The following information was originally prepared and published by the Company in Japanese as it contains timely disclosure materials to be submitted to the Tokyo Stock Exchange. This English summary translation is for your convenience only. To the extent there is any discrepancy between this English translation and the original Japanese version, please refer to the Japanese version. The following financial information was prepared in accordance with International Financial Reporting Standards ("IFRS").
Consolidated Financial Reports (IFRS)
for the three months ended March 31, 2023
Rakuten Group, Inc. | ||||
May 12, 2023 | ||||
Company name | Rakuten Group, Inc. | Liste Tokyo Stock Exchange | ||
d | ||||
Code No | 4755 | URL https://global.rakuten.com/corp/ | ||
Representative | (Title) | Chairman and CEO | (Name) | Hiroshi Mikitani |
Contact person | (Title) | Director and Group Executive Vice(Name) | Kenji Hirose | |
President CFO |
Supplementary materials for financial results: Yes
Financial results information meeting held: Yes (For institutional investors and analysts)
1. Consolidated Results for the three months ended March 31, 2023
(January 1 - March 31, 2023)
(Yen amounts are rounded to the nearest million)
- Consolidated Operating Results
(%, YoY) | |||||||||
Revenue | Operating income | Income before | Net income | ||||||
income tax | |||||||||
Millions of Yen | % | Millions of Yen | % | Millions of Yen | % | Millions of Yen | % | ||
Three months ended | 475,635 | 9.3 | (76,194) | - | (79,403) | - | (82,620) | - | |
March 31, 2023 | |||||||||
Three months ended | 435,020 | - | (113,184) | - | (119,261) | - | (92,525) | - | |
March 31, 2022 | |||||||||
Net income | Comprehensive | Basic | Diluted | ||||||
earnings per | earnings per share | ||||||||
attributable to | |||||||||
income | share attributable | attributable to | |||||||
owners of the | |||||||||
to owners of the | owners of the | ||||||||
Company | |||||||||
Company | Company | ||||||||
Millions of Yen | % | Millions of Yen | % | Yen | Yen | ||||
Three months ended | (82,567) | - | (66,234) | - | (51.88) | (52.08) | |||
March 31, 2023 | |||||||||
Three months ended | (91,842) | - | (59,918) | - | (58.03) | (58.03) | |||
March 31, 2022 | |||||||||
Note: The Rakuten Group has applied IFRS 17 "Insurance Contracts" (hereinafter "IFRS 17") from the beginning of the first quarter ended March 31, 2023, and reflected the cumulative effect of this accounting standard change on the date of initial application of January 1, 2022. As a result, figures for the first quarter ended March 31, 2022 reflect the retrospective application of IFRS 17. As such, the ratios of year-on-year change for the first quarter ended March 31, 2022 is not stated.
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- Consolidated Financial Position
Total equity | Ratio of total equity | |||
attributable to | ||||
attributable to | ||||
Total assets | Total equity | owners of the | ||
owners of the | ||||
Company to total | ||||
Company | ||||
assets | ||||
Millions of Yen | Millions of Yen | Millions of Yen | % | |
As of March 31, | 20,349,537 | 779,417 | 721,691 | 3.5 |
2023 | ||||
As of December 31, | 20,402,281 | 848,711 | 791,351 | 3.9 |
2022 | ||||
Note: The Rakuten Group has applied IFRS 17 from the beginning of the first quarter ended March 31, 2023, and reflected the cumulative effect of this accounting standard change on the date of initial application of January 1, 2022. As a result, figures for the fiscal year ended December 31, 2022 reflect the retrospective application of IFRS 17.
2. Dividends
Dividend per Share | |||||
1Q | 2Q | 3Q | 4Q | Year | |
Yen | Yen | Yen | Yen | Yen | |
FY2022 | - | 0.00 | - | 4.50 | 4.50 |
FY2023 | - | ||||
FY2023 (Forecast) | - | - | - | - |
Note: Dividend per share for the fiscal year ending December 31, 2023 has not been decided yet, and there are no changes to the previously disclosed dividend forecast.
.
