Manabu Miyasaka - President and CEO Tomoaki Tanida - Corporate Officer EVP, President of Financial & Payment Services

Sumito Takeda - UBS Securities Yoshitaka Nagao - Nomura Securities. Keiichi Yoneshima - Barclays Securities Yosuke Tomimatsu - Bank of America Merrill Lynch Oliver Matthew - CLSA Haruka Mori - JPMorgan Securities Eiji Maeda - SMBC

Good afternoon.

Good afternoon. I would like to give the presentation on FY2014 full-year and Q4 business results.

In the latter half of my presentation we will talk about the credit card business, and the presentation will be given by the person in charge of it instead of me. Now let's go to the full-year numbers.

Then after this, I will talk about the quarterly number. This is the result.

Revenue was JPY428.4 billion, up 4.9% year on year. Operating income was JPY197.2 billion, up 0.4% year on year.

In terms of net income attributable to owners of the parent, it was JPY133 billion, up 3.5%. In terms of the breakdown of the revenue, advertising revenue was JPY249.8 billion, up 7.4%.

And via the smartphone we were able to enjoy 33.4%. And paid search and display advertisement increased by 0.8% and 19.6% year on year respectively.

In terms of the domestic e-commerce transaction value, it was JPY1.19 trillion, up 7.6% year on year and via smartphone-wise the level was up to 34%. Let me share with you the highlights of FY2014.

Regarding advertising related business, YDN others, including premium DSP, we were able to improve the function and leverage on data and we were able to grow very favorably. YDN increased by 65.8% year on year and also premium DSP is growing very steadily.

Regarding e-commerce related business, we were able to increase transaction value to JPY1.19 trillion, up 7.6% year on year. In terms of shopping regarding the conversion rate, which is the conversion of the visitors to buyers, the number improved and therefore as a result, we were able to increase the number of buyers.

Regarding auction related transaction value, we were able to increase by 8.6% year on year. The third highlight is related to shareholder return and growth investment.

Last month I mentioned that the year-end dividend payout forecast to be 8.86% (sic – see slide 6 "JPY8.86") and I try to be very steady in having this dividend payout. Mid- to long-term-wise we will be investing in new businesses to secure steady dividend.

And even though we will be investing in new businesses, we will be able to continue providing dividend payout. And so we will be pursuing two ends, one being the shareholder return and also growth investment.

And I have announced this last month. Last year the dividend per share was JPY4.43 and now we are doubling that to JPY8.86.

This shows the full-year revenue for 18 consecutive years. We were able to increase the revenue and it was JPY428.4 billion, up 4.9%.

Operating income was up by 0.4% year on year, recording JPY197.2 billion. Net income attributable to the owners of the parent was JPY133 billion, up 3.5% year on year.

This is the breakdown of revenue in comparison to the previous year. Marketing solutions business which was led by advertisement increased by 7.5% year on year.

Consumer-business-wise year on year was negative 2.7%. What are the factors?

So half of last year was before the new strategy, so this shows the non-apple-to-apple comparison. And also in terms of the last minute shopping before the tax hike, there was an increase in the demand in March.

Therefore as compared to the previous year the consumer business was minus 2.7%. Other businesses are comprised of financing and settlement.

We started YJ Card Corporation business and also FX-related business was very active, so that contributed to our overall figure, thus recording an increase of 13.4% year on year. So this was a very brief explanation of our full-year situation.

I would like to go into details of the business itself. And this time around we decided to change the approach in giving the explanation, therefore we will have core businesses and also investment-stage businesses.

And of course we will be very aggressive in both categories but in terms of core business, we are very strong in those areas, which are listed over here, namely advertising, auctions and membership services. And we are very strong in those domains, but we will be conducting more investment, M&A and improvement to further strengthen these domains.

Now the next category is investment-stage business and we are not in the surplus yet, but we would like to invest in these areas so that they can be the major business pillars. So we will have advanced investment in these areas, namely shopping and credit card.

This shows the contribution of each domain to operating income. Last year was JPY197.2 billion and in -- excuse me, last year was JPY196.4 billion.

And in terms of the core business, including advertising and auction and membership services, we were able to increase that by JPY10.7 billion. On the other hand, we had to build new business infrastructures, so in terms of shopping and credit card business, we are being very aggressive in making the investment.

And so we invested JPY6.8 billion, so this is advanced investment. And also, I guess this can be said for core as well as investment-stage business, but in order for the Company to grow furthermore, we have to be more and more data oriented, thus requiring investment in big data.

And so we will continue the enhancement of system infrastructure, which is about JPY3.5 billion, and this is the depreciation amount. So vis-a-vis JPY196.4 billion last year, we recorded operating income of JPY197.2 billion.

Next please look at this. That's all this in the margin of the full-year basis and then also we are now trying a new challenge and also consolidating new subsidiaries.

And so that now [indiscernible] that's the rather higher operating [corporate] income [indiscernible]. So that's why and that's why -- that's in consolidation of the new subsidiaries.

Outside of the scope of business has now -- have pushed down -- that's the margin, but on the other hand, all in all, now we still maintain this healthy level of operating income margin. This is about my presentations on the full-year basis.

From now on, let me talk about the business results in the Q4 and FY2014. In the Q4, this is the highlights.

And the revenues was JPY117.6 billion and the 9.3% growth year on year. Operating income was JPY52.4 billion, 9.8% growth year on year.

And JPY32.9 billion is -- this is net income and a 3.3% growth. When it comes to revenues for advertising was JPY69.3 billion, an 8.4% growth year on year.

And the transaction value for e-commerce and -- so that we have something higher the figures, that's immediately, and then high demand immediately before the raise of the consumption tax. But still, we have JPY305.1 billion of total transaction values of e-commerce.

Next let me talk about the quarterly revenue breakdown. The marketing solution business have grown by 8.7% and consumer business have grown by 5.4% year on year.

And particularly in the consumer business we have a favorable business auction. And we can start the consolidations of the YJ Card, so that in others we're going to have 33.6% of growth in the revenues.

That's about the presentation of the quarterly business results. From now on, let me explain about the management policy.

