Q3 2020 Rakuten Inc Earnings Presentation
[music].
Hello, and welcome to Dr. <unk> third quarter.
Turning video session. We just had another quarter of double digit growth in earnings it's been tough times for all of us, but the pandemic, but were fortunate to see an increasing number of consumers digital I think their lifestyle and turning to dock then.
After all we are Japan, leading Internet company offering almost every kind.
Digital service from shopping all the way through online trading even golf Indeed, both easy shopping Gms in our security business revenue grew some 30% year on year.
All these services make up what we call the Rocktenn ecosystem and today you will hear the latest from each core business leader.
Ecommerce fintech and our mobile business.
With regard to mobile this quarter, we launched the world's first cloud native Fiveg service only six months after launching Fourg, our mobile CTO will explain how the technology enables us to offer the most affordable Fiveg service in Japan.
Pat.
Our consolidated operating loss, primarily reflects the cost of building out this mobile business, our CFO will share the financial strategy around how were funding new businesses for future returns.
So full disclosure you'll hear from our entire C suite and how.
Now, we're expanding the value of our ecosystem, it's a capex we call membership value more on this from our CEO. He doesn't mean sunny who's here to share his vision and strategy.
I found.
Wrapped in 23 years ago is a passion to revitalize span and new wins the conviction that the internet would change the world.
Dove bidding has not changed Rocktenn mission, he means empowering people and society.
Food innovation and entrepreneurship.
As we work to grow together with local communication and individuals.
At the time of our founding.
No I believe people would buy things on the Internet.
We me the impossible possible so through innovation.
BDC defined expected.
Patients.
There is tremendous speed, we've delivered a constant stream of innovations.
And we are not at owing the pace to slow down.
In our 20 force year since the foundation Ralph.
I think only to take on new challenges.
Yes.
We are on track to become the number one company in Japan.
And a leader in global Telecom industry.
Dr was founded in 1997, we just two people.
And now we have more than 22000.
Employees.
Starting with Rocktenn, it's about ecommerce marketplace.
Added fintech content and more while and now offer more than 70 services.
Nine to 7.9 team.
E Commerce Gms in Japan was.
3.9 trillion yen.
And total global GDP TV was 93 in yen.
The number of rough ideas in Japan is over 100 billion and the number of members across the World is 1.4 billion.
Here's a look back on rock.
Track record of growth and innovation since our founding.
In 1997, we opened the Internet shopping mall rocketing, it's about.
Concept was to make it easy for anyone to open a store.
On our marketplace.
In April 2000.
We were in public through an IPO on the Odisi market only three years after foundation.
In late 2000.
We established our vision for thereafter ecosystem.
The concept was a business model that connects.
Mark.
Interrupting group services.
The morbidity of users between our services.
From 2010, we.
We said it.
To expand globally was the accretion of oversea businesses.
In 2013, we shifted our stock exchange this thing.
From jazz that through the first section of Tokyo stock exchange.
Since 2006, we build up fire services to become number one in areas such as credit card banking and B, you know with a focus on expanding that wrapping ecosystem, we used the pan they.
Nick now accelerating societies these diversion.
Our strengths in online and cast their services as far their enhance the value of rock the ecosystem.
Since 2017 rocked Hansgrohe brand recognition has dramatically increased.
Due to partnerships with global sports properties.
Properties, such as FCB to Sirona and Golden State Warriors.
In April of this year, we enter the mobile carrier business.
Why don't you, though was first foodie virtualized cloud platform.
The technology allow us to offer one simple inexpensive Preston.
Lock them has led the world in digital transformation.
In the development of a biraj tee up online business centered around membership.
Oh, sorry.
Result, we boosted a higher and more sustainable gross.
Than traditional single vertical.
Industry companies.
Our 2090 year CAGR over total E. Commerce, you haven't seen Japan is more than 30%. This is a much higher.
The average gross rate of offline leaders.
Which is almost flat our crime gross easing is even stronger.
Trevor GDB Cagar has also grown significantly to plus 15%.
While the industry has been.
Are there just at negative 2% over the last 14 years.
In addition last.
Lastly, and other building sales has grown to 18% at the three year CAGR.
Despite the overall industry slowdown to negative gross.
Despite the more recent impact of the pandemic.
The budding sales continues to grow at double digit in credit card business, where we have be held the number one spot in the industry since 2017.
The shopping GDV Cagar has been over.
Slur, plus 74% over 14 years and online banking where growth has accelerated due to the pandemic.
Left him bank is a leader in terms of on that account.
And the deposit bonus.
We continue to grow study.
I am confident.
We're a foundation that has supported our long lasting gross is a culture of rocktenn.
Which accommodates diversity of our employees around the world in 2010.
Dropdown announced to change its walking language.
From Japanese to English and made that transition in 2012. This initiative was very effective.
No only.
Deepening eat.
Dunno communication, but also in strengthening due to hiring the virus top talent and age.
Yes from all over the World I think this was one of the biggest success factors have locked in to become truly global company.
A key contributor to gross and expansion of our ecosystem is and membership model under this ambitious.
She'd model.
Users can use multiple services in our ecosystem with same I'd.
And get rewarded through.
Our points program by linking 1.4 billion members around the world we have found a very unique.
Ecosystem, which.
Vertical rock the ecosystem.
Rocktenn members can accumulate and use wrapped imports when they're shopping.
Or use other services and there has been building very strong sense of loyalty among our members that are out there of course is.
You can also leverage a wealth of data from our users and created a business model, which is very very unique and very very strong.
London services began with transaction business, such as Internet shopping or travel, but now we are diversifying we have increased.
