Kakaku.com Inc
TSE:2371
US |
Fubotv Inc
NYSE:FUBO
|
Media
|
|
US |
Bank of America Corp
NYSE:BAC
|
Banking
|
|
US |
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
|
US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
US |
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
|
CN |
NIO Inc
NYSE:NIO
|
Automobiles
|
|
US |
Fluor Corp
NYSE:FLR
|
Construction
|
|
US |
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
|
US |
TopBuild Corp
NYSE:BLD
|
Consumer products
|
|
US |
Abbott Laboratories
NYSE:ABT
|
Health Care
|
|
US |
Chevron Corp
NYSE:CVX
|
Energy
|
|
US |
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
|
US |
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
|
US |
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
|
US |
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
|
US |
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
52 Week Range |
1 616.5
2 632
|
Price Target |
|
We'll email you a reminder when the closing price reaches JPY.
Choose the stock you wish to monitor with a price alert.
Fubotv Inc
NYSE:FUBO
|
US | |
Bank of America Corp
NYSE:BAC
|
US | |
Palantir Technologies Inc
NYSE:PLTR
|
US | |
C
|
C3.ai Inc
NYSE:AI
|
US |
Uber Technologies Inc
NYSE:UBER
|
US | |
NIO Inc
NYSE:NIO
|
CN | |
Fluor Corp
NYSE:FLR
|
US | |
Jacobs Engineering Group Inc
NYSE:J
|
US | |
TopBuild Corp
NYSE:BLD
|
US | |
Abbott Laboratories
NYSE:ABT
|
US | |
Chevron Corp
NYSE:CVX
|
US | |
Occidental Petroleum Corp
NYSE:OXY
|
US | |
Matrix Service Co
NASDAQ:MTRX
|
US | |
Automatic Data Processing Inc
NASDAQ:ADP
|
US | |
Qualcomm Inc
NASDAQ:QCOM
|
US | |
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Good afternoon. I'm Shonosuke Hata, President of Kakaku.com. I thank you for taking the time from your busy schedule to participate in today's results briefing and apologize for any inconvenience caused by the remote format.
Now without further ado, I will provide a report on the operating results for the fiscal year ended March 31, 2020. Page 2 of the briefing document provides an executive summary of the operating results for the fiscal year ended March 31, 2020. All of our businesses showed strong growth. In the second half, we experienced a decline in demand following a surge ahead of the consumption tax hike as well as the impact from the novel coronavirus outbreak on some businesses in February and March. Nevertheless, we achieved full year increases in revenue and profit, and profit came in above the disclosed results forecast.
In the first half, all businesses posted revenue increases, notably the Kakaku.com business whose sales rose on last-minute demand ahead of the consumption tax increase and achieved substantial operating profit increases exceeding their targets. In the third quarter, although Kakaku.com experienced a decrease in revenue from its shopping and advertising businesses as a reaction to a surge in revenue ahead of the consumption tax hike, Tabelog's restaurant promotion business and the New Media and Solutions and Finance business achieved revenue increases. As a result, overall revenue growth remained on target.
In the fourth quarter, revenue growth slowed in all businesses due to the impact of the novel coronavirus outbreak operating profit decreased, as expected, due to the concentration of expenses in connection with advertising mainly for Tabelog as well as office floor space expansion and recruiting. I will discuss detailed figures later in the briefing. We judged that it would be difficult to reasonably calculate the impact of the novel coronavirus outbreak on our business including the future outlook.
Accordingly, we have not yet determined our results forecast for the fiscal year ending March 31, 2021. We plan to promptly make a public announcement once disclosure of the results forecast becomes possible.
Page 4 shows the consolidated operating results for the fiscal year ended March 31, 2020. In the fourth quarter, revenue increased 5.2% year-on-year to JPY 15,722 million, while operating profit decreased 7.9% to JPY 6,333 million. The operating profit margin was 40.3%. For the full year, revenue rose 11.2% year-on-year to JPY 60,978 billion, 98.4% of the disclosed forecast. Operating profit rose 8.6% to JPY 27,217 million, 101.9% of the forecast. The operating profit margin was 44.6%. Please refer to the table for the figures for profit before income taxes and profit attributable to owners of the parent company.