From now we're getting into new three years' [of measures term], so that -- now let me talk about our basic management policy in the next three years. As I mentioned earlier a little bit but now and when you look at the current business and we have the core business, we have classified into core business and also the other parts of the group of business, which we might call it investment-stage business, for the future growth.

So these are the two major categories of the business. And so far -- before that we had an e-commerce revolution, we tried to make our utmost effort across the board, all the businesses, but now we try to prioritize the classified of the different types of businesses into the core business and also for the investment-stage business and in which we'd like to make investments.

Still that's the -- still does not make any [progress]. So and also and what's most important is that to strengthen our accounts from business furthermore, so that we would like to doing that both ways.

So this -- and both of the core business and investment-stage business, we would like to enhance both businesses for the expansion of business, so that's -- we have to be careful and the tightening at our discipline at the finance, of the corporate finance, so that would the bad thing, so that we would like to be very careful. And also, we are making investments and enhance both the core business and investment-stage business, but on the other hand, we have to and be really careful and insist on the financial discipline as much as possible.

So when it comes to businesses and the advertising business, e-commerce and the finance and the balance, these are the three pillars of the businesses and we would like to expand all these three businesses altogether. And when it comes to these three major business segments of Yahoo Japan, in all the three business segments we would like to share the traffic -- the traffic of these businesses will be shared among all these three segments, so that we can have a synergy with each other.

And other than that, we have to take advantage of the [multi] big data. And this is the major challenge and the major opportunity for us.

And for example, we have accumulated a lot of the heavy amount of the data only within advertising, also we have the other data accumulated by e-commerce and also we have other data stored based on the settlements and the finance businesses. So these are the three different types of the data that are now stored in our databases and so we would like to utilize the synergy among all these three different types of their data.

And still, we so far failed to make much use of this synergy. So that once we can go through our efforts and we have the step system, which would like to take advantage fully of all the three different types of data, that will lead to that really unique business [model] of Yahoo Japan that [indiscernible] our business.

So that we would like to realize this new business model based on this big data. And this is the background and that we have a data and science team established in the new organizations.

This is one of the reasons, so that there will -- and that this team will now become independent in our organizations. They're going to take the lead of -- and how to take advantage of this [multi] big data business after this [onward].

The other thing is that this is just review and then to prospect for the future in the past three years and next three years. And when I look back on the past three years, at the time in FY2012, still that's -- almost all that access of the Yahoo Japan was based on the PC so that's something we were all worried about.

And now we're getting into the smartphone and the mobile devices, [the age] and how that can -- Yahoo Japan can do with the business. That was a big concern, but now we responded to the questions and now [that we know] in a country that Yahoo Japan users also buy the mobile devices and the top page applications is being used a lot more.

So this [season] we can have provided a better portal, an excellent portal, and we can do any business on both PC and also modern platform. But when we look into the next three years, then what we have to do is that now we can have the solid basis for the smartphone-based platform businesses, but now we have to encourage users to using more and more applications by the browsers.

So this is the device-wise access percentage of Yahoo Japan here. Now when we start listing the account efforts and we started from 20%, but now in the country about close to 60% have access for Yahoo Japan.

It's based on that application-based access. And what we would like to do in the next three years, we would like to extend this 60% furthermore.

And also when we break down into these red boxes, now it's included both applications and browsers. So that's -- we actually have more [passages] of access is being made by applications, not by the browser, end of this month on access.

So the one thing that's about today in the country that the applications and PC browsers is the number one, and also we'd like to become the number 1 also in applications, by which the end user can get access to that -- the mobile platform, not only by the PC platform. So that in the end, we can become really number 1 in all the platforms and also we want to become the number 1 in access and in mobile platform.

So the applications and the access by the application is our major focus in the next two years [plus]. And when it comes to our investment business and this is the credit card business and the shopping business and this is the investment-stage business, so that now it still don't make so much profit but [indiscernible] the business for the future.

And the credit card business, by the end of the FY2015, and now we are going to recognize about JPY4 billion of the marketing expenses a year and in the end we'd like to have in total JPY1.4 million to JPY1.6 million card memberships. And for the shopping members and after we're implementing the EC revolutions, now we have spent [indiscernible] the upfront investments, but now thanks for these efforts, now we're having the mobiles and the [indiscernible].

And now we are now looking at the really result of these efforts. And compared to one year ago, now the function of the store and the site is getting all the more [tracking] for the users.

But now we're getting into the next stage, after having this number of items, how we can have actual buyers and actual consumption by users and all that. We're getting into the new stage.

We have been trying different measures and we have been implementing different measures. And as of March of 2015, no matter when you buy, you have more points.

And this promotional campaign went very well so in terms of shopping we are taking concrete measures to increase the number of sellers or rather, excuse me, buyers. And it's very difficult to explain to you how much we can gain profit by investing in big data, but when you look at the market at large, the more data you have, more market cap you have.

And so [ICT] and a data technology company is the profile that you have to uphold. And that is the global trend.

Therefore domestically we will be investing in different capital expenditures. Last year we've invested JPY30 billion and in FY2013, we have invested JPY25 billion.

And this year, we would like to have about 30% increase on our CapEx. And unless we invest that magnitude of amount, we will not be a global multi big data company.

And in order to realize this goal, we will be investing 30% increase in CapEx year on year. Every year we will have abundant and exclusive data.

Does that mean that are we going to make investment in line with that? If we do that, that will be an exponential number, and so someday we will not be able to catch up with the increase big data.

And so it's not in line with the increase of big data, but rather we are going to focus on the processing technology. And so maybe we might have to actually invest [JPY100 million], but based on our data processing technology, we can reduce that to [JPY70 million] or [JPY80 million].

And so in short, even though big data itself will increase and in quantity, we will be able to be [on par] with that increase by leveraging on our data processing technology. And so far I have briefly walked you through our management policy and how we are going to implement our strategy.

We have been talking about our different strategies, but I know that we have to take heed to the financial discipline. And so the only way is to reduce the cost structure, meaning that we have to be streamlining our cost structure, even though we will be investing and growing.