Member engagement through the Vod programs, such as I'd program point, having.
Have expanded the business domain into Fintech and advertisement we have also expanded into the offline domain through payments and credit card and so forth.
Oh Rocktenn membership about who is one of the most important capex I.
We measure the value of our ecosystem. This is the source of our vision is Patty.
And very good measurement of how valuable our group companies are very.
So much about it.
Since the kind of body of membership.
He uses lifetime value.
He lifetime body, it's got to create it including the retention rate and Oh, so retention costs. The membership value is a sum of LTV minus customer acquisition costs.
CAC.
From this.
By reducing.
The customer because some costs that membership value will be come closer the amount received by.
By lowering cost and leverage on cost.
We the ward the way our customers was point, so that they become even more loyal.
People who are.
Ecosystem.
And we can increase the the fatty Oh yeah.
Lifetime value.
And our ecosystem. This is the center of our thinking.
Membership value was 7.8 cheering and in the third quarter.
There are 2020, we will father wages up and aim to achieve.
10 to yen.
As soon as possible.
By promoting rock the ecosystem breaking down the boundaries between online and offline.
We aim to.
Or are they expand our market share of total personal consumption in Japan.
Which is about.
352 trillion yen annually.
Let's talk about some of innovative project, we are engaging at this time.
The first one is our mobile business.
We lounge full scale commercial for your service in April of this year.
And also lounge our service.
Remember by building arose first foodie Virtualized network.
Let them all well can reduce chapter.
Best men, but at least 40%.
And opening costs.
At least 30% compared to conventional networks, it's much more efficient.
We introduced rocketing unlimited five unlimited data plan that.
So he is the lads capacity demands of fiveg by significantly reducing costs through this foodie virtualization concept. There are no additional fee for Fiveg on top of Fourg for this plan. It is free for the first 12 months and then only consider now 80 yen or about.
$28.
For the second and subsequent years.
On the minimum force, we announced our cereal integration.
Our commitment to reduce.
Customer buys a father.
With me.
Making.
Some administrative contractor hundreds.
Fees Amen.
Hey man the transfer fees.
Zero.
And we also wrote new concept for sign up which be call. It he gave I seat.
Which.
New subscribers can sign up only through the Internet. Please.
Who is the assistance of AI.
Wrapped him, although it's more than just a mobile carrier service in Japan, we are planning to Peel back them mobile platform Global Telecom platform. So we have to basically pay schools. One is wrapped in mobile service in Japan, and lapping communication platform.
This globally.
We are very very ambitious, but we are also very very confident.
Let me just one more example of how innovative we are which is roughly.
Wrapped in medical.
Rocktenn medical is our affiliated.
Everybody and now developing cancer treatment platform goal eliminates platform, they said technology, which are.
Our developed to fight against various diseases, including cancer, we combine drugs.
With laser technology in September 2020 field.
<unk> manufacturing and marketing license from Japan for head and neck cancer.
This is a moment step for US yeah, I think a lot of ground dream of Concord cancer.
Here are the reuptake group highlights for the second quarter of 2020.
Due to the increase of transaction in shopping and credit card we steadily.
Increase living you.
Even dragging depend NAMIC that's.
That's the power of the ecosystem, we also exited ducky show a new members, including.
Our through our FICC businesses.
Dr ecosystem has continued to grow and adapt with new services.
That meet changing customer needs.
I see and constantly innovating ourselves.
<unk> communication now a new pillar.
Business is very very important part of our ecosystem.
And our business will continue to evolve and we're going to keep innovating on a global scale.
On top of that the pandemic is accelerated and digital transformation throughout the ecosystem.
<unk>.
He's built to capture.
This wholesale transformation and opportunity.
And we expect.
To accelerate.
Our gross under these conditions.
We.
All are very sensible for the oldest.
Stakeholders.
Of our group services customers client shareholders. Thank.
Thank you very much and we want to walk theater, which all of you and make the world a bit up late.
And keep continuous gross over <unk> of our business think.
Thank you very much.
Oh.
He just told not only to ecommerce gms well the hardcore.
Despite the impact of the rock do make purchase ahead of the consumption tax rise on October 1st.
2019, Gms remained strong.
Operating income growth also turn positive for domestic ecommerce as a whole due to the strong performance of the ecommerce business center aided or Latin each about and an improvement of the travel business.
Regarding the details operating income the ecommerce business.
Centering on letting it has increased by 5.9 billion yen young year.
On the other hand business impact by COVID-19, including left each other decreased by 3.2 billion yen year on year.
So is it six investment continued.
Resulting in an operating loss of approximately 8 billion yen in the third quarter.
Which is 2 billion higher than in the third quarter 2019.
Domestic ecommerce gms growth rate.
It is accelerating and the total Gms is planned to reach four trillion yen this year.
So as we do see ecommerce market was estimated to be about 23 again in fees.
2019, and see that is only 6.4% of total household consumption of about 300 Cheerier yes.
We can expect further growth to continue.
Considering the market side of each item within.
She's got a household consumption, we expect a huge room for online growth in the future.
Shopping ecommerce gms, including collecting Utiba and first party business grew significantly in Q3 despite.
Despite the impact of the consumption tax hike on October Onest 2009.
Banking two years ago Cagar in Q3 was more than plus 25% growing steadily and strongly.
Attracting each other.
In line with expansion of new users the monthly purchase amount per person has also increased.
In addition, about 75% of users who made a purchase on Latin each about in the second quarter also made at <unk>.
Repeat purchase in the third quarter.
After that the journal GTV is improving due to the acquisition around going now.
The government's go to each other.
