NAVER : Integrated Report

NEW UNIVERSEYOU DESERVE

NAVER INTEGRATED REPORT 2021

As for some performance, if the results need to be tracked continuously, we have used data for the past three or more years. Important changes in management at the time of the reporting were indicated separately for reader reference.

ABOUT THIS REPORT

OUTLINE

This is NAVER's "Integrated Report" and is published to share our financial and non-financial performance with our investors and other stakeholders, with final approval being given by the Board of Directors of NAVER in March 2022.

REPORTING PERIOD

The reporting period of this report is as follows:

• • Financial performance covers the company's performance by December 31, 2021.

• • Business performance covers the company's activities by March 31, 2022.

• • Management performance covers matters for which decisions were made by March 31, 2022.

Green Impact Team, NAVER Corporation

REPORTING SCOPE

The reporting scope of this report is as follows:

• • Reporting on financial and business performance includes headquarters and all business sites in South Korea and overseas.

• • Non-financial performance is based on the separate outcomes of NAVER Corporation, and the scope of environmental performance includes "Green Factory", NAVER's company building; "1784", a second company building with a plan to open soon; the company's Internet data center "GAK Chuncheon"; "Connect One", a training institute for NAVER employees; "NAVER Square", a space for win-win growth with partners; and leased business sites.

REPORTING STANDARDS

This report's reporting standards are as follows:

• • ESG information complies with Global Reporting Initiative (GRI) Standards 2021.

• • Financial information is based on the consolidated financial statements in accordance with the Korean International Financial Reporting Standards (K-IFRS).

• • The integrated description method of financial and non-financial performance complies with the principles and content of the Integrated Reporting Framework presented by the Value Reporting Foundation.

THIRD PARTY ASSURANCE

This report has been assured by DNV, an independent assurance corporation, to ensure the credibility of all the information created, and the verification was completed in accordance with AA1000AS, an international verification standard.

INQUIRIES

For inquiries about this report, please contact us using the following contact information:

• Tel	[phone]
• Fax	[phone]
• E-mail	[e-mail]

From our start as a venture firm in 1999, NAVER has grown into a global ICT company connecting millions of people all over the world. Tested and vetted through the incessant changes of the times, our beliefs have remained unchanged.

As a technology platform, NAVER pursues change and innovation firmly believing that anyone can use the technology of tomorrow to their full benefit today. We are preparing the future to come so that all people standing with NAVER can go beyond convention limits and create a new world.

This report is NAVER's first Integrated Report, and is a record of sustainable growth and a channel for communication with stakeholders. NAVER Integrated Report 2021 can be downloaded from NAVER's website in PDF format.

CONTENTS

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Letter to Stakeholders

01.

02. 03.

04.

CORPORATE PROFILE

• 10 Our Business Model

• 12 Our Company

• 18 Our Business

CORPORATE GOVERNANCE

• 32 Governance

• 44 Risk & Opportunity

ESG COMMITMENT

• 54 ESG Framework

• 63 Privacy & Human Rights

• 84 Environmental Value Creation

• 93 Social Value Creation

APPENDIX

• 123 Financial Performance Indices

• 132 Subsidiaries

• 133 ESG Performance Indices

• 139 GRI Index

• 142 Awards & Accolades

• 143 Third Party's Assurance Statement

• 145 GHG Verification Statement

• 146 UN SDGs

Letter to Stakeholders

By infusing the global sense and expertise of the new generation into the DNA of innovation and challenge we have inherited from NAVER's former management, NAVER will evolve into a new Internet company that is globally recognized, achieving ESG-focused sustainable growth.

Greetings,

I am Choi Soo-yeon, the new CEO of NAVER Corporation

Since its beginning in 1999 as a domestic search portal, NAVER has been growing into a global ICT company, building up technology leadership in e-commerce, fintech, content, cloud, artificial intelligence (AI), robotics and other areas, as well as a business portfolio as diverse.

NAVER's former management, mostly of the founding generation of the Internet, has built the foundation that had made possible our global expansion, including a diversified business portfolio, global partnerships, and technology leadership. Now, the succeeding generations, including myself, are about to start a new beginning, with a sense of mission to unveil a model of a new Internet business worthy of world recognitions by infusing the global perspective and expertise of the new generations into the DNA of innovation and challenge we have inherited.