We are very human oriented, so we tend to hire more people. And of course we will hire new people in the areas that we need to invest in, but of course that must be accompanied by the improvement of productivity.

And unless that is pursued, we as a Company will not be able to grow. So in terms of the personnel expenses as well as business commissions, we will look at those KPIs in order to find out whether we are actually improving our productivity or not.

Let's go through our different KPIs. Firstly, page views, in FY2014 it was about 61.1 billion.

And in terms of smartphone, we increased it by 44%. And in terms of daily unique browser, we increased by 20% and by smartphone the level increased to 54.6%.

Now let's look at applications. When you look at downloads, it was increased from 160 million to 270 million, an increase of 70% year on year.

And so in terms of the publishers downloading number, we are number 1, excluding game applications. And so Yahoo Japan is the company ranked as number 1 in domestic application publishers.

But in the next three years we want to be number 1 in application area as well. So all in all, we have different applications and using the top page of Yahoo Japan, there are many services that are really attractive.

But when you compare ours with others and the quality and maybe the quantity, it might appeal vis a vis others, so we would like to have an apple-to-apple comparison and win in the total solutions. So that will be what we will be aiming in the next three years.

E-commerce transaction volume, total of shopping and auction, is about an increase of 7.6%. Auction increased by 8.6% and shopping increased by 5.4%.

This is the e-commerce growth vis a vis the previous year. The red one is auction growth and the dotted line is shopping.

In terms of auction, up until the fourth quarter of 2012, there has been negative figure, but then afterward, we are seeing some improvement. And recently we are increasing by about 10%.

And fourth-quarter-wise, when you compare with previous year, it happened right before the tax hike. And so comparatively speaking, you see a turndown, but you can see that there has been a very steady improvement in the single-digit high-end up to 10%.

In the third quarter of 2013, we announced the new strategy and as compared to the previous year, the shopping-related business was in the negative domain. But after the announcement of new e-commerce strategy, we are seeing an increase and rebound of this business.

And in the fourth quarter it grew and this year it went down. But I'll repeat myself, there was a big demand right before the tax hike last fourth quarter.

So in terms of the fourth quarter of 2012 and fourth quarter of 2014, it was not impacted by the tax hike, you can make an apple-to-apple comparison and you see an improvement. So from here on, I would like to talk about the growing businesses.

Firstly, advertising, we increased by 7.4% year on year. And at the bottom you see paid search and on the top you see display.

And on the right you see the fourth quarter comparison. This is the quarterly advertising-related revenue year-on-year growth trend.

The bottom dotted line is paid search and the red solid line is the display. In terms of the display advertisement, you are seeing a steady growth of about 20% and so you are seeing some recovery.

And in terms of the dotted line, which is the paid search, this quarter-wise we implemented different measures and you see an increase of positive 0.6%. As mentioned last time, you have to have long-term perspective.

And when you look at the near- to long-term, paid search is conducted on PC and it is decreasing, but that decrease is becoming stable in terms of the prediction that we can make. So in terms of mid-term, we believe that people will search using mobile rather than PC and mobile is increasing.

So mid-term-wise it might be negative of the single middle digit, but you will be seeing positive upturn from the coming quarter. And we will be making investment in that line.

Next you see the increase of advertisement-related revenue via smartphones. And so in terms of the revenue ratio, smartphone registers about 36%.

We want to grow smartphone advertisement revenue in the future and Yahoo Japan Timeline View is the major project. So in the coming year, we would like to make this project a big success.

You can use the service on your smartphone, so please take a look at it. We are conducting test and around May 20 we would like to release this service.

Fortunately, about 20% of the people are using Timeline View and in terms of the performance level of infeed advertisement, it is very favorable. And so I hope that Timeline View will be accepted by the users and that will lead to the increase of infeed advertisement.

I'm sure that you have to get accustomed and become familiar with Timeline View, so in the next three weeks we would like to improve the quality of Timeline View furthermore. Now let's go through the history of Yahoo Japan's advertising business.

As you know, ever since the establishment of our Company, this is the very first business model that we pursued. We have new products and there have been changes in the products because of the product lifecycle ending.

And these days we have YDN and smartphone advertisement increasing. So those are becoming our drivers.

So while those are giving us a further momentum, we would like to start new businesses such as [via] premium DSP, so that we can come up with the foundation for the next cycle. So that is gradually taking shape as we start this business model.

Next let me talk about auction business. This is -- the transaction value of the auction is shown here in the left-hand side.

And the right-hand side, this is -- that's the gross ratio of both transaction value and revenue. And also I mentioned earlier [understanding] from that's -- in the last Q3 we have that's the last-ditch special demand immediately before the consumption tax rate was [experienced], so this is some kind of [indiscernible] [fall] we experience in this specific quarter.

But now when you look at the full-year transaction value, we could have the record-high transaction value in the end. And so far 2007 was the previous peak of -- that's the Yahoo Japan's and transaction value peak and since then we have been struggling.

And then past seven years, that's thanks to all these results of the structural reforms that now we have again -- we have this peak. And also we have a very good fundamental and the number of the bidders, number of -- that's the -- of the persons who [went over that] and the products and they have been increasing, so that we'd like to have a steady growth after this onward.

And the more transaction value we have, that will help the revenues. So that we'll actually try the account efforts.

Next let me talk about the membership services business. So now we have exceeded the 10 million premium memberships for the first time and also for there is the payment memberships and we have for example that they eliminate some kind of the privileges for the partnerships for the auctions, but now we're just worried about some kind of decline in membership, but we'll also will have to add a new premiums and more benefits and also we started working together with the Y!mobile, as well as SoftBank so that we can acquire a lot more members.

So that's why in all-in-all and we have this the highest number of the memberships. After this we'll like to talk about the investment stage business.

And first of all and this is the left hand side, this is the quarterly transaction value and right hand side, this is the growth rate year-on-year basis. So when it comes to the shopping and we have some reaction for from this that the last year's demand before, middle year before that the introduction at the new construction tax rate so that's still and excluding all this impacts now we are getting out from this downtrend to that getting into that's the growth surpass.