Other campaigns.
The recovery has been more rapid than the industry as a whole.
In addition reservation based GTV is currently growing significantly and overall growth is expected to turn positive in the fourth quarter.
I left anyway.
How are you its cashback loyalty rewards site.
The total amount of Gms has decreased due to the impact of COVID-19.
Especially in the travel business, which comprise a large portion of gms.
On the other hand that then.
But we shouldn't have steadily increased due to the rebranding strategy implemented in 2019.
Yes.
Wrapping Golden lower.
Japan in terms of recognition as a golf course individual site.
He denies the spreads goal has seen increasing demand as ups, both they can be enjoyed while maintaining social distancing.
Lastly, integrating initiative in the gold industry to conduct interviews with all golf courses.
And postpaid COVID-19 condo images the golf courses on its web site.
In addition, I will close gallery using drones that can be enjoyed every year in the watched online at home was also launched at the same time and so.
Our domestic market share in gold.
Has further expanded during quarter to 19.
In addition, 76.8% of lost and go to the Doctor members use other services within the rafting group in the third quarter.
And the cost to use ratio between goals and the others, obviously, it's got to be increasing.
As a result goals GTB reached a record high in the south.
We will continue to strive to provide an environment, where users can enjoy go safely and securely while utilizing the electronic system [noise].
[noise].
[noise] [noise] [noise] and Allfast body business, which are in the girls space, we aim to become a more attractive ecommerce site for EBITDA by strengthening our sales by agenda and our capitalistic salt products.
Furthermore, we lock them up operating capacity.
It's obvious the M. takes pandey locked and ecosystem by acquiring new users, mainly young people and they encourage the use of other services between nickel.
Rocco fashion did it an opt in June and ops team here with us in creating and Atish on that question a pocket.
Brian It accelerating due to the improvement of Brockton fashions, English by and letting creative content and so with the expansion of online brand sales channels. During COVID-19 race entry we open.
Microsite within a rock and fashion called rectify cirrhotic very encouraging.
Rocky brands to come to our site.
Soc studious initiatives, the total gms amount of the entire African fashion, and the op agenda rocktenn, including rocketing. Each about is another why in Japan.
In addition, the cumulative number of downloads for the free market.
Hop rock <unk> has exceeded 25 million the membership base and expanding because it had robust sales commission in the industry and rock and points Cham beyond and they used and sales proceeds can be used at our this obviously is in rocketing group.
The majority.
The other users a young people about 70% in the tens to our Saudis age group.
In addition, nearly half the sales proceeds from rock them Oh charges to rocketing cash are used to attracting group services other than racking up disk.
This contributed to a string of singing up.
The ecosystem in terms of lost their customer base and the economic benefits.
In.
Our logistics business, we are building a highly efficient end to end the logistics platform, but mix will use over the pull all the data and technology.
Our two main business Lufthansa part logistics, which is making the inbound and outbound shipping as well are the pledge for the March month product.
And I have to add express, which they buy the product.
To the customer at home sort of reluctance own distribution network.
Including a jewel income, which will open next year, we're Hal nine automated labor saving fulfillment center in education.
In addition to the center for the March on we are continuing to invest in fulfillment.
Thank God for our fourth party business.
And the new fulfillment center product in books started operation in its cover at the end over the last month.
Dr Express are hardly anybody thought it is also expanding its business physically and as of September 2020 hour area with.
Everybody covered 63.5% over the population obviously Ben Locke.
Okay experience will further on attended anybody's hobbies, and I suppose non face to face picop anybody options to further improve the convenience for costamare and prevent the spread of the COVID-19.
Furthermore, we put onto.
To combine multiple order in one day anybody in the future aiming to further improve user convenience and anybody efficiency.
The number of much onto using reluctance apologetic has increased approximately nine times since August 2018.
As shown since August 2008.
Thing that shipment volume halt okay.
Fulfillment center has increased about nine times.
We have less EBITDA large number of inquiries from the Marchand and we anticipate the existing fulfillment centers are set to grow to full capacity.
By opening new bed one after another.
We're going to contribute to the SNC, our logistics operations of our merchant and help them to grow their gms.
I've talked and say, you're not Super Richard handle Chris food Gms increases by 35.9% year on year in the third quarter.
Now some of the October.
While the also healthy exceeding 50% year on year growth.
In order to meet strong demand we plan to open new best in Cork soon he is our focus on automating.
Labor saving.
In order to support further growth of our ecommerce business in the future we are continuing.
Turning to invest with aim over improving the user experience and they put her being the logistics efficiency, although each of our margins.
[noise].
Pete DIC business has shown it on nice things, even under our hobby to 19, and they called it turns bracket gross or 45% to wipe away due to strong performance or was that causes and the securities bidding issues.
[noise].
The number of users who use major cities Cibcs Cod bank and the securities is showing high gross body.
Body hasn't Mariano to generate synergies amongst cibcs had to walk back anyway.
Nothing cod, achieving double digit growth in boss their menus and the profit despite to the impacts from that last minute demand to be hogs on consumption tax rate hike in September last year.
Shopping the transaction volume increased and that broad.
From these assets.
That transaction, Bonnie I'm honored that could actually took out the industry about AD hoc Parliament choppy.
You too caught it and it seems that has continued to show negative gross and has yet to be done to P. D V. S 11.
On she has a had locked in Canada has already bottomed out and a declining to some pretty bad gross debt basis.
As our companies I mean, the RPD eight it's hard to be here She's creek to a a heavily impacted by the decline in the entertainment industry.
The restaurants.
On the detail that you.
Two o'clock.
On the other hand.
