Announcement Regarding the Issuance of Inaugural Sustainability Bonds

　Rakuten Group, Inc. (hereinafter the “Company”) announces that the Company is going to issue inaugural sustainability bonds (hereinafter the “bonds”). Use of the proceeds will be for investments related to 5G based on the Sustainability Finance Framework formulated on 15^th May 2024.

1. Purpose and background of the bond issuance

　Based on our mission of contributing to society by creating value through innovation and entrepreneurship, we place a high priority on solving social issues and realizing a decarbonized society through investments related to 5G in our mobile segment as well. Specifically, by expanding our 5G coverage area, we are contributing to solving the social issues set forth in the “Digital Infrastructure Development Plan 2030 (formerly: Infrastructure Development Plan for a Digital Garden City Nation)” formulated by the Ministry of Internal Affairs and Communications, such as the acceleration of DX using digital technology, the development of digital infrastructure, and the strengthening of telecommunication infrastructure including ensuring cyber security. Additionally, we aim to reduce energy consumption through flexible virtualization system construction and optimal network control technology using AI. We obtained SBT certification under the Science Based Targets initiative (SBTi), aiming to reduce Scope 1 and 2 emissions by 99.7% and Scope 3 emissions by 30% by 2032, compared to 2022.

　The issuance of the bonds, as our first sustainability bond, is in line with our strategic initiatives to (1) further grow our mobile business based on the above social demands and (2) maintain financial soundness through diversification of funding sources. We believe that this will contribute to building a solid management foundation for the Company. The details of (1) and (2) are as follows.

(1) Further growth of our mobile business

　Rakuten Mobile is making progress in improving its financial performance with the achievement of monthly Non-GAAP EBITDA profitability in December 2024 and quarterly Non-GAAP EBITDA profitability in Q1 FY2025 (see note below), and with the aim of achieving full-year Non-GAAP EBITDA profitability in FY2025, driven by increased revenue from the rising number of contracts and various measures such as ongoing cost reduction efforts. 5G-related investments using the proceeds from the bonds are expected to contribute to the growth of our mobile business with improved communication quality, and at the same time, contribute to society through promoting digital infrastructure development and energy reduction.

(2) Maintaining financial soundness through diversification of funding sources

　The Company has already secured funding for all its bonds maturing in 2025, including the replacement of hybrid bonds, and has a variety of funding options for interest-bearing debt maturing in 2026 and beyond. We will continue to manage bond maturities and aim to reduce interest-bearing debt, striving to maintain financial soundness under a disciplined financial policy. In addition, as mentioned above, with the improvement in the profitability of our mobile business and the reduction of refinancing risks in our financial position, the issuance of our inaugural sustainability bonds further promotes the diversification of our funding sources and contributes to the stability of our financial base.

(Note) Excluding property taxes

2. Overview of the bonds

*A party that supports the issuance of sustainability bonds through advising the formulation of a framework and obtaining external reviews such as second opinions.

3. Related Information

　・May 15, 2024 “Announcement Regarding the Formulation of Sustainability Finance Framework”

　　https://global.rakuten.com/corp/news/press/2024/0515_11.html

　・November 1, 2024 “Rakuten Receives SBTi Certification for Emission Reduction Targets

　  - Driving greenhouse gas reductions in line with power sector standards in the energy industry”

　　https://global.rakuten.com/corp/news/press/2024/1101_02.html

　This notice is an announcement regarding the issuance of the bonds and was not created for the purpose of solicitating investment, the purchase thereof, or similar acts in any jurisdiction.

End