So compared to that you have shopping, one-year ago and the country now we have a very excellent and promising situations in shopping and this is the breakdown. And now we have the more numbers of the store IDs and the sellers.

And so that this is an original plan. The fronts will often the number of the store IDs and the number of items listed and so that sometimes where I'll just criticize it that there wasn't any items for their shoppers to buy on the site, but now and only a little over one-year now we have this number of store IDs and this number of items listed.

And without that, we cannot disclose the specific numbers, but when it comes to conversion rates and year-on-year we have the growth in two digit growth in terms of conversion rate year-on-year, therefore in the previous year so far and strengths of the Yahoo! Shopping was very, very strong customer basis.

But since there was no any specific items to be shopped, then why we cannot have the better conversion rate, but now that just like this, we haven't -- there is a growth of conversion rate of more than just like the double-digit. So that we like to have now then establish the basis of this and the shopping businesses and also including that premium memberships.

And they visit our site. They can find out the items they can purchase.

And we're sorry that we cannot disclose the conversion rate, but now and happen turnaround from the Q2 and just like this is the trend of the growth. Now just like that, I mentioned earlier the conversion rates are growing on a double-digit basis.

And a result of that we are having the more of the shoppers and more buyers numbers like this and when it comes to that unit price of -- average unit price and also this is now have some adversely effected from that and reaction for and for the special demand before that the consumption tax rate hikes, because there are a lot of expensive items that are still both and before the consumption hikes where it raises. So better now and we're only now and we think that unit price have been stable like this.

And then when it comes to that in order to increase that the shoppers and buyers we have implemented a lot of promotions and for example the leading, there the traffic front, the Yahoo! and the Yahoo!

services, the Yahoo! Shopping and we implemented a lot of on lot of things and what has been really effective so far is that the one where we have started at the March.

And if you are premium members and you can have a five times and the more points and if you shop something end of the March, and so that when you compare to this -- we don't campaigns and about the 20% and more of the purchase as is recorded and with this campaign. So this has been ton of really effective promotions so that we'll like to continue this promotion campaign and by implementing this type of the promotion campaign there we can have more acquisition of premium members as well.

So I think that this has been a very good promotion campaign. And as the results of the new strategies and also we just explain about this and the progress things, but in the past 14 years and we cannot be the number one, number two.

So, we have been struggling and this, the shopping and business and the first step we implemented was the increasing number of the sellers and product [indiscernible] the margins, so that this is our first step. And after that we have more items to be sold in the sites and we have had more attractions after the sites and also the competition among to the margins and have been really to that's the higher quality and the sites and in the past six months and we are just trying to -- and have beginning to realize the improvements of the conversion ratio.

And also the quality of the site is now actually improving. And now once we have those and increasing conversion rate and we're going to have a more customer traffic to the site.

And we're getting into that's a very good cycle like this. Still and we're just using that the color red and grey in just a more conservative way, but I'd like to make all this and the process the red in the next year.

And eventually we'd like to have a more the buyers and sellers and also a little more the buyers and the margins and the shops owners, they can have more revenues and they can [indiscernible] and they can have more businesses there than the Yahoo! and they like to send more on the promotion expenditures and expenses on the Yahoo!

sites and that will lead to our incremental revenues. So a further two or three steps are needed but finally and I would like to get into that closest circle and this process.

And after this Corporate Officer, Mr. Tanida, will explain about the credit card business.

And my name is Tanida and thank you very much. I am going to explain about the credit card business.

Firstly YJ Card, this is the company profile, regarding the shareholders Yahoo! Japan has 65% and SoftBank Payment Services have 35% and you see the history as indicated here.

YJ Card has two services, so let me share with you what are those services. Firstly, its Yahoo!

Japan card, this is the credit card service; the second service is related to SoftBank prepaid card and we provide automatic charge function and YJ Card is providing that functionality. So today I will like to give you the details related to Yahoo!

Japan card. So we will like to offer convenient and satisfying shopping experience to each and every cardholder and so in terms of that we only had JCB but we added Visa, MasterCard and JCB and we have six covers including red and black and the annual fee is zero for life and interest of point no matter where you use it, you will have 1% for order shopping and if you shop at Yahoo!

Shopping and LOHACO, you can have 3% for every purchase and ezPay fee will be free once a month and Yahoo! Japan card can enjoy platinum grade production and you pay JPY500 per month.

What this is platinum grade protection? It's not only e-Commerce but travel or event wise you operate say because in emergency you cannot take a trip or you cannot go to a concert and this protection will actually guarantee you from not being liable for the payment.

So we would like you to leverage on this platinum grade level protection. Regarding T-Point issue rate, this slide shows the details, Yahoo!

Shopping wise you can have 1% for each shopping, but if you are Yahoo! Premium member, then its four fold and if you use the Yahoo!

Japan card there will be another two fold. So you will be able to enjoy about 11 fold T-Point increase.

And also we will like to provide attractive services to the stores. And so the settlement fee will be slightly lower if Yahoo!

Shopping card is being used. So this is well received by the merchants.

And in terms of Yahoo! Japan card, how do we acquire new members?

We conduct promotion on shopping card and we will be providing 5,000 points and especially the users appreciate the fact that it takes only as little as two minutes to become a card member. And in shopping we are promoting the acquisition of new members.

So we are the multi big data company and so we have different measures leveraging on our capability to process big data. We use data to find out that this person is indeed e-Commerce user and we provide a timely advertisement on Yahoo!

Japan card, which will be a very targeted promotion. So that at Yahoo!

Shopping we will be able to acquire new members. Credit card business has a positive repercussion on other businesses of Yahoo!

Japan. E-Commerce wise in terms of settlement fees, we will be able to increase the revenue from the settlement fees and use that for T-Points and maybe we will be able to lower the settlement fee rate for stores.

So by making the settlement fee close to zero we will be able to increase our revenue based on credit card. And also in terms of advertisement, we will not only have big data, but also settlement data, so the accuracy of targeting will increase.

So in the end of the day it will contribute to the increase of advertisement business. Now thanks to the members, we are growing our membership of both cards and we are enjoying the success of e-Commerce revolution and we want to generate profit from these card businesses.