Justin cause a high usage on E Commerce, we presented by adopting Cuba, which resulted in the device.
Nothing cod otherwise credit the management has elected to.
Accumulation of a high quality assets. The other thing like in DAU ratio all the expense they take to go through asset EBITDA in college and by that I mean.
That then kind of continues to grow above market average EBITDA after becoming number one in time.
Rounds of somebody who in 2017 in.
In fact.
It aged 20 medium holmen back in June this year five.
While maintaining double digit the gross.
In addition, the upturn Carter has and the high customer loyalty and having being lags.
As of Nonbanking customer satisfaction for 11 consecutive yes.
Behind the highlighted all those customer satisfaction.
<unk> customer convenience integrating all the transaction on a smart he.
Sure.
The easily check spending and changing to evolving payment.
Greetings as sales.
Smartphone app.
This high level, although convenience creates customer satisfaction preach did it to stolen business performance.
In the newness.
Hi, Mark Boucher payments, such as E Commerce, where the increase as we add the offering encouraged to have that usage, which greatly expands the cashless Mike.
Dr. In Canada, it'd be kinda, most used to create to cod boss online and offline and as a market the shall retire.
Not increase from the current 20 project.
Really to continue to expand our business plus the kovykta to increase shareholder value.
This is the third quarter financial results pulled up the bank.
As a result of city expansion of the business and used by more customers.
Operating revenue increased by 5.8% while life. However.
However, open.
Operating income was flat.
Due to cost related to relocation expenses.
That's been bank.
The number of our online bank in terms of number of accounts.
Currently we have overwhelmingly more accounts than other online banks.
And the number.
Demand continues to grow double digits why you like even after this scale.
As of the end of September.
The number of accounts was 9.45 medium.
And we have acquired more than 1.5 million new accounts all but.
Over the past year.
Studies and why.
So many customers are planning to open an account.
Yes.
The goal of maximizing on the rock that ecosystem.
And died at the effect of our group synergies.
Among the application.
Pumps, all the new accounts.
So the issue of application problems, they're acting group east increasing leaching, 66.5%.
Groups. You know these are also Betty effective India accounted leakage. So this we did have 10 securities hold.
Money breach.
The 40 to bonds of money, but each exceeded two treaty on yen in August.
Money bridges deposit balance has doubled over the past year.
And to continue to grow rapidly.
More and more customers are using that same band.
Asia account adds there may account for daily transactions.
The number of customers receiving salaries by erecting bank has increased sharply by 51.8 plus into law.
The number of customers, who use direct debit.
Thank you pay for water gas electricity, various taxis and credit card usage is increasing by 47 point the lump us into my life.
Due to the impact of Kobrite.
Many banks are shifting to own right.
Especially.
For additional banks as they are beginning to put more focus on online banking.
Let them bank will face fierce competition online banking, we're got them Bank has historically succeeded.
However, we feel it's a great opportunity.
We will continue to grow that same banks business by providing convenient services to our customers by leveraging experience in Internet banking and group synergies we have cultivated sofa.
Okay second it is has the most the number you have cancer for two consecutive years and the growth rate has been the highest in the industry.
She's 2070.
We have provided our investments subs that they use is locked in point to attract investment business.
Here is the third quarter result, Oregonian securities.
We recorded double digit growth in both sales and the profit as a result of increased trading volumes of domestic and U.S. stocks.
Number of workers has grown rapidly in the last few years due to the reluctant ecosystem.
In Twentytwenty, we achieved about 970000, new accounts 1.6 times that though is to be a securities.
Approximately 60% of the new customers, India, Saudis, well younger and that unless you're has increased significantly.
Now I'd like to Echo system is being used to attract the younger generation, who had worried about the future and starting to build the assets.
We are providing services that take advantage of Lupton group of stress such as point investments investment Trust regular savings with.
Thank God and our country gauge with directed bank.
As a result.
The basement us as its size and the number of holders are the highest in Japan.
Your stock trading is also increasing.
The number two Andexxa in September became 14 times for all of that.
Ravi this year.
Oh pretty tough our via their smartphone trading up which will just in April.
Nothing Securities will continue to leverage the raptor ecosystem to be the most said if these securities for a wide range of people from dinner consumers to day traders.
Nothing niska outcome will not have any okay. Okay. Okay.
Mandy discount flux in the whole cable assemblies overtime.
Rocked Asia has vision at other full lineup of life, Dell and pet insurance.
Furthermore, we establish that general information center to improve convenience.
By providing us onestop salaries.
Operating income for third quarter was 1.8 billion yen, having gone through large scale natural disasters, we actively utilize reinsurance to manage risk as a result of operating income increased by 2.4 billion yen Y O y.
Well.
Well the gravity the synergies where the rock that ecosystem.
We offer various products and services in collaboration with rock that each of our for example extended warranty insurance and free pet insurance and many others.
Furthermore, we corroborate with rock them bank to offer Asia.
One other for mortgage users.
In addition, we develop the Japan first the fraud risk segment that fire insurance, using Roxanne data, which lets cover the newspapers.
We started a new program, where rock them points can be collected when purchasing insurance, which is highly evaluated among rock than members.
We are implementing measures that are not bound by industry. Customs. For example, we are developing area it system, which support agencies, where they are today all accident. It is some futures.
ARIA Jeremy what you can do for me.
I can provide your schedule management.
He rating insurance product proposals and so on.
Great area.
Hi, She has some time for the next presenter, let's wrap up.
Thanks area, we will continue to work on new innovations with our unique Rocktenn style.
Cheddar affirmative data, we offer under the payment those.
