6-K 1 d25149d6k.htm FORM 6-K Form 6-K
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of October 2020

Commission File Number: 001-37821

LINE Corporation

(Translation of registrant’s name into English)

JR Shinjuku Miraina Tower, 23rd Floor

4-1-6 Shinjuku

Shinjuku-ku, Tokyo, 160-0022, Japan

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F          X                Form 40-F             

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):             

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):             


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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

LINE Corporation

  (Registrant)
October 28, 2020  

By: /s/ In Joon Hwang

  (Signature)
  Name: In Joon Hwang
  Title: Director and Chief Financial Officer

 


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This is an English translation of the original Japanese-language document. Should there be any inconsistency between the translation and the original Japanese text, the latter shall prevail. All references to the “Company,” “we,” “us” or “our” shall mean LINE Corporation and, unless the context otherwise requires, its consolidated subsidiaries.

October 28, 2020

LINE Corporation Announces Summary of

Consolidated Financial Results

for the Nine Months Ended September 30, 2020

<Prepared in accordance with the International Financial Reporting Standards (“IFRS”)

as issued by the International Accounting Standards Board (“IASB”)>

TOKYO — LINE Corporation (NYSE: LN) (TOKYO: 3938) announces the summary of its consolidated financial results for the nine months ended September 30, 2020.

 

Company name:

  LINE Corporation (Stock Code: 3938) (the “Company”)

Stock exchange on which the shares are listed:

  Tokyo Stock Exchange

URL:

  http://linecorp.com/

Representative:

  Takeshi Idezawa, Chief Executive Officer

Contact:

  Kokan Ki, Executive Officer

Telephone:

  +81-3-4316-2050

Filing date of quarterly securities report: November 6, 2020

Payment date of dividends: –

Supplemental materials prepared on quarterly financial results: Yes

Financial results conference scheduled: None

(Yen amounts are rounded to the nearest million, unless otherwise noted.)

 

1.

Consolidated financial results for the first nine months of 2020 (from January 1, 2020 to September 30, 2020)

 

(1)

Consolidated operating results (cumulative)

 

(Percentages indicate year-on-year changes.)

    

 

Revenues

 

   

 

(Loss)/profit from operating
activities

 

   

 

Loss before income taxes

 

   

 

Loss for the period

 

 
For the nine months ended          Millions of yen             %     Millions of yen             %          Millions of yen             %            Millions of yen             %    

September 30, 2020

    180,240       8.1           7,169       —         (24,149     —                       (35,848     —      

September 30, 2019

   

 

166,702

 

 

 

   

 

 10.2

 

 

 

   

 

(27,521

 

 

   

 

—  

 

 

 

   

 

(36,224

 

 

    —          

 

            (36,834

 

 

   

 

—    

 

 

 

               
    

 

Loss attributable to the
shareholders of the Company

 

   

 

Comprehensive loss
for the period

 

   

 

Basic earnings/(loss) per share

 

   

 

Diluted earnings/(loss)
per share

 

 
For the nine months ended          Millions of yen             %            Millions of yen             %           Yen                                 Yen     

September 30, 2020

    (29,185     —         (35,940     —           (121.32)           (121.32)    

September 30, 2019

   

 

(33,961

 

 

   

 

—  

 

 

 

   

 

(40,007

 

 

   

 

—  

 

 

 

           

 

(142.09)  

 

 

 

           

 

(142.09)  

 

 

 


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(2)

Consolidated financial position

 

     

 

Total assets    

 

  

 

Total equity    

 

  

 

  Equity attributable    

  to the shareholders    
  of the Company    

 

  

 

  Ratio of equity  

  attributable to the  
  shareholders of the  
  Company to total assets  

 

As of      Millions of yen      Millions of yen      Millions of yen      %  

September 30, 2020

   568,333      161,371      143,895      25.3  

December 31, 2019

   541,352      174,663      158,133      29.2  

 

2.

Cash dividends

 

      Annual dividends per share
     

 

First quarter-end

 

  

 

Second quarter-end        

 

  

 

Third quarter-end        

 

  

 

  Fiscal year-end        

 

  

 

    Total      

 

      Yen      Yen      Yen      Yen      Yen  

For the year ended December 31, 2019

   —      0.00      —      0.00      0.00  

For the year ending December 31, 2020

   —      0.00      —                                                  

For the year ending December 31, 2020 (Forecast)

                                                                                                                                —      —  
Note:    Revisions to the cash dividends forecasts most recently announced: None
   Cash dividend forecasts for the year ending December 31, 2020: The Company has not yet made a decision regarding its year-end dividends.

 

3.

