, 2015, up 19.2% year-on-year, and Non-GAAP operating income
of ¥152,153 million, up 28.8% year-on-year.
Qualitative Information, Financial Statements, etc.
1. Qualitative Information Concerning Consolidated Business Results
(1) Business Results for the Fiscal Year Ending December 31, 2015
The world economy during the fiscal year ended December 31, 2015
continued to stay on a gradual recovery track, although attention must
be paid to factors including normalization of U.S. monetary policy,
uncertainty over the future outlook of the Chinese economy, and the
impact of the falling crude oil prices. The Japanese economy continued
its gradual recovery with the effects of various policies amid
continuous improvement in the wage and employment condition.
Under such an environment, the Rakuten Group has further promoted its
growth strategy. In domestic e-commerce services, the mainstay of
Internet Services, the Group maintained stable results through various
measures to improve customer satisfaction, strategies to open up the
Rakuten ecosystem and enhanced services for smart devices (smartphones
and tablet devices). For contents services, the Group decided to acquire
OverDrive (News - Alert) Holdings, Inc. (U.S.), (hereinafter "OverDrive Holdings") a
full-service digital distributor of eBooks, audio books and other
content to libraries and educational institutions, and made it a wholly
owned subsidiary in April 2015. The Group also addressed strict cost
controls while continuing strategic investments for future profit
growth, which put the results on track for improvement. The Rakuten
Group is also investing in businesses with new technologies and
innovative business models, and records unrealized gains on stocks for
such investments. In FinTech (Note 1), the further expansion of the
membership base for Rakuten Card brought in more commission income, and
the smoothly growing services of Rakuten Securities and Rakuten Bank
contributed to an increase in profit as well.
(Note 1) From the third quarter ended September 30, 2015, the Rakuten
Group changed the segment name "Internet Finance" to "FinTech." This is
to reflect the global spread of the term FinTech, a fusion of finance
and (Internet) technology, which the Group has been working on since
2003.
(2) Segment Information
Business results for each segment are as follows:
Internet Services
In the Internet Services segment for the fiscal year ended December 31,
2015, the Rakuten Group actively worked on strategies to open up the
Rakuten ecosystem, enhanced services for smart devices, promoting
marketing which utilizes big data, implementing measures to improve user
satisfaction, and enhancing services for overseas consumers among other
initiatives in its core domestic e-commerce services. As a result of
these initiatives, domestic e-commerce services revenue was robust with
7.8% year-on-year increase. In travel reservation services, strong
demand was seen in domestic travels, car rental, and inbound services
(services for reservations directed from foreign language websites). In
overseas e-commerce services, Ebates Inc. ("Ebates"), which became a
subsidiary in October 2014, contributed significantly to the growth of
performance. For contents services, strict cost controls and
contribution by OverDrive Holdings in addition to continued strategic
investments for future profit growth led to improvement in performance.
The Rakuten Group is investing in businesses with new technologies and
innovative business models, and records unrealized gains on stocks for
such investments.
As a result, revenue for the segment rose to ¥440,744 million, a 21.5%
year-on-year increase. While upfront investments are continued to be
made in future growth fields, profit from existing businesses have grown
steadily, resulting in segment profit of ¥99,508 million, a 45.4%
year-on-year increase.
(Millions of yen)
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Fiscal year ended
December 31, 2014
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Fiscal year ended
December 31, 2015
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Amount Change
YoY
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% Change
YoY
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Segment Revenue
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362,751
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440,744
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77,993
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21.5%
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Segment Profit
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68,437
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99,508
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31,071
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45.4%
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FinTech
In the FinTech segment for the fiscal year ended December 31, 2015,
shopping transaction value grew by 20.2% year-on-year in credit card
related services due to a growth in Rakuten Card membership. Moreover,
solid growth in revolving balances resulted in a rise in income
including commission income. A significant profit increase was achieved
as a result of the application of IFRS 15 in addition to steady revenue
growth. In banking services, profits continued to grow due to an
increase in interest income from loans with expanding loan balances and
the effect of improvement in cost efficiency. In securities services,
despite the impact of changing market conditions, domestic stock trading
value was solid, and profits continued to grow steadily with an increase
in foreign exchange margin transaction volume resulting from volatile
foreign exchange market.
As a result of the above, the FinTech segment recorded ¥275,136 million
in revenue, a 16.3% year-on-year increase, while segment profit was
¥63,899 million, a 29.1% year-on-year increase.