Those are real world of businesses with a very large user base, San Martin network, and our key businesses in the integration of online to offline in the future.
We provide a one stop service from promotional for the other two payments.
After the third quarter, a Muslim network reach 5 million. In addition, the number of a sport that can use weaker implementing on rux than pay up is 1 million and the number of available train station is fivefold and nationwide.
I couldn't pay is expanding as harvest to use.
Balius life sales many clients in the users are the locating a unique values such as reluctant pints deep data analysis, and the provision of safe and secure systems.
And then in bitumen, where cashless payments are becoming more common throughout society.
I couldn't pay occupies one of its central position and Dave is publishing a solid position among various payment services.
Although the end of the September traded Twitty, the number of monthly users are blocked and pay including online and offline has reached 50 media.
On the other hand payment.
Payment services play a role in attracting users from the offline channels to online reluctant ecosystem over the.
The new rock than members one name for comes from Roxanne pay me the services.
We started linkage between locked in paying a suite.
In may and one of the upcoming feature is charging sweet Guy was locked in points.
Correct and post can be used by the most used to public transportation in Japan, the value of our points will increase further.
In this way so obviously in the payment of business also.
Play a role in enhancing the attractiveness of the recruiting group.
We will continue to increase our presence in the ever expanding Chesterfield.
Oh.
So.
[noise] Oh gosh.
Yes.
Yes.
Just six months after commercially dodging the world's first cloud Native Fourg network, we launched our Fiveg service in September.
For 2020.
Compared to conventional network.
This free virtualize technology reduces capex by at least 40% and Opex by 30%.
As a result, we have realized an unlimited data plan that meets our DARPA capacity demand.
Them of the Fiveg era at 2980 and per month with no additional charges from Fourg.
This is a 70% reduction from other comparable El pen.
We also recently launched a zero campaign that provide.
Administrative fees.
Same exchange fees.
And p. transfer fees et cetera, all for free.
Our goal is to democratize, the mobile industry with affordable pricing.
As you can see.
Not that mobile has been highly valued.
It it by our customers.
It is not just our low price and an easy to understand plan.
Customer satisfaction is also high in terms of throughput.
Quality and network stability.
We aim to deliver this low priced unlimited data.
Communication experience to customers through our own nationwide network as soon as possible.
Our plan is to achieve 96% population coverage through our own network for Fourg services by Middle of next year about five years ahead of schedule.
I mean, the cumulative number of immuno application has now exceeded 1.6 million.
The number of applications per day.
It's steadily increasing.
This is due to the success of a simple online application process and our customer at.
Physician strategy leveraging rocktenn ecosystem.
Policy changes that make switching between carriers easier.
<unk> is expected to further boost the pace of our customer acquisitions.
As divesting coverage area expanse.
Here.
You can see capex levels higher in the third quarter.
This is due to the front loading of base station construction.
Oh, the PML side base station related costs increased due to the accelerated buildout.
Enrolling costs increased due.
Due to the increase in the number of users.
Now one year free campaign targeting 3 million people will come full circle from April 2021 grams.
Gradually increasing revenues thereafter.
The mobile business is now one of the foundations of thereafter.
You'd go system.
Alongside E commerce anything to add.
And expected to boost other businesses.
The mobile business enables frequent and long term contact with the consumers.
We believe it will contribute to improving LTV.
Increasing cost.
And even if oil heat to direct and ecosystem and encouraging crossties.
As for our global strategy, we have taken a first major step towards monetizing our immuno their work overseas.
The cloud service industry grows rapidly across the world.
Our goal.
After four RCP cloud network to become a major pillar of earnings for their writing group.
For more on RCP and how we work here.
Here's a summary video.
[noise] assay ebay is the record same communications platform a world first fully virtualized cloud.
His idea of Fiveg ready mobile network platform, the carriers governments or enterprise clients looking to deploy a flexible reliable cost efficient and secure mobile network build with open ran standards assay pay is not reliant on any single product technology vendor.
It uses a so.
Oh boy centric approach to network design and operation to deliver maximum flexibility scalability resiliency and security RCP strives to automate all aspects of network design deployment operations supply chain maintenance and support every.
Every task is king.
Hopefully reviewed and where sales of all its automated.
This innovative approach to network architecture, and automation allows the implementation and operations of a mobile network at significantly lower cost, allowing clients to focus on immersive streamlined and highly differentiated services for their customers.
Our sales.
He is tried and tested through use of the technologies that are now powering record 10 Mobiles network in Japan, which launched full scale commercial services in April 2020, as a next generation mobile network. We can look to record 10 mobile as a model of how advance virtualization automation and orchestration combined.
Pay with private cloud all come together well being built on the fundamental principles of safety and security. We believe our CP is a compelling alternative to legacy proprietary networks and the industry leader for safe secure and agile mobile networks of the future we're excited to be delivering the bracket.
John in communications platform to the World.
Hi, I am Terry can mean, the chief Technology officer for rocket on mobile.
We have started the journey with a carriage to explore innovate and disrupt.
We.
Techy to global first in this industry.
Unrecognized significant value in cost operation and performance.
Most importantly, all of this was done based on trust resilience and secure platform.
Open signal recognized.
We have it on mobile as a global leader for best Fourg experience and availability.
Rocket and has a strong heterogeneous network solution that we have deployed.
And we are following a very aggressive densification strategies at.
The areas needed.
Since the launch.
Launch of Fourg on April eight Twentytwenty.
We haven't focused on three key pillars.
One is about.
Coverage coverage, both indoor and outdoor.
Second is about performance improvements, making sure that this network is able to handle and sustain that capacity and throughput needed for our customers.