Consolidated earnings forecasts for 2020 (from January 1, 2020 to December 31, 2020)

Amid rapid international and domestic changes, there is a level of uncertainty within the mobile applications market for smartphones and other mobile devices, the main business of the Company and its subsidiaries (collectively, the “Group”). As the state of this market significantly impacts the Group’s financial results, it is difficult to formulate a precise earnings forecast. Furthermore, as the Company’s shares are listed on the New York Stock Exchange as well as the Tokyo Stock Exchange, we are also carefully considering risks relating to U.S. securities regulations. Accordingly, an announcement concerning earnings forecasts is not made at this time.

Notes

 

(1)

Changes in significant subsidiaries during the current period (changes in specified subsidiaries resulting in change in scope of consolidation): None

 

(2)

Changes in accounting policies and estimates

 

  a.

Changes in accounting policies due to revision in accounting standard under IFRS: None

 

  b.

Changes in accounting policies due to other reasons: None

 

  c.

Changes in accounting estimates: None

 

(3)

Number of shares issued and outstanding (common stock)

 

  a.

Total number of common shares issued and outstanding at the end of the period (including treasury shares)

 

As of September 30, 2020

     243,715,542 shares  

As of December 31, 2019

     241,133,142 shares  

 

  b.

Number of treasury shares at the end of the period

 

As of September 30, 2020

     12,222 shares  

As of December 31, 2019

     1,524,392 shares  


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  c.

Average number of common shares outstanding during the period (cumulative from the beginning of the fiscal year)

 

For the nine months ended September 30, 2020

     240,557,640 shares  

For the nine months ended September 30, 2019

     239,020,020 shares  

Quarterly financial results reports are exempt from review procedures conducted by certified accountants or an audit firm.

For the purpose of fair disclosure in connection with the release of the financial statements by NAVER Corporation, the Company’s parent company, and timely disclosure of the Company’s Summary of Consolidated Financial Results, the Company discloses the Interim Condensed Consolidated Statement of Financial Position, Interim Condensed Consolidated Statement of Profit or Loss, segment information and going-concern assumption in advance, and other information will be released as soon as it has been prepared. Supplementary information to this earnings release, including the Group’s profit and loss by segment, will be available today at the following IR website: https://linecorp.com/en/ir/top.

 


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1. Interim Condensed Consolidated Financial Statements and Selected Notes

 

(1)

Interim Condensed Consolidated Statement of Financial Position - Unaudited

    

(In millions of yen)

 
     December 31,
2019
    September 30,
2020
 

Assets

                                                      

Current assets

    

Cash and cash equivalents

     217,345       166,817  

Trade and other receivables

     42,680       50,496  

Other financial assets, current

     20,117       46,047  

Contract assets

     241       199  

Inventories

     4,740       9,164  

Other current assets

     10,518       10,187  
  

 

 

   

 

 

 

Total current assets

     295,641       282,910  
  

 

 

   

 

 

 

Non-current assets

    

Property and equipment

     25,024       25,781  

Right-of-use assets

     54,337       53,740  

Goodwill

     17,651       16,821  

Other intangible assets

     7,801       7,283  

Investments in associates and joint ventures

     64,194       106,486  

Other financial assets, non-current

     51,737       50,809  

Deferred tax assets

     24,095       23,942  

Other non-current assets

     872       561  
  

 

 

   

 

 

 

Total non-current assets

     245,711       285,423  
  

 

 

   

 

 

 

Total assets

     541,352       568,333  
  

 

 

   

 

 

 

Liabilities

    

Current liabilities

    

Trade and other payables

     43,710       49,987  

Corporate bonds

     —         143,393  

Other financial liabilities, current

     44,826       63,379  

Accrued expenses

     23,462       18,635  

Income tax payables

     3,963       3,422  

Lease liabilities, current

     11,487       13,425  

Contract liabilities, current

     25,752       28,165  

Provisions, current

     3,221       3,740  

Other current liabilities

     5,238       8,970  
  

 

 

   

 

 

 

Total current liabilities

     161,659       333,116  
  

 

 

   

 

 

 

Non-current liabilities

    

Corporate bonds

     142,851       —    

Other financial liabilities, non-current

     362       349  

Lease liabilities, non-current

     45,150       47,035  

Contract liabilities, non-current

     —         5,366  

Deferred tax liabilities

     1,071       4,986  

Provisions, non-current

     4,528       5,485  

Post-employment benefits

     9,617       10,419  

Other non-current liabilities

     1,451       206  
  

 

 

   

 

 

 

Total non-current liabilities

     205,030       73,846  
  

 

 

   

 

 

 

Total liabilities

     366,689       406,962  
  

 

 

   

 

 

 

Shareholders’ equity

    

