Good afternoon. Thank you for joining Rakuten Group's 2022 full year and fourth quarter financial results meeting. We have disclosed the latest consolidated financial report at 3:00 A.M. today. You can view this data on our corporate website's page for investors, along with the presentation document used in this meeting. At first, Mr. Mikitani will give the greeting. Miki, please go ahead.
This time again, online streaming, I would like to make a brief explanations through the online streaming. To FY 2022 fourth quarter and FY 2022 full year consolidated financial results of Rakuten Group's to be presented by myself. Starting from summary. First of all, domestic business and overseas business, I would like to explain one by one.
The domestic EC GMS, so globally, the COVID seems to be over, so the EC companies have been struggling. However, our company is plus 12.3% YOY, and this is about JPY 5.6 trillion. Particularly Rakuten Group. We are very neutral. In other words, during the COVID we were not able to travel, but the e-commerce business performance was pretty well.
Once the COVID is over, because people started to move and the Rakuten Travel and Rakuten Card business performance gets better. We have a quite well-established ecosystem. As for Rakuten Travel, comparing to 2019, plus 12.9% YOY. Even comparing to pre-COVID, we have been growing our business in travel. The subscribers, MNO and MVNO in total 5.06 million.
I will elaborate mobile data. Rakuten Card shopping GTV drastically grew and the YOY basis +25.8%. This is JPY 18.2 trillion we have achieved to that level. It says the Rakuten Card shopping GTV, but why do we have the Rakuten Securities general accounts? This is the card issuance.
The number of card issuance. It's not GTV. Our card issued is +11.9% YOY. That is 28.08 million. Rakuten Securities general accounts +21.1% YOY. Non-consolidated basis, this is the top growth rate. Rakuten Bank, the number of accounts is 13.39 million. That is +13.3% YOY growth. Last year was 25th anniversary of our company.
In 1997, Rakuten Ichiba started its operation. From there, cumulatively on average every year, CAGR +56.9% we made. Last year, as for GTV, 14.6% grew we made. 26 at the term in consecutive manner, we have increased our top line. The global GTV, +39.2% starting from 2000, over 23 years it is growing. Last year it was JPY 33.8 trillion, YOY basis, 23.0% grew. The presence in Japan and presence in global market. Based on the consolidated revenue among the EC internet companies, we are overwhelming number one.
Even if we look at ourselves from the global point of view, excluding U.S. and China, we are the revenue and the scale-wise, we believe we should be number one. Now the still the economy is unstable and the global point of view internet business, including advertisement revenue, had been struggling. That's what we heard.
However, Rakuten, mainly on the shopping and then the consumers, we are very close to a consumer's wallet. The last year, Q4, it was +16%, and 2022 revenue was JPY 183 billion. We are about to reach JPY 200 billion. We still have a room to grow. Who is supporting this is a Rakuten ecosystem here in Japan. These are the ecosystem.
Well, the number of unique user is 39 million, in a month more than 39 million people have been using our service. This is +11.2% YOY. Those the loyal customer using more than two services is 75.6%. One of the factors of this is Rakuten point attractiveness, and you can save it, and you can use it, and you can have fun.
Throughout the year, about JPY 620 billion Rakuten Super Point was issued. This elapse rate is about 2%, means everyone is enjoying using this point service. One the aspect of this is SPU and Rakuten Mobile now joined the SPU, and it's a bigger growth factor today and average growth the rate is +22%.
As an ecosystem, we have acquired a strong, powerful ecosystem here. What about the membership value? What about the membership value? So far, we have been showing this membership value data as of last year. It's about JPY 8.3 trillion, and this is +28.6% YOY growth.
The membership value, how do we calculate that? User generating the profit current value, LTV. From LTV, we exclude the CAC, and the number of active users will multiply to that. The customer generating the profit to be calculated into the present value, which is about JPY 8.3 trillion on a profit basis. This is how we calculate membership value.
The, these are the membership value is getting closer to market at a cap is what we want to do. Particularly mobile user, MNO subscriber, but contribution is becoming great now. For example, Rakuten Super Sale and the GMS from MNO subscribers is about 25%, getting closer to 25%. This time, Rakuten Mobile, they joined this SPU.
We have to be aware of that, and the customers understand that. Because of having this as a system, they joined, MNO subscriber, which is 22%, this is fair. Economically good pricing plan, and then ecosystem started to work in this arena. About the paid subscriber, the growth accelerating.