No worries about stability and making sure that the reliability for this network is where it's needed.
I'm glad to say that our radio technology housing.
Has increased our single site coverage by 30%. This obviously have resulted in a better national coverage with less site counts.
We achieved this by establishing the world first innovative opened radio design.
Well, we have integrated more antennas work.
For capacity.
More power per site, which offers better coverage. The radio innovation is only available on rocket their network.
Here you can see examples of our latest radio units supporting a very strong radio deployment.
We have accelerated our deployment through our rocket an ecosystem.
Solution simplicity and process efficiency.
Allow me to shed some highlights on some of these key.
He admits.
In rocket and networks today.
To activate a service it's only takes three minutes.
This is a massive breakthrough.
In Japan.
Where traditional service activation and provisioning takes hours.
We have automated cell sites commissioning result.
Melting and four minutes for Fiveg sites, an eight minutes for Fourg sites. We think this is a massive breakthrough in this industry.
We rolled out new features in a matter of days not months.
Our engineering team.
It's 20, x. smaller than a typical telco enable us.
As to achieve productivity efficiency and eventually pass these savings to our consumers.
The cloud architecture brought further redundancy and resiliency.
In our platform.
And on Fiveg innovation.
With the launch of Fiveg on September Thirtyth Twentytwenty.
We.
Have deployed sub six gigahertz millimeter wave radios.
And introduce new Fiveg device the rocket I'm big.
We also introduced you to new virtual edge server types supporting the entire Fiveg workloads and rocket then.
The virtual open Ronstadt does now.
Now fully containerized.
Deployed and rocket and communication platform RCP.
This is considered the world first fully containerized fiveg.
Total opened around stack.
Then the result of this is a much higher performance better scalability on a much more improved agility.
In our network.
The continued rise architecture has helped us to significantly.
Reduce in our network the function size and bring up time to activate the services.
In addition, I want to highlight that the cloud native Fourg architecture enable this move cost effective path.
I'd rocket on network requires softer upgrades no longer about hardware upgrades.
Allow me to highlight some key aspect of our Fourg and Fiveg synergies.
Number one our radio.
We are able to reuse all of our existing sales side assets. This is both logical.
Different physical infrastructure.
Our core network we started.
By reusing, our none Standalone fourg evolved packet core.
That will be eventually replaced in early Twentytwenty, one with our cloud native Standalone Fiveg color.
Our edge.
Only two hardware types, which is the world first and our cloud.
It's based on Kubernetes, which enables us for maximum elasticity.
Thank you and have a nice day.
Oh.
[noise] data needless to say massive amount a little high quality data Oh, paramount importance in the days or other but I've been thinking about fee.
Nothing has over 100 at the median reluctant ivys under a huge amount of data associated with that.
Not only do we have data from London's Internet services, such as an update each about.
We also have an increasing amount of offline data generated from youth in offline stores and services, such as Dr and card lock them pay and rough Eddie.
This day.
[laughter] range of data is a major major strength and differentiating factor for developing a lot of what I was doing business.
On the other hand coming for the party kooky regulation is sales adds up that for these or other markets.
However, most of that happened there.
But is high quality first party data link to recruiting I'd, which does not depend on third party cookies.
We see this regulation as a lover favorable opportunity to take advantage of our huge advertising inventory.
Here is a comparison with.
Oh, sorry, I misspoke brought foams very thing about this the other business. Our major advantage is the quantity and the quality of reluctant I'd, especially the three I didn't the verification by our credit card business and online and offline consolidated parts of data link with.
Again I'd.
[noise] utilizing these data our other revenue is growing particularly for DRAM manufacturers as lapping each but.
As a result, despite the slowdown in the internet advertising industry as a whole to net.
Gross productive other sales grew double digits year on year.
Our other businesses can go more by a such a big asset growing E C marketplace, Andrew Hughes data we own.
Oh.
[noise] [noise] [noise].
[noise], we've got global trend, though refraining from going loud during the cold 19 pandemic.
Number two we use a reluctance constant cibcs has increased the least country compared to the p. or before was up on living.
Oh, the number we use of increased the combined revenue overreact in Kabul locked in TV and luck than Vicki increased significantly in the third quarter.
Especially for Lepton TV, we are expanding the provisional a remote controlled what on the Ilo diet. If that's if there was a lot than TV platform.
In partnership with Smart TV manufacturers to further expand the number of users.
Three we have was the saudis to about 90 medium household in 43 countries in Europe, and we will continue to aim to expand.
[noise] Oh, so react if the question of how do you think will be.
We haven't yet the Betty strong and unique ecosystem I think any fight fees, one bad ideas and some.
Okay Fine program Yeah.
10.4 of them both had extremely high finding what they told me due to its easy Oh, I'm this timing accelerating and using contributing to a full service real yancopoulos <unk> cost and I saw the sales point accelerate the most prestea.
Both alpine satisfaction and find that made me happy.
I couldn't find shrunk mboe baum for all of them.
Hi them all by introducing a chunk of the SP a program eat for Mod cost Hughes between businesses, which contribute to it shouldnt use the ugly just.
<unk> program and have little I'm embarrassed to accelerate well off point, then she'll thing on it you by using multiple African side the fees.
As of September 20, turnkey the cumulative number of planes issues. So far is that the fans history exceeded two tree point I'd.
As a result.
Cross your Threeq <unk> Mendez, using 240, I react inside the seats have exceeded 70% and the total number of active usage fit to increase by double digits compared to the previous years. In addition, best fits their acceleration not only your cross sales of privacy.