Share capital

     96,737       101,641  

Share premium

     121,299       125,275  

Treasury shares

     (6,308     (63

Accumulated deficit

     (53,524     (78,326

Accumulated other comprehensive income

     (71     (4,632
  

 

 

   

 

 

 

Equity attributable to the shareholders of the Company

     158,133       143,895  
  

 

 

   

 

 

 

Non-controlling interests

     16,530       17,476  
  

 

 

   

 

 

 

Total shareholders’ equity

     174,663       161,371  
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

     541,352       568,333  
  

 

 

   

 

 

 

 

–2–


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(2)

Interim Condensed Consolidated Statement of Profit or Loss - Unaudited

     (In millions of yen)  
     For the nine-month period ended September 30,  
   2019     2020  

Revenues and other operating income:

                                                                      

Revenues

     166,702       180,240  

Other operating income

     2,897       29,747  
  

 

 

   

 

 

 

Total revenues and other operating income

     169,599       209,987  

Operating expenses:

    

Payment processing and licensing expenses

     (26,406     (30,693

Sales commission expenses

     (12,197     (7,007

Employee compensation expenses

     (51,572     (58,321

Marketing expenses

     (25,566     (18,262

Infrastructure and communication expenses

     (8,063     (8,543

Outsourcing and other service expenses

     (30,619     (33,946

Depreciation and amortization expenses

     (16,324     (19,781

Other operating expenses

     (26,373     (26,265
  

 

 

   

 

 

 

Total operating expenses

     (197,120     (202,818
  

 

 

   

 

 

 

(Loss)/profit from operating activities

     (27,521     7,169  

Finance income

     400       233  

Finance costs

     (1,459     (1,525

Share of loss of associates and joint ventures

     (9,567     (10,658

Loss on foreign currency transactions, net

     (237     (1,395

Other non-operating income

     2,347       1,468  

Other non-operating expenses

     (187     (19,441
  

 

 

   

 

 

 

Loss before tax from continuing operations

     (36,224     (24,149

Income tax expenses

     (609     (11,699
  

 

 

   

 

 

 

Loss for the period from continuing operations

     (36,833     (35,848

Loss from discontinued operations, net of tax

     (1     —    
  

 

 

   

 

 

 

Loss for the period

     (36,834     (35,848
  

 

 

   

 

 

 

Attributable to:

    

The shareholders of the Company

     (33,961     (29,185

Non-controlling interests

     (2,873     (6,663
       (In yen

Earnings per share

    

Basic loss for the period attributable to the shareholders of the Company

     (142.09     (121.32

Diluted loss for the period attributable to the shareholders of the Company

     (142.09     (121.32

Earnings per share from continuing operations

    

Basic loss from continuing operations attributable to the shareholders of the Company

     (142.08     (121.32

Diluted loss from continuing operations attributable to the shareholders of the Company

     (142.08     (121.32

Earnings per share from discontinued operations

    

Basic loss from discontinued operations attributable to the shareholders of the Company

     (0.01     —    

Diluted loss from discontinued operations attributable to the shareholders of the Company

     (0.01     —    

 

–3–


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(3)

Notes to Interim Condensed Consolidated Financial Statements – Unaudited

Notes to Segment Information

The Group identifies operating segments based on the internal report regularly reviewed by the Group’s Chief Operating Decision Maker to make decisions about resources to be allocated to segments and to assess performance. An operating segment of the Group is a component for which discrete financial information is available. The Chief Operating Decision Maker has been identified as the Company’s board of directors. No operating segments have been aggregated to form the reportable segments.

Under the corporate strategy to allocate the resources generated from the Core business to the Strategic business, the Company’s board of directors individually assesses the business performance of the Core business based on revenue and profitability growth and assesses the business performance of the Strategic business based on profitability as well as important non-financial KPIs such as expansion of the user base.

(1)    Description of Reportable Segments

The Group’s reportable segments are as follows:

 

Core business segment    The Core business segment mainly consists of advertising service, communication and content. Advertising services mainly include display advertising, account advertising, and other advertising. Display advertising provides advertisements on services such as LINE NEWS. Account advertising mainly includes LINE Official Accounts and Sponsored Stickers. Other advertising mainly includes advertisements on services such as livedoor Blog, NAVER Matome and advertisements appearing on LINE Part-Time Job. Communication mainly includes LINE Stickers. Content mainly includes LINE GAME.
Strategic business segment    The Strategic business segment consists of Fintech services such as LINE Pay service, and other services such as AI, LINE Friends, and E-commerce.