Thank you. So I have presented to you the full year results and the fourth quarter and focus on the credit card business for the past three years but the hindsight we can say that we experience a different trend with the aim of the success and there was a shift to smartphone and there were some incidents I related to the users, some hiccups and also whether we're going to do again or not and that was a question for some time.

And we had to change our mental framework as well and I am sure that in the next three years internet will grow further more and Apple Watch was launched in the market as a new device. I am sure that in the next three years internet will be more exciting.

Amid such a backdrop we will like to dive into new waters and we want to continue being a problem solving engine whether it be users or clients. There are some users who are not familiar with the internet and also in terms of SMEs and local companies, who are not completely digitalized yet.

We want to provide the capability of Yahoo! so that they can be satisfied with the solutions and we can have a win-win partnership.

Thank you.

Let's open the floor to question. If you have any question please raise your hand and our staff will bring the microphone to you.

So would you please mention the name of your company and your name before making question? And if you have any multiple questions and please make a question one by one, please.

Would you please raise your hand if you have any question? The person who is sitting that backside of this middle.

I am Takeda of UBS Securities, I have two questions. And my first question about the forecast of -- you mentioned about the release that you get that dividend doubled and starting from this meeting and you have eliminated a slide about this impacting some forecast of this businesses?

And Mr. Miyasaka mentioned that you're going to keep growing, but all will be deliverable growth after this onward in your ideas.

So then also they are getting together with your ideas about how to double the dividends? This is my first question.

May I?

Would you please make your question one by one please?

To double the profits, when I say that the -- so this is a must for the IT company, so that otherwise we cannot survive in this global competition in the market and in IT companies. And Yahoo!

Japan have some substantial size of the internet company and in Japan -- from the global perspective and still this skill was not enough. So that's why at least we have to achieve that double the profits, otherwise we cannot survive the market.

This is my sense of urgency and crisis. And so when it comes to timeline and for example when you try to achieve that double the profits by sometime in 20 -- or something before the 2020, but now the business environment have a changed and also we are having furthermore and promising for business opportunities like e-Commerce and credit card businesses.

So that's why we have to make some upfront investment now so that we can grow and leap the profit, enter the next stage. So that's why I have to timeline the schedule, will it be just pushed forward a little bit and but now if we insisted so much on there are some specific to 2020 or it's something before the 2020 was something in 20XX year and demand will likely will have to regress something.

So that's why and not so much when you're insisting at a specific timeline, but also we'd to focus on making that and this is investment now.

My additional question is that now tracing back from that about the double the profits and you mentioned a little bit over the 10% of the growth in each year, but it was very easy to understand. And now you mentioned about double the profit is sometime in the future, but then for example and you are going to have business steps, some numerical target for this year or that this is the year, two years ahead or are there any kind of the targets you have set up and/or even you mentioned the cruising speed of a little over 10% will be that's the requirement for the cruising speed and account business environment, do you have any kind of a target or something?

And when it comes to the premium memberships or the advertising and internet auction, and [indiscernible] are at the core of the business and this is we like to enhance this business and also the others -- the investment stage business, and the shopping, and credit card business, finance business, it you want to [indiscernible] this business into the profitable that we can accelerate and boosted the business. So this is what we expect in the future.

Okay, thank you very much. My second question is that any in your presentation, you'd like to become number one in application, access by applications, but what and actually be doing to become the number one in applications and in the [indiscernible] in order to become a number one and also have to be the number one in other specific business in this service area that any application areas.

Which is the specific area you'd like to do and the area and what you're doing.

Now we have about the 100 services and offer there in the PC so that we don't generate and create 100 different applications, that's too much. But another way we have to choose and concentrate in which specific area we have to develop an application.

So maybe we like have to do constantly some services and in case of the three services offered on PC, but one the smartphone applications can cover all the three order, kind of a selection and consultation should be done. But when it comes to in the specific domain of applications and I like to -- I don't want to discuss so much in the details, because then our competitors will listen to our -- and talking.

So that anyway and I like to have in a strong area in the PC, so then will like to also have to follow-up that areas and making that application in smartphone also strong. So that in a country strong areas I would also like to also cover and become the number one in the smartphone application..

Thank you very much. I am Nagao of Nomura Securities.

I have three questions. So first question, when you turn into the unit price and the number of by years in Q4 there was a backlash of the consumers or consumption tax hike, so there was a decrease.

But you have to have more buyers in order to catch up. But in terms of conversion rate, I have difficulty understanding a two digit growth, but anyways you are growing and so there will be more users coming into your site.

But then to-date you are not able to enjoy the number of traffic that you wanted. But in terms of the number of stores based on the ID it increased from 80,000 to 240,000.

So it seems that you are not necessarily leading to the increase in the number of users. So in Q4, why do you think you do not enjoy more buyers or visitors as you have expected?

Last year there was, before the past increase, [brush] increase and in a March the number was very high. So comparatively speaking you see a decline.

And also in terms of the premium member, we had five fold points and started in March and that was very effective. So if you compare February and March, you see a favorable trend.

But we just started that campaign in March only one month. So in terms of the transaction value of last year and if we compare that of this year, we were not able to outdo, that was again characterized by the last minute shopkeeper the tax hike.

Now in terms of the advertisement related content, I understand that you're able to turn positive and I don't want to ask you any nitpicky question, but in terms of the decrease of one digit, but in the end of the day you were able to increase your profit. So this quarter wise I do not think that there will be plummeting of the number.

And when you turn to Page 5, which is [indiscernible] in terms of paid search it will be flat or slight decline. So can you tell me what is the status growth?

This is a very ballpark question, but are you really concerned about paid search sales and profit?

In terms of paid search in Q4 as you have mentioned, it was better than we have expected PC decline, but that decline is getting stable and we've taken different sales measures and we improved the logic of the matching sale. So we took different measures so that we can increase the revenue.

Having said that, in terms of mid to long-term trend, PC is declining and smartphone will be making up for that decline. But for some time the decline in PC will be higher than the making up that can be registered by the smartphone.

