Analysis of Operating Results (Full Year)

Consolidated Results

Revenue

  • For the fiscal year ended March 31, 2022, revenue increased by ¥485.1 billion (9.3%) year on year to ¥5,690.6 billion. Revenue increased by ¥361.6 billion in the Yahoo! JAPAN/LINE segment, mainly due to increased revenue in connection with consolidation of LINE Corporation, by ¥112.3 billion in the Consumer segment, mainly due to increases in electricity revenue and revenues from sales of goods and others, despite the impact of a decline in ARPU due to mobile service price reduction, and by ¥24.1 billion in the Enterprise segment, mainly due to an increase in demand for solutions associated with digitalization. On the other hand, revenue decreased by ¥30.7 billion in the Distribution segment, mainly due to absence of revenue for large-scale project orders from municipalities recorded in the previous fiscal year, while there was a solid increase in revenue from subscription services.

Operating income

  • For the fiscal year ended March 31, 2022, operating income increased by ¥15.0 billion (1.5%) year on year to ¥985.7 billion. Operating income increased by ¥27.4 billion in the Yahoo! JAPAN/LINE segment, owing to the consolidation of LINE Corporation and growth in the advertising business, and by ¥20.7 billion in the Enterprise segment, mainly due to an increase in demand for solutions associated with digitalization. In the Distribution segment, operating income increased by ¥0.6 billion due to a solid increase in income from subscription services. On the other hand, operating income decreased by ¥19.2 billion in the Consumer segment mainly due to the impact of the switch from the SoftBank brand to the Y!mobile and LINEMO brands and the introduction of new price plans. In Other, not included in the above segments, operating income decreased by ¥10.7 billion year on year mainly due to aggressive investments by subsidiaries of the Company to gain market shares.

Net income attributable to owners of the Company

  • For the fiscal year ended March 31, 2022, net income attributable to owners of the Company increased by ¥26.2 billion (5.3%) year on year to ¥517.5 billion.This increase mainly reflects an increase in operating income and an increase in financing income of ¥33.7 billion due to gains on valuation of investment securities held, while there was an increase in share of losses of associates accounted for using the equity method of ¥14.6 billion due to the impact of Demae-can Co., Ltd. and LINE Corporation's overseas associates accounted for using the equity method. For the fiscal year ended March 31, 2022, net income attributable to non-controlling interests increased by ¥10.0 billion (17.7%) year on year to ¥66.4 billion mainly due to the impact of a decrease in the Company's percentage of voting rights in Z Holdings in connection with the business integration of Z Holdings and LINE Corporation.

Adjusted free cash flow*1

  • In the fiscal year ended March 31, 2022, adjusted free cash flow was positive ¥352.0 billion, a decrease of ¥478.8 billion year on year. This reflects a decrease of ¥123.0 billion in net cash inflow from operating activities, an increase of ¥446.4 billion in net cash outflow from investing activities, and the securitization of installment sales receivables. The decrease in net cash inflow from operating activities mainly reflected a decrease in income taxes refunded due to the absence in the fiscal year ended March 31, 2022 of the income tax refunded related to dividends paid among the Z Holdings Group (Z Holdings Corporation and its subsidiaries) recorded in the previous fiscal year, a decrease in inflows related to an increase in trade and other payables, and a decrease in inflows related to deposits in banking business, while there was a decrease in outflows related to loans in banking business. The increase in net cash outflow from investing activities mainly reflected payments for purchases of property, plant and equipment and intangible assets associated with the acquisition of the trademarks and other assets for ¥178.5 billion by Yahoo Japan in connection with the license agreement and payments for acquisition of investments including the purchase of shares of LINE Corporation (currently A Holdings Corporation) that were less than one unit for ¥115.2 billion as a result of the reverse share split, in the fiscal year ended March 31, 2022. Another factor was the absence of a cash inflow of ¥312.8 billion from the acceptance of the balance of cash and cash equivalents resulting from the consolidation of LINE Corporation through a stock exchange and a net cash outflow of ¥175.3 billion associated with the joint tender offer for shares of LINE Corporation, both of which were recorded in the fiscal year ended March 31, 2021.

[Notes]
  1. *1
    Free cash flow = net cash inflow from operating activities + net cash outflow from investing activities
    Adjusted free cash flow = free cash flow + (proceeds from the securitization of installment sales receivables - repayments thereof)
  2. *2
    Excluding adjustments for free cash flow of both A Holdings Corporation and the Z Holdings Group, net payments for obtaining the control of subsidiaries associated with the business integration of Z Holdings and LINE Corporation, and loans to board directors, etc., and including dividend payments received from both A Holdings Corporation and Z Holdings.

Revenue by segment

Revenue by segment
Revenue by segment

Consumer segment

  • Revenue

  • Segment income

Consumer segment revenue increased by ¥112.3 billion (4.1%) year on year to ¥2,882.7 billion. Mobile revenue decreased by ¥69.4 billion (4.1%) year on year. The decrease reflects a decline in ARPU due to mobile service price reduction and reversal of contract liabilities related to Half-Price Support of ¥11.0 billion as a one-time increase in revenue in the previous fiscal year, while there was an increase in subscribers led by the Y!mobile brand, in addition to an improvement in the amount of Otokuwari discounts*3 offered by the SoftBank brand. The decline in ARPU due to mobile service price reduction was mainly due to the effects of an increase in subscribers switching from the SoftBank brand to the Y!mobile and LINEMO brands and introduction of new price plans under the SoftBank and Y!mobile brands.Broadband revenue increased by ¥5.0 billion (1.3%) year on year. This increase was due to an increase in subscribers of the SoftBank Hikari fiber-optic service.
Moreover, electricity revenue increased by ¥108.2 billion (82.6%) year on year. This increase was mainly due to an increase in subscribers of the Ouchi Denki (Home Electricity) service and fluctuation of transaction volume and price in the market.Revenues from sales of goods and others increased by ¥68.5 billion (12.2%) year on year to ¥630.9 billion. This increase was mainly due to an increase in unit price of mobile devices associated with the rise in the composition of high-priced mobile devices.