(Millions of yen)
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Fiscal year ended
December 31, 2014
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Fiscal year ended
December 31, 2015
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Amount Change
YoY
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% Change
YoY
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Segment Revenue
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236,520
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275,136
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38,616
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16.3%
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Segment Profit
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49,496
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63,899
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14,403
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29.1%
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Others
In the Others segment for the fiscal year ended December 31, 2015, the
Group conducted aggressive sales activities such as TV advertising and
sales campaigns at the storefront with the aim of increasing the number
of new subscribers of the MVNO (Mobile Virtual Network Operator)
services, Rakuten Mobile. The success of these measures contributed to a
significant increase in revenue. In VIBER MEDIA LTD. ("Viber"), a
messaging and VoIP services provider which became a consolidated
subsidiary in March 2014, strategic investments were continued for its
future growth and a consistent growth was seen in the number of user
IDs. In professional sports division, profits from the transfer
associated with the transfer of a key player in the previous fiscal year
was absent.
As a result, revenue for the segment was ¥52,092 million, a 22.7%
year-on-year increase, while segment loss was ¥8,599 million (compared
with segment profit of ¥191 million for the same period of the previous
fiscal year).
(Millions of yen)
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Fiscal year ended
December 31, 2014
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Fiscal year ended
December 31, 2015
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Amount Change
YoY
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% Change
YoY
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Segment Revenue
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42,445
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52,092
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9,647
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22.7%
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Segment Profit
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191
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(8,599)
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(8,790)
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-%
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2. Outlook for the Coming Year
The outlook for each segment is as follows.
Internet Services
In line with the global expansion of the e-commerce market, the Group's
domestic e-commerce services will keep making upfront investments for
improving customer satisfaction so as to accelerate growth of gross
merchandise sales as well as revenue.
In the overseas e-commerce services and content area, revenue is
expected to increase thanks to factors including further growth of
Ebates and OverDrive Holdings, and we will aim for an improvement in
operating income and loss related to such items.
FinTech
In credit card and related services, we will strengthen the marketing
initiatives aimed at expansion of market share and promotion of group
synergy, and strive to achieve further growth of shopping transaction
value. In banking services, solid profit is expected in line with an
increase in assets. Meanwhile, it is difficult to make a forecast for
securities services due to the substantial impact of stock market
conditions.
Others
Rakuten will continue to make strategic investments for future growth in
MVNO service "Rakuten Mobile," mobile messaging service "Viber," etc. As
a result, increase in revenue is expected.
Office relocation of the Rakuten Group was completed in the current
fiscal year, and one-off expenses of ¥4,171 million was recorded.
Notes
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(1) Changes in significant subsidiaries during the current period
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(Changes in specified subsidiaries resulting in change in scope
of consolidation): No
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New - (Company name - )
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Excluded - (Company name - )
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(2) Changes in accounting policies and changes in accounting
estimates
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1. Changes in accounting policies as required under IFRS: No
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2. Changes in accounting policies due to other reasons: Yes
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3. Changes in accounting estimates: No
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(3) Number of shares issued (Common stock)
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1. Total number of shares issued at the end of the year (including
treasury stocks)
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1,430,373,900 shares (As of December 31, 2015)
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1,328,603,400 shares (As of December 31, 2014)
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2. Number of treasury stocks at the end of the year
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6,008,788 shares (As of December 31, 2015)
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6,033,034 shares (As of December 31, 2014)
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3. Average number of shares during the year (cumulative from the
beginning of the year)
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1,374,535,931 shares (January 1 - December 31, 2015)
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1,320,627,398 shares (January 1 - December 31, 2014)
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Indication regarding execution of audit procedures
This financial report is not intended for the audit based on the
Financial Instruments and Exchange Act. At the time of disclosure of
this financial results report, the audit procedures for consolidated
financial statements in accordance with the Financial Instruments and
Exchange Act are not completed.
Explanation about the appropriate use of earnings forecasts, and
other special matters
Consolidated forecasts for the year ending December 31, 2016 are based
on information that is available at the time of writing, but a number of
known and unknown factors could cause actual results to differ from the
projections.
The above information was originally prepared and published by the
Company in Japanese as it contains timely disclosure materials to be
submitted to the Tokyo Stock Exchange. This English summary translation
is for your convenience only. To the extent there is any discrepancy
between this English translation and the original Japanese version,
please refer to the Japanese version. The following financial
information was prepared in accordance with International Financial
Reporting Standards ("IFRS").
*The full report is available at: http://global.rakuten.com/corp/investors/documents/pdf/15Q4tanshin_E.pdf
About Rakuten Rakuten, Inc. (4755:Tokyo) is one of the
world's leading Internet services companies, offering a wide variety of
services for consumers and businesses with a focus on e-commerce,
finance, and digital content. Since 2012, Rakuten has been ranked among
the world's 'Top 20 Most Innovative Companies' in Forbes magazine's
annual list. Rakuten is expanding worldwide and currently operates
throughout Asia, Europe, the Americas and Oceania. Founded in 1997,
Rakuten is headquartered in Tokyo, with over 12,000 employees worldwide.
For more information visit http://global.rakuten.com/corp/.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160211006615/en/
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