We paid back the point and now it's finished, so now our users are paying to our subscription. As a result, as of end of January, actual number of paying subscriber is about 4.5 million, and comparing to year before, it's a +294%, which is 4x.
New MNO applications. Up until November, we had some termination period for the free use, we strengthened the ecosystem. In December, 5%. January this year, comparing to the year before, +16% growth was made. It shows a steady growth and the Rakuten Mobile users number is recovering steadily. The global KPI, global GTV is +23% YOY and JPY 33.8 billion. The Reward, this is a cashback site.
This is 5.6% growth YOY, which is equivalent to $12.07 billion. This is another performing thing and then brand recognition. I will show you the TV commercial which was that shown at the Super Bowl. I will show it later. The total registered users +8.1% YOY.
The Rakuten TV, mainly in European market, and the total users is 70 million, which is +48.3% YOY. The contents distribution to the global market, which is Rakuten Viki, and the number of registered users is 66.8 million, which is +27.2% YOY.
The Viber, from economic point of view, because of the Russia-Ukraine dispute, this became the deficit from the profit. The number of registered users is still growing by +6.4% YOY. Let me go one by one. The first one is Rakuten Rewards. Revenue.
This is JPY 990 million, and this is +13.3%. Non-GAAP operating income is JPY 62.8 or the +12%, so it's showing a steady growth. We are aggressively in terms of the marketing so that we believe we can grow profit some more extent. Now, this is a kind of ads video. Rakuten America, the Rewards Super Bowl, this was shown there, and this is the TV commercial. On YouTube, about the 30 million, the view was made for this other video, so I would like you to enjoy the video.
Save by getting cash back with Rakuten? I was like, "As if." I was like, "Why didn't I do this sooner?" You can get cashback on all the fashion at your fave beauty stores.
What the?
On pretty much whatever. Who put that there? In conclusion, you'd have to be butt crazy to shop without Rakuten.
Aren't you a little old for high school?
What? Rakuten.
Okay. The Rakuten brand recognition is being accelerated in Taiwan and Europe, about the above the 80%. In the United States, close to 70% of the people know Rakuten brand. Maybe with this TV commercial for Super Bowl, we believe this number will be improving.
I would like to go deeper into different business segments and talk about the performance. Starting with internet services, there are four segments here. Domestic EC is first, JPY 797 billion is the revenue and operating income JPY 95.6 billion. Very steady.
Doesn't mention the unit, but it's one billion. Minority investments. Last year, there was this major profit coming from investment. Because of the market condition, it's a deficit of about JPY 10 billion. Minus JPY 44.6 billion year-on-year basis. Practically, for internet service segment, things are going quite well. Domestic e-commerce GMS JPY 5.6 trillion year-on-year basis +12.3%.
In the near future, we would like to reach JPY 10 trillion. One major measure for that is Rakuten Mobile. Domestic e-commerce financial highlights, let's look at the revenue, about JPY 800 billion in EC. It's going to reach almost JPY 100 billion. This is 36.6% growth year-on-year. For the total amount, GMS, although we have not announced this publicly, we are actually doing better than other companies.
One key factor is enhanced loyalty. I think we have this threshold for free shipment and also enhancement of services. Among others, we have paid or made efforts to make improvements for different sections of our business. Fashion, for example, Rakuten Fashion, we have been exerting a lot of effort in.
Those are one of our competitors. Compared to them, we are about 2.5 times as those. We have surpassed JPY 1 trillion already, the growth rate is 10% or more year-on-year. Very steady and domestic EC. In various sectors, all e-commerce is to be carried out or handled by ourselves. We have core businesses as well as growth investment businesses. T
wo major categories. For core business, we have Rakuten Ichiba, Rakuten Travel, and others, cashback, Rakuten Rebates, and GORA. Investment growth in the businesses includes Rakuten Seiyu or Netsuper and Rakuten Rakuma and Fashion. When you go into the details for the core business portion, you can see a steady growth here.
On the other hand, when you look at the growth investment business, it's actually an improvement of about JPY 9.1 billion compared to before. We are growing what has been growing. Also for deficit-making businesses, we're turning them into to the black.
It is about to reach JPY 150 billion in non-GAAP operating income. I think there is room for growth. 2020 sales is JPY 183 billion, and that is +15.9% YOY. FinTech, Rakuten Card, Rakuten Bank, securities business, as well as insurance business, they are making improvements in operating income, so very steady.