3. Estimate of Consolidated Operating Results for fiscal year 2023 (January 1 to December 31, 2023)
For the estimate of consolidated operating results for fiscal year 2023, double-digit growth on consolidated operating results for the fiscal year 2022 is estimated for fiscal year 2023 consolidated revenue, excluding the securities business whose results are heavily impacted by stock market conditions. (For details, see page 9, "1. Qualitative Information, Financial Statements, etc. (3) Qualitative Information about Consolidated Business Forecasts".)
Note: There are no changes to the previously disclosed consolidated forecasts for the year ending December 31, 2023.
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Notes
(1) Changes in Significant Subsidiaries during the Current Period
(Changes in Specified Subsidiaries resulting in Change in Scope of Consolidation): No
New: | - (Company name: -) | Excluded: - (Company name: -) |
- Changes in Accounting Policies and Changes in Accounting Estimates
- Changes in accounting policies required by IFRS: Yes
- Changes in accounting policies due to other reasons: No
- Changes in accounting estimates: No
(Note) For details, see page 16, "2. Consolidated Financial Statements (Summary) and Notes
- Notes to the Summary of Consolidated Financial Statements for the three months ended March 31, 2023 (Material Accounting Policies)".
- Number of Shares Issued (Common Stock)
-
Total number of shares issued at the end of the period (including treasury stocks) 1,592,398,500 shares (As of March 31, 2023)
1,590,463,000 shares (As of December 31, 2022) - Number of treasury stocks at the end of the period
-
Total number of shares issued at the end of the period (including treasury stocks) 1,592,398,500 shares (As of March 31, 2023)
244 shares (As of March 31, 2023)
244 shares (As of December 31, 2022)
3. Average number of shares during the period (cumulative from the beginning of the year) 1,591,350,897 shares (January 1 - March 31, 2023)
1,582,629,844 shares (January 1 - March 31, 2022)
This financial report is not subject to an audit firm's quarterly review.
Explanation about the Appropriate Use of Earnings Forecasts, and Other Special Matters Consolidated earnings forecasts for the year ending December 31, 2023 are based on information that is available at the time of writing, but a number of known and unknown factors could cause actual results to differ from projections.
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1. Qualitative Information, Financial Statements, etc.
(1) Qualitative Information Concerning Consolidated Business Results
The Rakuten Group discloses consolidated business results in terms of both its internal measures which management relies upon in making decisions (hereinafter the "Non-GAAP financial measures") and those under IFRS.
Non-GAAP operating income is operating income under IFRS (hereinafter "IFRS operating income") after deducting unusual items and other adjustments as prescribed by the Rakuten Group. Management believes that the disclosure of Non-GAAP financial measures facilitates comparison between the Rakuten Group and peer companies in the same industry or comparison of its business results with those of prior fiscal years by stakeholders, and can provide useful information in understanding the underlying business results of the Rakuten Group and its future outlook. Unusual items refer to one-off items that the Rakuten Group believes shall be excluded for the purposes of preparing a future outlook based on certain rules. Other adjustment items are those that tend to differ depending on the standards applied, and are therefore less comparable between companies, such as share based compensation expenses and amortization of acquisition-related intangible assets.
The Rakuten Group has applied IFRS 17 "Insurance Contracts" from the beginning of the first quarter ended March 31, 2023. As a result, figures for the FinTech segment for the three months ended March 31, 2023 have been restated reflecting the cumulative effect of this accounting standard change as of the beginning of the previous fiscal year, being the date of initial application. For further details, please refer to "2. Consolidated Financial Statements (Summary) and Notes, (6) Notes to the Summary of Consolidated Financial Statements for the three months ended March 31, 2023, (Material Accounting Policies)".
(Note) For disclosure of Non-GAAP financial measures, the Rakuten Group refers to the rules specified by the U.S. Securities and Exchange Commission but does not fully comply with such rules.
i) Business Results for the three months ended March 31, 2023 (Non-GAAP basis)
Although the world economy continued to pick up moderately during the three months ended March 31, 2023 despite weakness seen in some regions, it will be necessary to pay attention to the impact from global monetary tightening as well as increasing risk of economic downturn due to rising prices and other factors. Despite some weaknesses, the Japanese economy is recovering moderately including consumer spending, and going forward, it is expected to pick up partly due to the effects of various policies.