All businesses of NAVER have been launched as global services at the beginning with the goals set on the global landscape as well. In executing and supporting NAVER's overseas expansions and investments, I have felt and seen a keen interest and ardent responses from global industries and business partners.

Taking this circumstance into account, we will establish systems designed to accelerate the global business growth of each of NAVER's operations. I will also focus my management capabilities on becoming a business incubator, experimenting with various types of convergence among different operations and thus continually nurturing new businesses into global brands that surpass LINE, Webtoon, and Zepeto.

In 2021, NAVER made noteworthy achievements in many business aspects. Financial performances continued to grow strongly across all business areas, including contents and fintech. Operating revenue grew 28.5% year-on-year to a record-high KRW 6,817.6 billion. Total shareholder return grew over the year on the strength of free cash flow (FCF) growth, raising paid dividends to around KRW 76.3 billion. To further strengthen the synergy with outstanding partners in the ecommerce ecosystem, we exchanged with Shinsegae and E-Mart treasury shares worth KRW 250 billion, swapped with Cafe24 KRW 130 billion worth of shares, and invested in promising partners at home and abroad, including BRANDI and Wallapop. Number of users continued to grow as well.

Daily active users (DAUs) of NAVER app exceeded 34 million, monthly active users (MAUs) of Webtoon and Wattpad numbered about 170 million, and Zepeto subscribers broke the 300 million mark in March, 2022. We also continued to solidify our leadership in technology innovation, presenting 66 research papers at world-renown AI conferences and introducing ARCVERSE, a metaverse-based ecosystem.

Armed with these business and technological capabilities, NAVER is developing into a top-tier global Internet company. As another key axis to this end, we are pursuing long-term growth of corporate value based on ESG performances. In 2021, we established a human rights management system, and took steps to build an organizational culture, work environment, and leadership systems worthy of NAVER's brand and stature. Last year's adoption of 10 Human Rights Guidelines, assessments of a corporate health and human rights impact, and clarification of human rights management roles and responsibilities (R&R) will, I believe, serve as the basis for outstanding employees working with a sense of pride in a highly-rewarding work environment. Also, we will further improve fair trade compliance programs (CP) and make diverse efforts to promote compliance culture and to ultimately have the CPs evolve into NAVER's code of conduct. In line with this will, we joined the UN Global Compact (UNGC) in 2021, supporting the Ten Principles of the UNGC in the areas of Human Rights, Labour, Environment and Anti-Corruption.

Regarding the environmental aspect, we established a full-fledged execution framework for implementing the 2040 Carbon Negative drive we had declared in 2020. Based on the level of demands from internal and external stakeholders and an action plan of which NAVER is capable, we established a mid-term goal of reducing Scope 1 and 2 emissions by 60% until 2030. To this end, we are taking measured steps by building eco-friendly data centers and business facilities, securing renewable energy supply contracts, and switching our fleets to electric vehicles. In addition, we are advancing the analysis of financial impacts that climate crises may have on NAVER and thus reflecting findings in the daily operation of our businesses. As for corporate governance, we are leveraging our BOD-centered management and transparent communications with stakeholder, NAVER's strengths, in a bid to keep expanding the management of ESG risks and opportunities. At NAVER, ESG management is a process of keeping promises we make for stakeholders and is viewed as an essential activity of building long-term trust and improving corporate value.

NAVER's management, including myself, will continue to make efforts to grow the company and corporate culture stronger and more sustainable than ever before, not to mention business expansions. By doing so, we will share the values created by NAVER with diverse stakeholders, including employees enabling NAVER's competitiveness, users who are enjoying NAVER services and sharing their value, business partners joining us in the process of growth, and shareholders sharing the outcomes of growth.

I ask all of you for warm support for and keen interest in NAVER's new beginning.

President & CEO, NAVER Corporation

LETTER TO STAKEHOLDERS

007

Choi Soo-yeon

NAVER always embraces the challenge of creating a new future. Changing the technology of tomorrow into tools of today, helping SMEs and creators grow and develop to their full potential, keeping the environment clean and healthy for future generations, we seek to build a sustainable world, together with stakeholders. For a sustainable future completing with technology and ESG, and where people can share happiness more than ever before, we are nurturing sustainable values with next-generation connectivity.