On a per segment basis, +10.8% year-on-year. The key highlights include the following: Rakuten Card issued shopping transaction volume, and it is going to reach almost 40 million accounts. Rakuten Securities also doing quite well. Rakuten Card Triple Three is what we are trying to realize. Card issued 30 million, shopping GTV JPY 30 trillion, also GTV share 30%.
I think we're moving steadily towards those targets. For 2022, non-GAAP operating income for Rakuten Bank was, as we see here, JPY 338 billion. Operating income is as you have seen here. For Rakuten Securities, operating income JPY 18.7 billion. Insurance company also general as well as life insurance doing quite well. Moving on to mobile and.
We started the mobile business from 2000, and that was mobile business player, and we have been aggressive in challenging to the industry. What we have done so far is, unlike other companies, we used mainly software and a fully virtualized environment, means software-oriented business. In other words, the mobile network to be managed through the internet, via the internet.
That was the basic concept we started off with. The next one is parallel speed. We set up, build out the base stations. It was kind of the financial burden was very heavy. Our initial plan is to spend seven years to build out. However, it was accelerated for three years. With that, the future CapEx will become lighter than before.
Then virtualized nation technology and receive a reliability from the global market in that context. The customer base to be secured, and we initially conducted a free of charge campaign to capture the stable customer base. In other words, 2000-2022 is a period to establish a foundation rapidly, and this year is a testing period.
One of the things is we have to lower the cost and then become lean, and then ultra-efficient structure to be established. The second one, and the roaming. The only 4% data is the roaming, but there is an issue of handover. Then it incurs a huge cost. Therefore, toward the end of the year, we would like to significantly reduce the roaming cost.
The Symphony, we want to strengthen Symphony. The Amazon, well, their revenue is mainly from the AWS, just like that Symphony we want to promote. The coverage, it is 98% plus, so we want to get it closer to 99% or over 99% of population coverage. With that, the coverage, so we would like to improve our financial status in a healthy manner and to strengthen our ecosystem contribution.
A big initiatives to that end is the conventional mobile players are more inclined to TV commercial, in other words, mass marketing. The mass marketing method was a major methodology for the advertisement. However, we actually switched our marketing toward internet, and so far we do not see any negative impact, rather it's positive. Also referral user to introduce different user.
For this referral, we will, or do some referral marketing, paying fee to that referral. This is a new challenge in the global market. With that, in 2023, we want to establish a profit structure. This is how we position 2023. After that, the coverage, well, we almost cover the wide area, we want to accelerate about the coverage toward 2024.
And then 2023 is to improve the cost structure drastically and also become use the efficient internet marketing and also ecosystem synergy to be strengthened. To be specific, we started this business from 2000 and building out the base station. In the past three years, it reached 52,000. Given the initial plan, 47,000 was the initial plan.
as of today, it's about the more than 50,000, but toward the end of the year, another 8,000 base station will be built out. We would like to have heavy users because they would contribute to our ecosystem more than others. the currently our population coverage is 98%, so we want to increase it up to 99.2% or so before the end of this year.
This is about the roaming traffic volume, and today it's about 4.2% or 4.3%. that 4.2% of the traffic is using other companies' roaming network, and we want to reduce this maximum by the end of December 2023 so that we can reduce the roaming cost.
Other cost to be drastically reduced throughout other initiatives and the CapEx. We've already, the build-out is almost done. Once we complete it and toward the end of the fiscal year, the monthly operation cost to be reduced by JPY 15 billion, per month and more than JPY 180 billion per year cost would be reduced. That is our plan. We do not do anything drastically.
What we have been conducting so far, for example, Rakuten Ichiba or Rakuten Card. We have been working on efficient things, and then with that efficient initiatives, we can reduce the cost and we will be able to generate the profit. That is how we would like to move forward. The cost reduction factor, for example, the CapEx or the build-out, the cost is now already down.
We have been transferring our people to support this. Because it is settled almost, we will transfer our people to original places so that we can reduce the overall outsourcing fee as a Rakuten Group company, also the roaming cost reduction. We still have MVNO, but we want to migrate it to MNO. Also the shop cost, we want to make efficient the shop operation, optimization of the shops.