And so there will be a decrease in revenue in the single-digits mid to high level.

And in terms of the infeed advertisement, will it boost your revenue? What will be the impact of infeed advertisement?

In terms of the contribution to the revenue and profit, unless we start infeed advertisement full-fledged, we cannot tell you the concrete potential that it can bring. We are conducting test and trying to see what if scenarios and after going through the exercise we can see that high unit price infeed advertisement is providing favorable impact.

So I cannot give you details, but that is the ballpark result that we got going through the what if scenarios. Of course we are looking forward to trying more infeed advertisement, but first of all we want to use this to support Timeline View.

Right now 20% are shifting to Timeline View and most of them opted to shift to Timeline View. They wanted to try new orders and so that means that they are continuing using Timeline View and the performance is high.

So, they are using Yahoo! top page as the media.

But on the other hand we have 80% of the people who are not using Timeline View yet. And if the test result is bad, we will not launch it on May 20th, as I don't think that it is that a pathetic a case and we believe that it will be successful and once we can be sure that it will be accepted by the users and then infeed advertisement will contribute to our total revenue and profit.

Any other questions?

Okay. The one sitting in just well, back.

Thank you very much. I am Yoneshima from Barclays Securities and my first question is that in you guidance you mentioned that excluding the revenue of FX and it have the increase in both the revenues and profits and so let me just check it out.

And I wonder if there is still revenues of that FX from the March 2014. And also about JPY10.3 billion was for the order total revenue increase and what happens, what's the contribution from the FX it had?

In absolute values announced and annually now kind revenue of the FX was about JPY3 billion to JPY4 billion operating income was the annual operating income for FX. So when it comes to the gross profit, I am going to check it out and give you that you later.

My second question is that when you look at the Page 5 of that your top-line reporting and financial results and you mentioned about for the prospect for the future and the last pages and including March 2016 you have said that the gross profit including the March 2016 for several years including March 2016, what does that mean? For example and for the other core businesses have grown or made a big recovery or something or now it means that you're going to accelerate that fund investment for the future or I mean that this is at a usual [indiscernible] funds investments and if there is any ideas about this fund investment?

Well, when it comes to investments, we make investments and necessary investments in proper timing when consumer ROI, this is the basic ideas. So that we have to also look that about what kind of the profit growth now we're in so making the decisions of investments.

But in the next couple of years, whether or not we can have some of the incremental profits can we all spend up and used up for all this upfront investment, we don't think so, that depends on the business plan. So based on those specific business plan, after that we have to make that amount of investments.

But in the next several couple of years, excluding FX business and for example the focus of the profit growth and the targets of 3%, 5% and 10% it any kind of specific measurement with the targets and profit growth you have in mind. Yes, and first of all in FY 2015 our image about the revenues will be that for advertising still that the YDN will take the lead and order the videos and that will take the lead out of the profits.

So we can have the growth of about more than between 9% of that kind of growth. But also for the auction we have more revenue due to that increasing their transaction value.

But on the other hand as we explained in the presentation, the shopping business, the credit card and then also we spent our more of the higher level of capital expenditures. So that's the profit level and we'll not go along, well completely with that revenue growth.

So that's the profit level, and will not go along completely with that revenue growth. So that we're going to have to move profits and there'll will also profit growth.

But that margin of the growth is not that substantial.

Okay, understood. My last question is that you mentioned in page 55 of your presentation the shopping.

And just to point back on the two points and four times of that two points will be back if your premium members [indiscernible] campaigns. And this means that these were the permanent promotions or now they have the more of the unit price will go up and you're going to have some negative spread with this promotion.

So for this four times the points and returns and will be more specific about the promotions and what will be the -- and Yahoo Japan will bear the cost of this special point campaigns or that would be split between YJ Card or with other players?

Okay, let me explain about the current promotion plan. This is -- but this point campaign is a promotion campaign.

This is [indiscernible] so this is not permanent campaign. So that when we look at all this, how much of the transition value increases and how many of the premium members increases, or how much of the advertising revenues goes up, so that we're looking at these -- all the results of the campaigns, we decide whether or not we should -- how long we will continue this.

But all this cost of campaign is we bear all the cost of this campaign, Yahoo Japan.

I am Tomimatsu of Merrill Lynch. I have questions related to credit card, then auction, and then the other one is ez, and last one is incentive.

Regarding credit card, I have question to Mr. Miyasaka.

So what will be the fruit of success down the road? On Page 59 you mentioned, by increasing the income from credit card, or are you talking about the synergy with advertisement on other business domains?

So based on that answer, say, if you want to expand the profit from credit card, how are you going to go about it? And in terms of merchant fee, you cannot just depend on that for increasing the profit from credit card and other companies coming up with different measures to increase profit from credit card.

So, can you tell me the strategy that you have vis-a-vis credit card?

So in terms of Yahoo e-commerce wise, we have about JPY1.2 trillion. And in terms of advertisement, the settlement is conducted by credit card.

So, already merchant money is flowing on Yahoo, but other brand credit cards are used right now, so we would like to internalize those credit cards. So that will be point number one.

And another one is revolving of payment, that we want to promote that. And of course we have to have the card members.

So we will have a dialogue with the card members and try to increase the revolving payment ratio. And based on experience, in terms of Yahoo Japan card, we have been conducting this business for some time and the more you have the Yahoo Japan card, more you will use the card and auction and shopping and reservation and travel, i.e.

e-commerce will enjoy the usage of credit card. So this is indirect contribution and we have high expectation toward that increase.

Thank you. Second question is related to system, you have the credit card system, and I want to know how you're going to operate it and how you're going to outsource some of the functions related to credit card processing.

In terms of the credit card system, right now YJ Card owns the system. Regarding the development, in terms of web, we will be injecting the capability of Yahoo Japan.

And in terms of the mission-critical portion, YJ Card holds the system, and we are also seeing in that system. But in terms of software itself, a person who knows about YJ Card will be designing that software.

And with the increase of card members, we will make the changes to the software and come with more hardware systems. But we will be leveraging on the current system for some time, and I think that is suffice.