According to the "White Paper on Information and Communications in Japan" (Note), ICT has become an indispensable social and economic infrastructure for daily life with the emergence of new ICT services such as drones and AI and their rapid penetration into society. In addition, the Company believes that societal demand has increased even further for various digital services as we entered a period of transformation into a world where we live with COVID-19.
Under such an environment, the Rakuten Group is developing and promoting the use of services that leverage advanced technologies such as AI and data both online and offline based on membership and shared loyalty point programs. Rakuten Mobile was the first company in the world to introduce Open RAN that enables multi-vendor wireless access networks, including cell phone base stations, as well as vRAN, a virtualization technology, across its entire commercial network. In addition, Rakuten Symphony is proposing the open and fully virtualized architecture implemented by Rakuten Mobile to telecommunications companies around the world, as telecommunications carriers continue to innovate their network equipment configurations. Going forward, the Rakuten Group will continue to enhance its competitiveness by further evolving the Rakuten Ecosystem.
In the Internet Services segment, factors including various measures and sales promotion activities which sought to improve customer convenience and satisfaction for internet shopping mall Rakuten Ichiba successfully led to further retention of customers, even after the stay-at-home consumption amid the COVID-19 pandemic had run its course. In addition, continued steady recovery in demand for domestic travel and other factors resulted in growth in transaction value in domestic e-commerce services. In the FinTech segment, the customer base for each service has continued to expand, and the Group achieved increases in revenue and profit in credit card related services, banking services, securities services, among others. In the Mobile segment, revenue increased year-on-year due to an increase in telecommunication fee revenues and other factors, and the segment loss steadily decreased accordingly.
As a result, the Rakuten Group recorded revenue of ¥475,635 million, up 9.3% year-on-year for the three - 4 -
months ended March 31, 2023. In the Mobile segment, although its segment loss peaked in the first quarter ended March 31, 2022 and has contracted thereafter, it recorded a Non-GAAP operating loss of ¥68,968 million, compared to a Non-GAAP operating loss of ¥99,139 million in the three months ended March 31, 2022 due to ongoing prior investments such as the installation of its own base stations.
Note: Source: "2022 White Paper on Information and Communications in Japan" (Ministry of Internal Affairs and Communications)
(Non-GAAP)
(Millions of Yen) | ||||
Three months ended | Three months ended | Amount | % Change | |
Change | ||||
March 31, 2022 | March 31, 2023 | YoY | ||
YoY | ||||
Revenue | 435,020 | 475,635 | 40,615 | 9.3% |
Non-GAAP operating loss | (99,139) | (68,968) | 30,171 | -% |
ii) Reconciliation of Non-GAAP Operating Income to IFRS Operating Income
For the three months ended March 31, 2023, amortization of intangible assets of ¥2,099 million and share based compensation expenses of ¥4,115 million were excluded from Non-GAAP operating income. One-off items of ¥8,614 million listed for the three months ended March 31, 2022 were expenses associated with an increase in provision for customer points as a result of revisions in the Rakuten Point Terms of Use. One-off items listed for the three months ended March 31, 2023 include fees paid to external experts and others such as legal fees related to fraudulent acts committed in collusion by former employees of a subsidiary and suppliers, which came to light in the previous fiscal year.
(Millions of Yen) | |||
Three months ended | Three months ended | Amount Change | |
March 31, 2022 | March 31, 2023 | YoY | |
Non-GAAP operating loss | (99,139) | (68,968) | 30,171 |
Amortization of intangible assets (PPA) | (1,972) | (2,099) | (127) |
Share based compensation expenses | (3,459) | (4,115) | (656) |
One-off items | (8,614) | (1,012) | 7,602 |
IFRS operating loss | (113,184) | (76,194) | 36,990 |
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Rakuten Group Inc. published this content on 12 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 May 2023 06:22:10 UTC.