How much CapEx did we spend? It was about JPY 300 billion annually. This year, we will spend the same amount. However, from next year and onward, it will become JPY 150 billion. The two years after, JPY 120 billion, that is the current plan. As a result, comparing to other players, how much do we have less cost?
So far today, comparing to other incumbents, about 20% is the different. Additional CapEx amount will be the same level. This unprecedented cost structure will be able to realize. One of the highlights to support this year we want to acquire platinum band and next year and onward from the satellite, and then nationwide in Japan, any area so the difficulty have the coverage, we want to geographically cover 100% with this.
Through the platinum band, how much can we change the situation like this? We will have a better coverage geographically through this. Once we are able to acquire this platinum band, I think this would become a very positive factor to our business. I understand your concern if this may incur more cost.
The secret here is we use software s-centric approach, means when we receive this new platinum band width, we can install them with negligible the cost because we can reuse existing post, pole and update the software. This is unlike other companies. We have in-house developed software so that it won't cost any, and then we can manage it. This platinum 4G and 5G and satellite, and this as a structure will be realized. Another point is for this Rakuten Mobile. We want to democratize mobile services.
Today, users are very careful not to use too much data, but when it comes to the unlimited usage, well, they use like about JPY 10,000, but we set the cap about the around JPY 3,000 under the unlimited call and unlimited data and unlimited SMS. This is our cost or the price difference with us and competitors.
They have sub-brands, but as you can see from the graph, even at the 50 gigabyte, Rakuten Mobile is more reasonable. The heavy users, particular younger generation, they use 130 meg or 200 meg on a daily basis. In such a case, this has a bigger the price gap, so in any price range, we are able to sustain the price competitiveness and our recognition for that part is being accelerated. 18.4 GB is our average data volume, and the other company is half of them, so 9 GB. Our users are much the heavy users in terms of the data volume.
ARPU is on the rise as well. As of December last year, the so-called ecosystem contribution included JPY 2,510. We started with zero, but it has gone up to JPY 2,510 ARPU, and that is thanks to the increase in heavy users and also by adding rich services, users are happier in using our services, and we're hoping that ARPU will go up further.
Using 5G means more data requirement and so ARPU will increase as well. I will come back to this later, but enterprise services is another one. We would like to also contribute make contribution to ecosystem. 75.2% year-on-year growth of revenue. In the fourth quarter, JPY 114.4300 billion.
Q1, Q2 saw a major improvement in operating income, or will. We, Q3, Q4, the roaming is getting lighter and lighter and therefore that would mean, we can have much more improved profitability. Synergy with Rakuten Group is working quite well.
Already, by joining Rakuten Group, more than 10 million people are using our services. Actually, the average MS lift by MNO is JPY 37,683 per year. Not just Rakuten Ichiba, but Rakuten Travel as well, about 45% or almost 50%, pushup or lift, thanks to more subscribers joining Rakuten Mobile. Enterprise services has started.
Rakuten Group, more than 400,000 companies are actually our customers. The initial year, 1 million, is what we are trying to target. We have started contracting with these customers. Basically, calls plus data for domestic unlimited calls domestically.
Depending on the data, the price will be different, but maximum JPY 2,780 per month. We're starting from JPY 1,900 or so. For the most part, things can be actually done for free. 4G, 5G, is available as well. Therefore, very strong interest coming our way from our potential customers. Wireless is not the only one.
Already, we have installed the fiber networks, therefore, using our backbone, internet services, provider, business is going to be launched. For Rakuten Symphony, I would like to hand this over to Tareq. Let me switch my microphone over to Tareq.
Good afternoon. Rakuten Symphony is a platform company. We are young, but we're making extremely healthy revenue growth. If you look at the last six quarters since our establishment, we have achieved more than half a billion USD in total revenue. For fiscal year 2022, our total revenue was $476 million. We're not stopping here.
If you look at the growth in 2023 and what's beyond, we have a very healthy sales pipeline, with over $4 billion of total revenue or total opportunities that we're pursuing. Our sales team is working hard to convert these opportunities into revenues. Today, in fact, we have closed fourteen global contracts are closed, and our team is in delivery phase. Eight global contracts are in final stages of closure, and we can't wait to convert those into real revenue opportunities.
If we look at the technology that Rakuten Symphony has, the technology that was created thanks to Rakuten Mobile, we see unprecedented demand in three big verticals in which Rakuten is an industry leader. Number one, Open RAN. In fact, Rakuten is the company that really drove the architecture evolution of Open RAN, a very critical technology to change the cost of building and engineering and managing telecom infrastructure across the world.