Yes, hi, Cathy such as scrapping it you, but that's kind of caught point cost of living.
Most yourself you combination like Xtend thier, let's sit there that's done garlic and reacting each about his own their life.
That's a good Alitalia S T program for a large cross here.
You know where I guess, how does he is not just you may call increased sector.
That's a good point can be naturally I to me it just by using rocket dance clumping and privacy is excused MTV Guy.
In addition, he had been able to acquire you can use it for acting through African mobile vitriolic.
Are you able to and those small body is they have already started using I suppose how to pace up rapidly. So it's expected that and though are really going to come from Ali accelerate Javier.
In the future he expect the mobile business they contact you to their rocketing ecosystem.
In the core of our new member States strategy. He will continue to take studies niches to aggressively expand that I could think ecosystem.
Oh.
[noise].
Awesome.
Rocktenn group treat informational security as one of the most important operational teams.
Our vision is trustworthy.
So Ravi for society market customer business.
Now add employees.
We always remind ourselves that 100 minus one equals zero.
Or the class we have cultivated can be destroyed immediately by one any unexpected instead.
We.
Pockets in mind, we walk day and night to ensure continuous maintenance and improvement of informational security OCC Ross rock there.
As part of our COVID-19 countermeasures Rocktenn group immediately moved from a trusted office and.
Turning to walk from home using a wider variety of productivity tools.
I am confident that we are providing all the employees with a comprehensive voter walk space.
Rocketing engages in various ways to.
But then on T. security in the face of any threat.
Our information systems on the pharmacies are protected in multiple ways by employing our own specialized cyber security defense team.
We'd have to take a look at our different days to pick and choose the best of breed.
Deep security solution components, biter, Leah and integrate all of them with our vendors will okay.
Currently lows around the world are being published and revised regarding the appropriate use and protection of personal information and the price.
<unk>.
Directing groups Bcl binding corporate <unk> was the first from the Japanese company to be approved by the E U or three keys back in February 20 headwind team.
Quite a lot more to enable users to review the data that.
Even have agreed to share with us there.
Development of the use our consent rights management platform you see our EM is in progress.
Roxanne is engaging in group wide initiative to respond to the legal regions, including Europe.
They GDPR and California CCP.
Building on these expenses, we are preparing in every way to promote promptly respond to the 2020 amendment through the act on the protection of personal information in Japan.
Oh.
[noise] wrap their ecosystem is impacted by and data from more downstream DSMC.
From retail to finally, we leveraged data to boost caught them I wish him a lifetime value of our customers.
No customer acquisition cost and high LTV, having a key factor behind the success of rock band services that job reacting card.
Our strategy centered on Budinger comprehensive customer didn't perform to grow out.
Most recently wrapped immobile.
I mean that.
Yeah, I have established platform program diabetes.
Yeah, I like to highlight three products in three years.
Hey, Buddy all data platform common DNA forecasts amount of money and I with Im sorry for asset management.
Rapid antibody is a franchise there buffalo.
Sure I think with them.
No more than 70, it's everything interacting with them, we have integrated 43 services in one day, it's possible we single rack Dan I'd do.
This is exactly what allows marketers to create cross services across rock the acquisition.
Based on this rich data.
While we build a holistic understanding wrapped a member or customer DNA.
How somebody nay describe each customer with more than 4000 structural attributes.
Going beyond the top Joe attributes, we predict keyboards, a lifestyle that just owning cars or dogs, and we generally capture 10% to 20%.
Oh, that's glacial in Japan.
Leveraging just understanding what customers, we personalized services based on product called <unk>.
Study either product a personalized messages.
For example, you wrapped immobile, we show a different message to our customers depending on whether they.
And to wrap their network or Katie de am I running area.
You have to acquire new customers, we combine study with Iris.
He is a lookalike solution the financial customers.
We successfully implemented more than 1000 personalized campaigns generating more than 1.2 million crossties.
Including 400000 amino restoration.
This is how we are growing our equity style.
Last but not the least we truly believe the importance of custom pricing. So we want to leverage and data with customers benefit at the top of my mind.
Oh.
[noise] lots that have implemented measures to give consideration to the safety of our employees and their families. During COVID-19.
So as we set up a task force team at the headquarters and implement in 27 specific infection counter measures including or.
Body temperature measurement screening in the office and answering social justice in our offices.
Not only in Japan, but we implemented a similar measures about 250 offices, both in Japan and overseas, including the United States Asia, and Europe, and we have all been considered constantly collaborating and sharing it.
Not condition.
In February of this year, we quickly switched to working from home and the wire about 78% of employees, excluding things that have been working from home until now.
Excluding strategic investment business and investment business operating income and profit of course.
Promoting her fault.
Full time employee has about 60% to 70% higher than in Q1. This year. The cumulative total per spacing employees in Japan has reached 2339. Although Q3. This is a situation expected at the end of the year.
And the cumulative number of cases.
Nominated project has reached 390 I saw in the graph. This has continued to significantly to the strengthening of the kaizen culture and business growth.
In addition to improving productivity, we are also focusing on improving quality.
Buxton, we continues to be a measure that nipro.
The only thing school on index used to evaluate and improve the customer experience.
This NPS score has improved by 9.1 point from Q2 2019.
Compared to our competitors, even though we are operating under the COVID-19 pandemic.
This is the result.
Total promoting quality improvement activities and striving to improve high quality service to our customers and the number of plan quality improvements activity. In 2020 has progressed steadily to 631 and that then we have formulated the compliance programs tailored to a wide variety of businesses and with.
No we implemented 100% of the training that we carry out twice annually and we review the content each time to make it more effective.