Next, Page 5 shows the quarterly breakdown of consolidated revenue and operating profit as well as full year figures. The full year revenue, operating profit and forecast achievement ratio figures on the right side of the table are the results I just discussed. Please refer to Page 6 for a quarterly breakdown of quarterly consolidated revenue by business. The Kakaku.com business accounted for 39.8% of total revenue in the fourth quarter. The Tabelog business accounted for 41.4% and the New Media and Solutions and Finance business accounted for 18.7%. The sales contribution of the New Media and Solutions and Finance business continued to expand in the fourth quarter.
Next, Page 7 shows quarterly change in operating expenses. Although the basic composition of expenses and absolute amounts were as planned, in the fourth quarter, absolute advertising expenses were somewhat higher than in the other quarters. With regard to this, since we spent some JPY 270 million for Tabelog TV commercials in the fourth quarter, the composition of fourth quarter expenses is basically unchanged from the prior year.
The only expense item that has increased year-on-year is rent, which rose to JPY 354 million in the third quarter and to JPY 436 million in the fourth quarter in connection with office floor space expansion. On a full year basis, rent is approximately JPY 320 million. Also supplies, depreciation and installation work expenses, which are expense items associated with the office expansion, increased as expected.
Moving along to the next section, I will now report on the operating results and operational progress by business. Please refer to the operating results by business for the fiscal year ended March 31, 2020, on Page 9 of the materials. Looking first at the Kakaku.com business, revenue in the fourth quarter was up 0.4% year-on-year. The more detailed breakdown shown below the total indicates that shopping revenue was down 0.8%, service revenue was up 8% and advertising revenue was down 13% in the fourth quarter. Kakaku.com's full year revenue was up 6.4% year-on-year.
In the Tabelog business, revenue from the restaurant promotion business increased 5.3% year-on-year in the fourth quarter and 12.6% for the full year. Overall revenue, including revenue from the premium memberships and advertising businesses increased 2.9% year-on-year in the fourth quarter and 8.3% for the full year.
In the New Media and Solutions and Finance business segment, fourth quarter revenue increased 23.7% year-on-year, and full year revenue increased 33.6%. Detailed operational progress of each business is shown on Page 10 and subsequent pages.
I will first report on progress made in Kakaku.com's shopping business. Although revenue fell in the third quarter, in reaction to last-minute demand ahead of the consumption tax increase, revenue followed a recovery trend in the fourth quarter. And revenue from personal computers remained strong. However, revenue fell year-on-year in the fourth quarter, when customers refrained from purchasing home appliances and event and leisure-related products in the aftermath of the novel coronavirus outbreak.
The graph to the bottom left shows shopping business revenue. Although fourth quarter revenue from durable goods was down 4.9% year-on-year, revenue from consumer goods showed strong 13.2% growth. The table to the right shows the number of customer referrals in core durable goods categories, whereas referrals for the PC-related product categories of desktop PCs, laptops, PC monitors and displays were up 30% in the fourth quarter. Referrals for the home appliance categories, such as washing machines, rice cookers, microwave ovens and vacuum cleaners were down slightly. However, revenue from home appliances has shown sharp growth from April onward. And the shopping business is currently delivering extremely strong results.
Please refer to Page 11. I will now provide an overview of operational progress of the Kakaku.com's service and advertising businesses, starting with the service business. Overall, fourth quarter revenue from the service business, which includes personal finance, telecommunications and other categories was very strong, growing 8% year-on-year. In particular, personal finance-related revenue, the top section of the bar graph to the left of the page, increased 44.5% and thanks to brisk demand for credit card and card loan comparison services.
On the other hand, revenue from the telecommunications category, the section below finance on the graph, was down 17.5% year-on-year. In particular, revenue from overseas WiFi rentals fell to near 0 due to the impact of the novel coronavirus outbreak. This is the reason for the decline in fourth quarter revenue for the telecommunications category.
The graph to the right shows revenue from the advertising business, which was down approximately 13% year-on-year in the fourth quarter. The result is attributable to an anticipated revenue decrease in reaction to the last-minute demand ahead of the consumption tax increase, which we mentioned at the time of the second quarter and third quarter results briefings, coupled with the impact of the novel coronavirus outbreak and cancellation or postponement of advertising placements resulting from delayed launches of some products manufactured in China.