Thank you. If you turn to Page 59, is this that you can use the settlement data, and in terms of credit card, the settlement data, you have YJ Card and you can use the data within that credit card business?

But in terms of the group companies based on personal information law, I find it difficult to believe it. So can you tell me whether that is a feasible scenario or not?

Firstly, we will have the opt-in of the card member. And having the opt-in, I guess we will be able to leverage on the private data.

Yes, it pertains to private information, and if we were to work with the third party, we need to get the consent of the individual card holder. And we don't want people to be concerned, and so we will have the privacy policy well-defined, and by expanding the understanding amongst the card holders, we would likely increase business.

Now next question. I think auction can be another domain for revolution.

Rivals are growing and smartphone usage must be simplified, and also settlement can be conducted and controlled by Yahoo, and I believe that auction, that will change, and I know that announcement is being made for May, i.e. that applications might be changed.

So, can you tell me what kind of measures you are planning to take for auction business to grow furthermore?

Regarding auction, as you know, the competitors [of free] market is very simple to use, so we have to be on par with them. So, regarding applications, maybe in May or perhaps June we will make a major change so that the users can be simplified.

And regarding the transaction, we have to make it simple. So, instead of having a footnote that actually excludes a small amount of shopping, we will -- may get simpler.

And we will have affinity with the credit card business, so that in terms of the auction, we want to leverage on the credit card, so the credit card will be used furthermore for settlement.

You have ez and premium, and say you have different campaigns with number five as the core, meaning May, which is 5, will be the day in which you will have different campaigns. And I know that Yahoo Shopping is well-received, and in April I think the number should reflect that acceptance by the customers.

And in terms of the premium member, you should have net growth. Would it be YDN or not, you need to have the positive impact on the premium member.

And in terms of the April number for shopping, can you tell me your comment related to the relationship of the increase in shopping with the increase in the premium member?

In terms of the numbers, I will take that question. Well, I think we are having a good start.

Come April, transaction value is growing steadily. And in terms of the transaction value of FY 2015, in terms of 2014 we were able to grow about 10%.

And in FY 2015, we want to further grow to the magnitude of about 20%. And we issued -- poised ourselves to aim at that number.

Having said that, in April, we ended April as you know, the momentum is higher than we have expected. And in terms of the acquisition of new premium members, we need to be patient.

We will not be able to see the impact overnight. In terms of the acquisition of members based on shopping, comparatively speaking, we are increasing the premium membership.

And as time passes by, I believe that we can leverage on the premium membership to increase our revenue.

What do you want me to say?

If you want to comment on what Mr. Oya said.

Okay. I am in charge of shopping, so I will speak up.

It seems that I am not given an opportunity to speak over the microphone, but let me venture to answer your question. In terms of premium member, we give five-fold points and stores, well, receiving this campaign, and also this is a very clear incentive for the premium members.

And so the premium member is increasing accordingly and premium members actually start using auction program. And we have the request to shift that the buyers program, and we are conducting a pilot run and in March and April we are seeing increase of the premium member.

And we are seeing a very definitive growth. And premium members actually become members to use auction.

Say, out of 10 million people, there are many people who are not using Yahoo Shopping. Therefore, we are using a five-fold point award.

And so we should not continue this forever more, but rather this is a time limited offer of providing five-fold point. As mentioned by Mr.

Oya this is event driven campaign, and so it is not everlasting. And whether it be buyers or sellers, this program is very well-accepted.

And in terms of Mr. Takeda, he mentioned about doubling the profit, and I guess it is related to the stock option condition.

And so if you cannot actually attain this call, you will not be able to enjoy the stock option program. So in terms of incentive for the market, do you have anything clear, say in this certain quarter or term the management must achieve XYZ?

And it seems that you don't have any incentive program, and are you okay with that incentive program, do you realize this goal of doubling your profit?

Thank you very much for being concerned for us. In March 21, we want to have operating income double-fold.

Of course that goal hasn't changed. It's not that we are actually cancelling this.

No. And it's not that our incentive operating will be nullified, that is not the case, whether it be shopping or credit card business, those are very future potential high domains.

And we have to strike a balance between the core business and the future business that we should be investing in. And I believe that shopping and credit card must be nurtured for the future.

And that is why we provide you the presentation today.

Okay. Next.

In the middle block and third row from the front ways.

I'm Matthew from CLSA, and I have two questions. And first question, about the Yahoo in the U.S., the country, they use adviser, and they're just discussing how they should deal with Yahoo Japan's shares and stocks.

What do you think about that kind of behavior, of actions by Yahoo Inc. in the USA?

Yes. Thank you very much.

When it comes to comments they made in the business results meeting, and we didn't know about that comment was made and that meaning. And after that earning call, we had a discussion with a Yahoo Inc.

so that we confirm the background of the comments and also we have some discussion, what should we do with it for the Yahoo Inc. in the U.S.

and for their own shareholders, they like to maximize the value of their stocks, shares of the Yahoo Japan, that's the obligations further on. So, holders, they like to listen to the advice from the third parties and for all this other person.

So that how they can and now they consider how they can maximize the value of our stocks. But on the other hand, this Yahoo Japan started a joint venture with the Yahoo Inc., and because they are the strategic partner and also we have very strong relationship in terms of operation and the finance also for -- Mr.

Ken Goldman, the CFO, is part of this and executive members. And then also -- we have the title of Yahoo and also we're part of the very important and part of that and whole of the global Yahoo operations.

So this is the comment they made. So they tried to heighten the value, corporate value, for their own shareholders, but they would like to avoid any demerit and disadvantages.

So after this, we'd like to continue that close discussions with them and try -- so that we can find out the best way.

Okay. And here in Japan, it's really easy for us, and with the very low interest rates, you can borrow the money and lot of the monies, and I think that new presentation is really good presentation for them, but they can -- but a lot more shares.

Now the core business cash flow is very steady, so that's why -- but [indiscernible] for example $3 billion or $4 billion can be borrowed, and for example you can buy all of that that Yahoo Inc., the shares and they're canceled after that, and that will be of your benefit, and also for the current shareholders of yours, right?