Okay. So system itself is constantly being improved the number of Istent is decreasing and major prevention on Korea accounts and.
The old created and implemented.
Finally people and organization locked in one the third place in 2019 linked aim top companies survey, which ranks companies, which people would like to enter.
Similarly in terms of popularity amongst new graduate and the internship in 2019.
Be that students were really happy to go to category.
Nothing ranked first in the sales growth area and a third in Kosovo rank.
This is due to the implementation of a back to basics project, a human resource management strategy from 2016, we aim to recruiting cold weather thing.
In retaining existing human talent from all over the world. So.
Especially we have worked on 34 measures such as introducing one the one fees but matches.
And the revising the evaluation and compensation system and expanding training.
The Latin group, which was founded by two people in 1997.
Our own into global company with more than 20000 employees at the end of December 2019.
It's more than 5000 are working at foreign countries.
Among them, we highly value and the partnership and continue to make a fool to any Harris the culprit philosophy at the time of our founding.
Oh.
[noise] work together is wrapped as new slogan.
We are close to the outstanding philosophy of empowering people and society through innovation.
Then we have a strong desire to work with our partners whose.
As bracken looking into the future.
Well, what a path here.
Weve revised at record 10 group called the ethics to send in the elements of society and human rights we.
We also established recruiting group sustainability policies and I'm committed to important issues such as.
For environmental protection, Chemo, right social activities and the governance why.
One example is the fact that we've joined Ali hand, it last year.
In October 2020 rocket downwards satisfied as an it equal first company by the Ministry of the environment Weve.
We promised the minister of environment too.
Part to improve our various efforts led to environmental conservation activities.
On the social side.
Turning to COVID-19 polemic, we provide a buyer support to employees regarding the maintenance of physical and mental health.
Similarly, really working together to touch this difficult situation.
While supporting record has been as partners to income at 19.
In addition throughout their first the tax payments and a record 10, such donations wrapping he was as we're able to donate a total of 1.1 billion Japanese yen to people, who had a hard time, Digicore 90, and a medical professional.
Right. Good teams efforts and the proactive stance on information disclosure had been highly evaluated and the rock Tenns major easy ratings are improving year by here and we've been selected the cost either of these indices as shown in the slide.
In terms of corporate governance.
No world with Alex's reports and they discuss issues regarding seasonality I think it is on a quarterly basis.
The board of directors of recommend consist of a photo of seven directors, including <unk> outside directors.
With a focus on outside directors, who are highly independent and experts in various fields.
Both our base business execution from an objective perspective, and freely and openly hold bonds face any discussions on management.
Yes.
We still like the group actually was certainly those in the South Dakota level.
Revenue grew by double digits year on year.
He wouldn't during the pandemic wait took advantage of all the things I was our diverse businesses and the locked in the ecosystem.
Non-GAAP operating income decline.
As a result of aggressive about protein best.
The immobile and logistics.
Excluding profits and losses from mobile or the six and the independent businesses.
That was affected by a marketer fluctuation due to the pandemic pro.
Profits have increased significantly.
Here is a waterfall chart of.
That was impacting non-GAAP operating income a year on year.
Fintech all why increased by 5.8 billion yen due to the impact all of the new normal on the Castros trends.
Locked in each other.
And other business is benefiting from our advancing they sat transformation also a boost.
Dr in profits.
On the other hand, the negative impact of course, it's 19 pizza business is like locked in trouble.
Pushing down or why by 3.2 billion yen.
Losses in the mobile business is continuing to grow due to upfront investment.
The coverage area is steadily expanding.
Due to the aggressive base station construction.
Going quad, we aim to increase the number of users by improving the quality of the communication services, we aim for prosperity immobile as soon as possible.
But larger scale investment such as mobile as I, just don't just fixed accounting.
So we issued subordinated bond in November.
Adelaide hundred 20 video in yen.
In addition.
The subordinated bonds has been satisfied as captain.
It's by three rating agencies up to 50% of the totality shops along.
This was also a positive factor in our rating evaluation.
The last 10 group is investing was aggressive for future growth.
At the same time, we add key.
Riding Fiato sound glass in mine, such as exit and sales of noncore businesses, including overseas businesses.
So the business and investment portfolio is continually being reviewed.
In 2019, we sold our minority holding.
Keep in interest rate.
We also completed the sale of our driver in the second quarter.
In addition.
The unprofitable biological oppression and the market place ecommerce business. This is the U.S. and Germany Wassa three growth.
And we conducted financing utilizing our lives to shares.
As a way of raising funds without increasing interest bearing debt, we conducted color financing.
Effective in discourse post quarter.
Using the dilutive shares we hold.
This was a school in a form four filings in the U.S., we raised about 75 billion and.
But on this deal.
I'm going to overseas business is callable viber and Vicki achieved the profitability in non-GAAP operating income in the South Dakota.
This was due to lighting demand under the new normal environment for demo.
We focused.
Well the organizing our business portfolio.
Investment in the Mumbai analytics business will continue.
But we will strive to grow core businesses, such as domestic ecommerce underfunded.
We will also promote a disciplined financial management by focusing on selection.
And the concentration of businesses.
Thank you for watching as.
As you can see it often has strong leaders for each of the businesses have worked together to enhance the ecosystem.
Looking ahead, we continue to face challenges from the pandemic, but.
There are also opportunities fund the ongoing digital transformation.
One area of focus will be how we expand the value of our marketing ecosystem by encouraging cross Hughes of multiple services by our new users, including our mobile customers.
Please feel free to reach out with any questions.
Thank you again for John.
No.
Uh huh.
[music].