The total of operating expenses (cost of sales and selling, general and administrative expenses) and other operating income and loss (other operating income and other operating expenses) was ¥2,243.2 billion, an increase of ¥131.4 billion (6.2%) year on year. This increase was mainly due to an increase in the cost of products related to the Ouchi Denki service, an increase in the cost of products pertaining to an increase in unit purchase price associated with the abovementioned rise in the composition of high-priced mobile devices, and an increase in telecommunication network charges due to an increase in subscribers of the SoftBank Hikari.

As a result, segment income decreased by ¥19.2 billion (2.9%) year on year to ¥639.5 billion.

[Note]
  1. *3
    The Otokuwari discounts include First Year Discount, First Year Discount+, and Half-year Discount.

Enterprise segment

  • Revenue

  • Segment income

Enterprise segment revenue increased by ¥24.1 billion (3.5%) year on year to ¥715.7 billion. Within Enterprise segment revenue, mobile revenue increased by ¥7.8 billion (2.6%) to ¥313.2 billion, fixed-line revenue decreased by ¥2.1 billion (1.1%) to ¥186.8 billion, and business solution and others revenue increased by ¥18.4 billion (9.3%) to ¥215.7 billion.
The increase in mobile revenue was mainly due to an increase in smartphone subscribers following growing demand for telework.The decrease in fixed-line revenue was mainly due to a decrease in the number of subscribers to telephone services.The increase in business solution and others revenue was mainly from increased revenue from cloud services, digital marketing advertising services, and security solutions as a result of capturing enterprise customers' demand for digitalization arising from the COVID-19 outbreak.

The total of operating expenses (cost of sales and selling, general and administrative expenses) and other operating income and loss (other operating income and other operating expenses) was ¥587.3 billion, an increase of ¥3.4 billion (0.6%) year on year. This increase mainly reflects an increase in costs following the abovementioned increase in business solution and others revenue.

As a result, segment income increased by ¥20.7 billion (19.2%) year on year to ¥128.5 billion.

Distribution segment

  • Revenue

  • Segment income

Distribution segment revenue decreased by ¥30.7 billion (5.8%) year on year to ¥500.6 billion. This was mainly due to absence of revenue for large-scale project orders from municipalities recorded in the previous fiscal year, while there was solid growth in subscription services such as cloud and SaaS, which have been strategic areas of focus.

The total of operating expenses (cost of sales and selling, general and administrative expenses) and other operating income and loss (other operating income and other operating expenses) was ¥477.7 billion, a decrease of ¥31.4 billion (6.2%) year on year. This decrease was mainly due to a decrease in costs of products in connection with the abovementioned decrease in revenue.

As a result, segment income increased by ¥0.6 billion (2.7%) year on year to ¥22.9 billion.

Yahoo! JAPAN/LINE segment*4

  • Revenue*5

  • Segment income

Yahoo! JAPAN/LINE segment revenue increased by ¥361.6 billion (30.0%) year on year to ¥1,567.4 billion. Within Yahoo! JAPAN/LINE segment revenue, media revenue increased by ¥267.7 billion (73.3%) to ¥632.8 billion, commerce revenue increased by ¥64.4 billion (8.6%) to ¥809.1 billion, strategy revenue increased by ¥24.8 billion (29.0%) to ¥110.4 billion, and other revenue increased by ¥4.7 billion (44.9%) to ¥15.1 billion.
The increase in media revenue mainly reflected the recovery of advertising demand and the product improvement initiatives, in addition to the consolidation of LINE Corporation.
The increase in commerce revenue is mainly due to an increase in revenue of the ZOZO Group (ZOZO, Inc. and its subsidiaries) and the ASKUL Group (ASKUL Corporation and its subsidiaries), in addition to the consolidation of LINE Corporation.
The increase in strategy revenue mainly reflected an increase in revenue in the FinTech field, in addition to the consolidation of LINE Corporation.

The total of operating expenses (cost of sales and selling, general and administrative expenses) and other operating income and loss (other operating income and other operating expenses) was ¥1,377.9 billion, an increase of ¥334.2 billion (32.0%) year on year. This increase mainly reflected an increase in expenses accompanying the consolidation of LINE Corporation and an increase in sales promotion expenses at Yahoo Japan.

As a result, segment income increased by ¥27.4 billion (16.9%) year on year to ¥189.5 billion.

[Notes]
  1. *4
    Along with the consolidation of LINE Corporation in connection with the completion of the business integration of Z Holdings Corporation and LINE Corporation in March 2021, the “Yahoo” reportable segment was renamed to “Yahoo! JAPAN/LINE” from the fiscal year ended March 31, 2022.
  2. *5
    In the fiscal year ended March 31, 2022, Z Holdings Corporation revised its management segments following its business integration with LINE Corporation in March 2021. Accordingly, “Strategy” has been added to the breakdown of revenue, and the breakdown has been revised with respect to certain services and subsidiaries. Additionally, revenues for the same period of the previous fiscal year have been restated to reflect these changes.

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