“This year, we will increase the competitiveness of Kakao’s’body’ by aggressive business expansion centered on Kakao Talk.” (Minsoo Yeo, Co-CEO of Kakao)
Kakao surpassed 4 trillion won in sales last year. This is the result of the growth of KakaoTalk-based businesses, contents, and new businesses with’non-face-to-face benefits’. This year, Kakao plans to expand its business, including advertisements, subscriptions, payments, and reservations, focusing on Kakao Talk. In addition, the company plans to initiate IPO (IPO) of its affiliates, while also launching environmental, social and governance (ESG) management.
On the 9th, Kakao Co-CEO Yeo Min-soo said, “This year, you can see phrases such as’Please order through the Kakao Talk channel’ and’Please make a rental contract through the Kakao Talk channel’ more often in a conference call (telephone conference) that has continued since last year’s performance “In 2021, Kakao is preparing a lot of changes to make it easier and more convenient for users to enjoy their digital lives. Through IPOs of various Kakao communities, we will strive to further increase the business growth and shareholder value.”
On this day, Kakao announced through a performance announcement that last year’s annual sales based on K-IFRS (Korean International Financial Reporting Standards) increased by 35% compared to the previous year to KRW 4,156.7 billion. Annual operating profit increased 121% year-on-year to 458 billion won. Net profit turned to a surplus from the previous year’s deficit to 167 billion won. The operating margin was calculated at 11%. In the fourth quarter of last year, sales were KRW 1.235 trillion and operating profit was KRW 149.8 billion. This is an increase of 46% and 88%, respectively, compared to the same period last year. This is the highest quarterly record ever. The net loss for the year was 2017 73 million won, a 54.3% decrease from the same period last year.
Room performance is in KakaoTalk
Kakao’s sales are largely divided into two. It is the platform and content sector. Sales of the platform division, including TalkBiz, Portal Biz, and new business, increased 50% year-on-year to KRW 2,145.9 billion. In the fourth quarter of last year, sales increased by 19% compared to the previous quarter and 48% compared to the same period of the previous year, totaling 65 billion won.
KakaoTalk-based business person Talk BizLed Kakao’s performance. It posted sales of 1,117.8 billion won, up 72% from the previous year. In particular,’Biz Board’, the top advertisement on the Kakao Talk chat list, achieved 1 billion won in daily average sales in December last year, which doubled compared to last year. KakaoTalk channel sales also increased by 42%. Representative Yeo Min-soo said, “Business tools such as membership registration, purchase, reservation, etc., which have been prepared since March, will be provided in sequence. This year, Kakao Talk will greatly expand its role as a business platform.”
On the other hand, it is observed that the influence of the portal is decreasing. Kakao’s search ad sales declined in the aftermath of Corona 19 Portal Biz The sales declined 9% to 477.8 billion won. To respond to this, Kakao is planning to revamp its search advertisement products. Representative Yeo Min-soo said, “Search ads and display ads One platform based on Kakao accountWe plan to open a new keyword advertisement platform to actively promote’cross-selling’ within (One Platform·Integrated Platform).” “Advertisers are increasing their advertising budget for Kakao,” he said. “We are aggressively holding Talkbiz sales growth this year at about 50%. It is quite challenging as the base itself is growing, but it is sufficiently achievable given the expanding trend.”
Commerce is cruising. Including gifting, talk store, and makers Kakao CommerceQ4’s transaction amount increased 71% year-on-year. Gifting and Makers showed strong performance, increasing 52% and 60%, respectively. In Talkstore, including’Talk Deal’, the number of stores increased by 72% compared to the same period last year, followed by a 292% increase in transaction value. As of December of last year, the number of monthly active users (MAU) of Gifting, Talk Store, and Makers reached 21.73 million, 13 million, and 6 million, respectively. CEO Min-soo Yeo expressed confidence that “Kakao Commerce will grow into a sufficiently competitive commerce platform as the number of active users, frequency of purchase, and unit price are all strong.”
New business aiming to turn profitable, targeting global with content
This year, Kakao is expecting an annual turnaround in new businesses such as mobility and pay. The new business division recorded 5501 billion won in annual sales last year, up 111% from the previous year. Kakao MobilityIncreased sales by securing 16,000 member taxis nationwide (Kakao T Blue) Kakao PayIs the result of evenly growing, with a transaction amount of 19.9 trillion won in the fourth quarter. Compared to the previous year, Kakao Pay is said to have achieved KRW 67 trillion in annual transaction value, an increase of 40%. Kakao BankLast year, it achieved’storm growth’ with an annual net profit of 1136 billion won.
Senior Vice President Bae Jae-Hyun said, “We are expecting an annual turnaround due to structural improvements in the mobility business, Pay, which has been actively investing,” and said, “It is expected that this will be a year when concerns about operating loss in the business are completely resolved.” . Regarding the pending examination results for the preliminary my data, “I have submitted all necessary documents related to the two major shareholders. It is still being reviewed due to delays in communication between financial authorities,” he said. “It is a problem in the process, but there is no reason for disqualification of Kakao Pay’s own My Data license. The full-fledged My Data service is being prepared with the aim of launching in the second half of the year.
In the content division, including games, music, paid content, IP (intellectual property rights) business, etc., sales of 2,108 billion won, up 23% over the previous year, were recorded. gameand Music content Sales increased by 25% and 4% year-on-year to 495.5 billion won and 6126 billion won, respectively. IP Business guitar Sales increased by 6% year-on-year to 374.7 billion won due to the increase in sales of video content such as Kakao M’s drama and original content, and strong record distribution. Paid content Sales were aggregated to 528 billion won, an increase of 78% from the previous year. Kakao JapanThe base effect of the K-IFRS application was reflected. In July of last year, Kakao Japan’s Piccoma became the number one digital manga app in sales in Japan and elsewhere. Last year’s total transaction volume increased 183% to 4146 billion won. Kakao is planning to knock on the door of the global market this year, starting with Kakao Japan and Kakao Entertainment (a merger of Kakao M and Kakao Page). Senior Vice President Bae Jae-Hyun said, “This year, Kakao Page is expected to achieve more than 700 billion won, and Kakao Japan’s Piccoma is expected to achieve more than 1 trillion won.” decided. “We will be able to reinforce the ripple effect in the global market through our unique IP value chain.”
Meanwhile, Kakao is also starting to strengthen ESG management in earnest starting this year. Following the establishment of the ESG Committee led by Kakao Chairman Kim Bum-soo in January, 12 areas of practice have been internally determined and 80 projects are underway. In the first half of this year, a sustainability report containing details of ESG activities for the first half will also be published.
On that day, CEO Min-soo Yeo revealed the ESG management plan and mentioned Chairman Kim’s’property half-social return plan’, which was released the day before the performance announcement. CEO Yeo said, “The environment, society and governance ESG Management is not very different from the reason for Kakao’s existence.” “(Chairman Kim’s) Increasing the corporate value of Kakao with this decision becomes the foundation for creating a better society and environment. It is expected that it will become a catalyst for opening a donation culture.”