Next, Page 12 shows operational progress of the Tabelog segment. The novel coronavirus outbreak has had a particularly strong impact on Tabelog, both in terms of new fee-paying restaurant acquisition and of the number of online seat reservations from mid-February onward. The number of fee-paying restaurants in March was approximately 59,100, the same as in December. However, the number of restaurants on new plans was 43,300, an increase from the December figure. The graph to the right shows the number of online seat reservations, which increased by 6.6% year-on-year in the fourth quarter to 8.65 million. Reservations were substantially affected by the novel coronavirus outbreak, a point I will explain using the next slide.
Page 13 shows 2 additional Tabelog KPIs. First, let's look at average monthly revenue per restaurant by quarter. Average monthly revenue per restaurant in the fourth quarter was JPY 30,200, a result partly attributable to a greater-than-anticipated decrease in the number of online seat reservations due to the impact of the novel coronavirus outbreak. The graph to the right shows change in the number of online reservations, with the red dotted line indicating 0 year-on-year change as the benchmark. In fact, since we planned for year-on-year growth of about 10%, it would be easier to understand if the benchmark were set a little higher. Even so, we see that the number of online reservations began to decline in the second half of February and fell to near 0 after the Tokyo Governor's press conference on March 25.
The graph to the left shows average monthly revenue per restaurant. Whereas, we planned on monthly revenue of around JPY 31,700 to JPY 31,800 in our pre-novel coronavirus outbreak assumptions. The monthly average decreased by about JPY 1,600 due to the impact of the outbreak.
I will now discuss operational progress of the New Media and Solutions and Finance segment, starting with Page 14. The graph to the left, which breaks down revenue from New Media and Solutions into 9 services, shows that revenue was extremely strong throughout the fourth quarter with particularly high year-on-year growth of 67.4% from Time Design, 61.4% from Kyujin Box and 47.7% from Sumaity, the lowest section on the graph. However, although they began to feel the effects at different times, Time Design, LCL and Sumaity have felt the impact of the novel coronavirus outbreak since mid-March. And revenue from travel and real estate-related services has been affected in no small measure.
The table to the right summarizes the impact of the novel coronavirus outbreak. Looking first at the travel business. Travel-related advertising has declined. Overseas WiFi rental applications have fallen sharply. And Kakaku.com's service business and 4travel have been affected as well. In addition, LCL has been the most affected by a decline in travel bookings with reservations for highway bus travel falling substantially. This has had a substantial impact on revenue.
Next, although eiga.com and gaie haven't seen a large drop-off in site traffic, revenue has declined due to suspension of advertising placements by movie distributors. With regard to job classified site traffic, although there was a temporary decline due to the impact of the temporary closure of schools, traffic has returned to near-normal from the second half of March into April and May.
The graphs on Page 15 show the number of users in revenue for Kyujin Box and insurance applications for Kakaku.com Insurance. Although, Kyujin Box' fourth quarter revenue was extremely strong, increasing by 61.4% year-on-year and by 13.5% quarter-on-quarter, we think the result may have been even better if not for the impact of the novel coronavirus outbreak. Online applications at Kakaku.com Insurance were very strong, growing 25.5% year-on-year. However, applications for overseas travel insurance have been affected by the novel coronavirus outbreak and have declined slightly.
This concludes the discussion of fourth quarter and full year revenue, profit and expenses. An overview of the business impact of the novel coronavirus outbreak starts on Page 16.
Let's look first at e-commerce. Please refer to Page 17. Our businesses, especially Kakaku.com, are seeing dramatic growth in the number of e-commerce site users and increasing demand for teleworking related and stay-at-home products as well as daily necessities and consumer goods. The current situation is that while demand for some products such as masks, sanitizers and disinfectants, has run its course, user numbers and customer referrals continue to increase for PCs, web cameras, WiFi routers and other telework-related products, game consoles and other stay-at-home products and dumbbells and other health-related products. For this reason, e-commerce-related demand is slightly exceeding expectations in the first quarter.