We are absolutely the world leader in this technology. We see a significant opportunity that is translating from proof of concepts in both brownfield and greenfield operator. Cloud, we are in fact today the largest edge cloud platform provider if you consider the number of workloads deployed in our infrastructure. Last but not least, efficient operation.
If you look at all of these in total addressable market and the size of this market, it is significant, and that's why we're very, very excited about the opportunities in front of us in the near future. Specifically about Open RAN, this is a topic that I think the industry as a whole debated for a very long time.
When I look at Rakuten and what we have achieved, especially in the mobile business in Japan, we now have recognized over $200 million of total revenue since establishment. As a new startup in an area that is highly contested, I think this is a significant progress in this architecture. In fact, we are the only real alternative to legacy platform deployment across the world.
With over 300,000 sales on air globally, it officially makes Rakuten the world's largest Open RAN software platform provider. This is very, very healthy to see for us as far as opportunities is concerned. Open RAN provided amazing agility to provide new features and advancements for mobile operators as well as consumers.
With over 600 features continue to develop and evolve, we think our architecture, our feature reliability, our feature quality is matching what the customers are expecting. With this, what is our objective now in 2023? We have to flawlessly deliver to our customers, the 14 global customers that we have already signed contract with, continue to expand and really create a win-win opportunities for both to monetize this marketplace.
We want to achieve a 40% revenue growth in the calendar year 2023 and truly set ourself as a true platform connectivity player, equivalent to what you have seen with AWS and Amazon when they launched AWS initially. We think Rakuten is the only company that is uniquely positioned to deliver on this promise. With that, thank you very much.
Thank you very much. We have been talking about the each business strategy. Last but not least, I would like to talk about the financial strategy. The first point is about the funding. We have been investing a huge amount of the funding to the Rakuten Mobile business, and the finance business has become gigantic.
This interest-bearing debt amount is increasing. My first point here is the Rakuten Bank's IPO. This was already announced. It's in its own process, and we would like to work on that. Next one is Rakuten Securities Holdings IPO. Before the end of this fiscal year, we plan to make that happen.
Other than that, parent company and subsidiary of the company-based, strategic business alliance and capital are arranged to be flexibly considered so that we will be able to have a healthy balance so that we can grow. The Rakuten Mobile's profitability and the structure improvement is what I've already covered before.
Finally, I'd like to talk about sustainability. At Rakuten, with regard to sustainability, we are taking this very seriously. JPY 33 trillion is the GMS. In other words, Rakuten Group's platform is the platform through which a lot of business deals or purchases are made. Sustainability of society is something that we own. We have this ownership, and we think that we need to put a lot of importance on that.
As a corporate mission, we see sustainability as a very important piece. We have sub-committees established to evaluate these different parts, environment, human rights, and diversity and inclusion. We have relevant sub-committees to come up with specific action plans.
Promoting that is not limited to Rakuten Group, but it is through partnerships as well as with users. It's a collaborative effort that we are going to make in this field. For example, Rakuten Travel will look at environment and other sustainability elements, clean energy and promotion of traveling is one, and also enhancement of user awareness is another aspect.
Quizzes might be given or donations might be solicited using Rakuten points as well. We would like to make certain efforts there. As a result, in sustainability indexes, Dow Jones Sustainability Indices is including Rakuten. Also as for awards, fortunately, we have been receiving a lot of awards. We're really grateful. I'd like to give financial highlights here.
As you can see here, internet service segment, domestic EC at the center, very steady performance. For FinTech, operating income plus 11%, approximately. Mobile segment, as I mentioned, the first phase required a lot of investment and cost. However, in 2023, this year, we are taking various measures to reduce cost and also marketing methods are using internet as much as possible, and as a result, roaming cost is coming down.
These measures is taking well, making getting fruits in 2023. As we reach this stage, then of course we will consult with the market as to what next steps we will be taking going forward. In any case, for year 2023, Rakuten Mobile financial situation will dramatically improve.
We will actually conduct marketing to the masses. We're not going to really go after users who are favoring free services, but rather focus on the subscribers that are loyal to us, to ecosystem overall, as well as Rakuten Mobile, so that we can have a sound growth going forward. That is the direction in our policy. Thank you very much for your attention.
This concludes our 2022 full year and fourth quarter financial results presentation. Thank you very much.