(2)    Profit or Loss for the Group’s reportable segments

The Group’s operating profit or loss for each segment is prepared in the same method as used in the consolidated financial statements, except that certain items such as other operating income and share-based compensation expenses are included in corporate adjustments. Also, IT development expenses and indirect expenses such as department management fees are allocated based on the information such as the hours of service provided, the number of server infrastructures used to provide the service, or the percentage of revenues. As the Company’s board of directors uses the information after eliminating intercompany transactions for their performance assessment, there is no adjustment between segments.

 

–4–


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For the nine-month period ended September 30, 2019

 

                                                                                                                                 
                 (In millions of yen)  
     Reportable segments     Corporate
adjustments(1)
    Consolidated  
     Core business      Strategic
business
    Total  

Revenue from external customers

     144,881            21,821           166,702                     —             166,702  

Segment profit/(loss)(2)

     24,959        (52,412     (27,453     (68     (27,521

Depreciation and amortization expenses

     10,464        5,860       16,324       —         16,324  
(1) 

Corporate adjustments include other operating income and expenses such as share-based compensation expenses.

(2) 

The amount of Segment profit/(loss) is equivalent to (loss)/profit from operating activities on the Interim Condensed Consolidated Statement of Profit or Loss.

For the nine-month period ended September 30, 2020

 

                                                                                                                                 
                 (In millions of yen)  
     Reportable segments     Corporate
adjustments(1)
    Consolidated  
     Core business      Strategic
business
    Total  

Revenue from external customers

         155,795            24,445           180,240                     —             180,240   

Segment profit/(loss)(2)

     34,561        (50,080     (15,519     22,688        7,169  

Depreciation and amortization expenses

     12,697        7,084       19,781       —         19,781  
(1) 

Corporate adjustments include other operating income and expenses such as share-based compensation expenses. Other operating income includes the gain on loss of control of subsidiaries and business transfer.

(2) 

The amount of Segment profit/(loss) is equivalent to (loss)/profit from operating activities on the Interim Condensed Consolidated Statement of Profit or Loss.

The reconciliation of Segment (loss)/profit to loss before tax from continuing operations is as follows:

For the nine-month periods ended September 30,

 

           (In millions of yen)  
                2019                2020  

Segment (loss)/profit

     (27,521     7,169  

Finance income

     400       233  

Finance costs

     (1,459     (1,525

Share of loss of associates and joint ventures

     (9,567     (10,658

Loss on foreign currency transactions, net

     (237     (1,395

Other non-operating income

     2,347       1,468  

Other non-operating expenses(1)

     (187     (19,441
  

 

 

   

 

 

 

Loss for the period before tax from continuing operations

     (36,224     (24,149
  

 

 

   

 

 

 
(1) 

Other non-operating expenses for the nine-month period ended September 30, 2020 include the impairment of investments in associates of 17,101 million yen.

The above items are not allocated to individual segments as these are managed on an overall group basis.

 

–5–


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(3)    Revenues from Major Services

The Group’s revenues from continuing operations from its major services for the nine-month periods ended September 30, 2019 and 2020 are as follows.

Revenues recognized at a point in time mainly consist of revenues from LINE Friends.

For the nine-month periods ended September 30,

 

(In millions of yen)
         2019              2020      

Core business

     

Advertising

     

Display advertising(1)

     34,640        50,936  

Account advertising(2)

     46,261        43,759  

Other advertising(3)

     10,200        5,762  
  

 

 

    

 

 

 

Sub-total

     91,101        100,457  
  

 

 

    

 

 

 

Communication, content, and others

     

Communication(4)

     21,549        22,727  

Content(5)

     28,694        30,679  

Others

     3,537        1,932  
  

 

 

    

 

 

 

Subtotal

     53,780        55,338  
  

 

 

    

 

 

 

Core business total

     144,881        155,795  
  

 

 

    

 

 

 

Strategic business

     

Friends(6)

     14,048        8,000  

Others(7)

     7,773        16,445  
  

 

 

    

 

 

 

Strategic business total

     21,821        24,445  
  

 

 

    

 

 

 

Total

     166,702        180,240  
  

 

 

    

 

 

 

 

(1) 

Revenues from display advertising primarily consisted of fees from advertisement on services such as Timeline, Smart Channel and LINE NEWS.

(2) 

Revenues from account advertising primarily consisted of fees from LINE Official Accounts, Sponsored Stickers and LINE Points.

(3) 

Revenues from other advertising were mainly attributable to advertising revenue from livedoor, NAVER Matome and LINE Part-Time Job.

(4) 

Revenues from communication were mainly attributable to sales of LINE Stickers and Creator Stickers.

(5) 

Revenues from content primarily consisted of sales of LINE GAME’s virtual items.

(6) 

Friends primarily consisted of revenues from sales of character goods.

(7) 

Others primarily consisted of revenues from E-commerce.

 

–6–


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Notes to Going-Concern Assumption

Not applicable.

 

–7–