Turning now to the restaurant category. Reduction of business hours and temporary closure of restaurants in addition to people refraining from going out has led to a further decline in online reservations. Tabelog has responded by focusing on provision of takeout service information and Tabelog Takeout app service expansion. There has been a surge in the number of registered restaurants signing up for the Tabelog Takeout app and posting takeout service information on the Tabelog website's restaurant pages and access by users is rapidly increasing as well.
Turning now to the travel category. Needless to say, nearly all travel plans have been canceled and bookings at Time Design and LCL have plummeted to near 0. Sales from overseas WiFi rentals in the 4travel and Kakaku.com service businesses have fallen to nearly 0 from the ordinary combined level of approximately JPY 100 million per month.
Finally, in the other category shown at the bottom, slight delays have occurred in credit card issuance and conclusion of insurance policy contracts due to delays in document processing and screening and other procedures attributable to an increase in telework. Although applications are on the rise, some slippage of revenue recognition into subsequent months is expected.
Please turn to Page 18, which shows our initiatives in the restaurant business, which has been particularly affected by the novel coronavirus outbreak. First, with regard to support for restaurants, since we have seen a surge in inquiries from restaurants to Tabelog and in inquiries from users that we pass on to restaurants, we are strengthening the system for responding to such inquiries. Also, although information on government assistance measures for businesses has now been made widely available in easy-to-understand formats, we have added a page to the management screen for restaurants on the Tabelog website on which we have clearly and comprehensively collected together the widely dispersed information.
Also, with regard to free of charge promotion services and flexible handling of contract-related matters, we have waived the monthly base fee and variable fee for April and May for restaurants with which we have directly contracted. Accordingly, we expect April and May revenue from the restaurant promotion business to be nearly 0.
To respond to takeout demand, we are expanding the area covered by Tabelog Takeout, our new takeout app. And the number of applications for registration from restaurants is sharply increasing. On the Tabelog website as well, we have conducted a survey of restaurants offering takeout services. Restaurants are proactively providing information about their takeout services. And posted information on takeout services is being substantially expanded and enhanced. Currently, 26,000 restaurants already post information on their takeout services on the Tabelog website.
This concludes the explanation about the financial results for the fiscal year ended March 31, 2020, and the current impact of the novel coronavirus outbreak on our businesses. Beginning on Page 19, we provide an earnings forecast and information on initiatives going forward.
Please look at Page 20. I sincerely regret to say that since it is impossible to predict how long the novel coronavirus outbreak will continue, we have not yet determined a consolidated financial results forecast for the fiscal year ending March 31, 2021, including the outlook for the Kakaku.com, Tabelog and New Media businesses. We will promptly make an announcement once it becomes possible to disclose our results forecast.
Turning now to Page 21. Our business policy going forward remains unchanged. The main pillar of the policy is to increase the share of total revenue of the New Media and Solutions and Finance businesses to 20% or higher and expand the business portfolio. We have provided individual overviews for the Kakaku.com, Tabelog and New Media and Solutions and Finance businesses on Page 21.
Page 22 shows our key management indicator and financial policy, which remain unchanged. We are managing with the aim of achieving a reasonable ROE of 40%. Our approach to allocation of management resources involves investing in expansion of existing businesses and new businesses. And investment in leading-edge technologies and R&D as investments for growth and the pursuit of M&As and minority equity investments.
With regard to shareholder returns, we will pay appropriate dividends and return excess internal reserves to our shareholders. Although our businesses have been severely affected by the novel coronavirus outbreak, since we believe that we should in no way change our philosophy of doing business or our business model, we intend to continue to use the performance indicator and pursue the financial policy outlined here in managing our businesses.
The table on Page 23 shows changes in financial indices, including figures we have already publicly disclosed and figures included in today's summary earnings report.
Finally, Page 24 shows ESG initiatives we will implement beginning in the current fiscal year. We have made LIFE with: to become a part of people's daily lives, our corporate mission, and are working to achieve indicators we have prepared concerning our contributions in the areas of corporate governance, which is the foundation of management, the environment and society and our contributions to the economy, including development of the Internet industry. We intend to disclose details of the status of implementation of these initiatives in due course.
This concludes the overview of the operating results for the fiscal year ended March 31, 2020. Thank you very much.