As I mentioned earlier, we're trying to find the best way and direction together with the Yahoo Inc. in the U.S., so that this is really important.

And also nothing happened yet, so that we don't make any specific comment about this. And when I look at the media were reporting, it was just -- it was reported in the punch line and the media so that we're surprised also, and it was really widely and amazingly reported in the media.

But after this, we get in touch with them and -- after that, and this is a very, very important issue, so that we need to discuss. That is the message to them.

And so we have to consider with each other. That's the communication and discussion we have with them.

And -- but we have to find the best decision, make the best decision for their shareholders of both companies, both Yahoo Japan and Yahoo Inc. So that at this moment of time, there is nothing finalized and determined.

And what's important is that we'd like to have a closer communications as close as possible. This is what's most important we think.

That's my answer to your question.

I am Mori from JPMorgan Securities, I have three questions. First question is that in the -- this is about Q4 and Page 79.

And this is about the YDN or the other services and have been made, upwardly revised from the previous guidance. And when it comes to that number of Premium DSP was shown in the last time, and so, would you please give us a breakdown here, and can you maintain this growth trend and momentum also this year?

This is my first question.

Okay. When it comes to the YDN and others, to be honest with you, it is just more favorable than we had expected, but we have implemented a lot of the measures, and for example the backend side or the sales or the user interfaces, for all these measures, successfully did very good.

And when it comes to Premium DSP, it is Q4 over JPY1 billion and -- JPY1 billion and a couple of hundred millions. And this is just the growth we achieved this quarter.

And when it comes to our forecast after this onward, when it comes to fundamentals of this business, and we think that we can maintain current momentum for the time being. But when it comes to specific margin of growth rate, and we have more and the basis, so that for -- including the DSPs -- and it would be about 40% or more -- more or less the 40% through the fiscal year 2015.

That is our basic forecast. And when it comes to Premium DSPs, the contribution of Premium DSP is that, and also this is stock-based business, and so they will steadily grow just moderately, and after Q2 about JPY1.5 billion to JPY2 billion per quarter can be visible as a forecast.

So, and the two years ahead and the year after next year, as mentioned earlier, that we could expect about the JPY10 billion an annual level of the business.

Okay. Thank you very much.

My second question is that, in the listing, advertising in Q4 was also better than expected. So that, is there any change in that the smartphone, the search, service -- the share of the search services and smartphone something?

Are there any favorable change in that?

Okay. So generally speaking, there's no so much substantial difference in change in the shares services.

Do we have anything to add? Nothing in particular.

So there is no so much of change and difference so far.

Okay. Thank you very much.

My last question is just for my confirmations. As for the shopping, also it seems like that -- from the previous guidance meeting in January, and now you're getting all the more aggressive and bullish about some of the buyers, increasing the merchants, all that.

And also Mr. Miyasaka mentioned about you have to be overwhelming number one in the number of buyers and shoppers there, so that, is there any plan to, for example, to [frontload] some kind of the plan and the promotions for increase, increasing that number of buyers, but are there any kind of --

Yes, and we mentioned about to increase the number of buyers, but at the same time we have to keep doing and keep our utmost efforts to increase the number for sellers and the merchants. But although today we are focused on our specific actions to increase the number of buyers, but still we have to keep increasing number of items listed.

There are a lot of things that's not available on the, you know, for shopping sites, so that we have to keep increasing the number of the merchants, the number of the items listed, and while doing our focusing on increasing the number of buyers. So -- but we have just -- doing something, for example, from the last shopping season, the yearend, and for leading the traffic from the search engine services to the shoppers, but -- so that we'd like to do -- go to both directions, increase the number of the merchants and the number of items that we sold.

And also at the same time also focus on increasing the number of buyers. We are doing the both.

I am Maeda of SMBC Nikko. In FY15, you mentioned about revenue, and can you elaborate on the promotion cost for example?

You mentioned about credit card you're going to spend about JPY4 billion. Can you give me overall expense figure?

And also you're impacted by Google's commissions, so can you tell me about that impact? And what is the cost that you can actually reduce?

So in terms of the revenue, if your cost goes up, you might be able to not really enjoy dramatic increase in revenue full year. And in terms of expense, are you going to focus more on the first half or on the second half?

Because if you focus your expense on the first half, you might fall into reduction of profit or income.

In terms of cost for credit card business, we will be spending about JPY4 billion as an upfront investment. In terms of shopping, I cannot give you any quantitative figure, but we will have measures for buyers as well and conduct aggressive promotion.

Regarding CapEx, we will be increasing it by 30% year on year. And depreciation of cost will increase by yet another 30%.

So full-year-wise, that means we will have an increase of about JPY6 billion. In terms of the contract with Google, we will have a new contract with them from this fiscal year.

It's very difficult to give you any quantitative figure, but in terms of sponsor search profit growth or reduction of profit, it acts to decrease the profit by 2 to 3 points. All in all, as you have rightfully mentioned, it's not that our profit will increase in line with revenue, but rather we will outdo the fiscal year.

That will be the magnitude of an increase.

What is the balance of expense regarding first half and second half?

We have to look at the full year business cycle and it hasn't changed from the previous year, and we will have a promotion in the end of year, and that's what we were doing every year, so - year on year. In FY 2015, we do not have any plan to change the balance of expense between the first half and the second half.

Thank you very much.

In terms of promotion and advertisement expense, Yahoo Japan as the advertisement media, we were number one. And at the same time we have shopping auction and travel, i.e.

we have diversities of business, and so that there will be a different advertisement on non-Yahoo. So we were one of the major clients as well.

And we had different departments, so in terms of the advertisement placing order and the operation, it was in different silo. But by going through the organizational change, we have been centralizing this function.

And it boils down to streamlining and cost. We will try to be more rational and efficient in coming up with our structure.

And so we have a big marketing department that started functioning as of April. So the more database that we have related to advertisement, we will be able to have a very good cycle and there will be feedback into the advertisement department as well.

So we have the provider of the site and also we are the advertiser itself. So we have two faces, so we are wearing two hats.

This is the end of the presentation. Thank you very much for participating.