Hakuhodo Dy Holdings Incorporated · TSE:2433

Hakuhodo Dy — FY2024 Earnings Presentation

51 slides from Hakuhodo Dy's earnings presentation, May 13, 2025

1. Slide 1: Consolidated Financial Highlights FY2024 (April–March 2025)

   Consolidated Financial Highlights FY2024 (April–March 2025) May 13, 2025 Ⓒ HAKUHODO DY Holdings Inc, All Rights Reserved. | CONFIDENTIAL

2. Slide 2: Highlights of FY2024 Consolidated Results

   Highlights of FY2024 Consolidated Results Ⓒ HAKUHODO DY Holdings Inc, All Rights Reserved. | CONFIDENTIAL

3. Slide 3: FY2024 Consolidated Results

   FY2024 Consolidated Results • Full-year billings, revenue, operating income, and ordinary income exceeded the previous year's results. • Particularly, operating income and ordinary income saw nearly double-digit growth compared to the previous year, driven by the effects of cost control. • On the ot

4. Slide 4: FY2024 Consolidated Results (After Adjustments) 1

   FY2024 Consolidated Results (After Adjustments) 1 • Billings increased by 2.3 percentage points YoY. Gross profit increased by 2.1 percentage points YoY. Gross margin was 24.6%, the same level as the previous year. • SG&A expenses increased by 0.6 percentage points YoY. Operating income increased by

5. Slide 5: FY2024 Consolidated Results (After Adjustments) 2

   FY2024 Consolidated Results (After Adjustments) 2 ⚫ The operating income before amortization of G/W for FY2024 increased by ¥6.0 billion YoY. • Japan/Corporate: - Television was below the previous year's results in Q4 (January to March) due to temporary factors, but was nearly in line with the previ

6. Slide 6: FY2024 Consolidated Results (After Adjustments) 3

   FY2024 Consolidated Results (After Adjustments) 3 ⚫ Extraordinary income/losses for the full year: ¥6.1 billion in extraordinary income was recognized, but ¥17.4 billion in extraordinary losses were recorded due to restructuring costs in North America. • Extraordinary Income ✓ During FY2024, we cont

7. Slide 7: Guidance for FY2025

   Guidance for FY2025 © Hakuhodo DY Holdings Inc. All rights reserved.

8. Slide 8: Guidance for FY2025

   Guidance for FY2025 ⚫ The guidance for the full fiscal year ending March 2026 is as follows. • The current forecast does not incorporate significant extraordinary incomes or losses. Guidance for FY2025 （Millions of JPY） Forecast YoY Billings 1,650,000 +2.3% Revenue 970,000 +1.8% Operating Income 40,

9. Slide 9: Action to Implement Management that is Conscious of Cost of Capital and Stock Price

   Action to Implement Management that is Conscious of Cost of Capital and Stock Price © Hakuhodo DY Holdings Inc. All rights reserved.

10. Slide 10: Analysis of Current Situation (Cost of Capital / Capital Profitability)

    Analysis of Current Situation (Cost of Capital / Capital Profitability) • Our cost of equity capital is recognized as approximately 6–8% based on estimates using the CAPM. • Over the past five years, the ROE before amortization of G/W has generally exceeded the cost of equity capital. However, the R

11. Slide 11: Future Initiatives

    Future Initiatives 1 • Direction and specific initiatives for improving capital efficiency ✓ KPI for capital profitability in the current Medium-Term Business Plan (FY2024 to FY2026) : ROE before amortization of G/W = at least 10% ➢ Aiming for a level exceeding our cost of equity capital (approximat

12. Slide 12: Future Initiatives (Capital Allocation for Improving Capital Efficiency)

    Future Initiatives 2 (Capital Allocation for Improving Capital Efficiency) • Cash outflow ✓ Growth investments: Capital expenditures for strengthening marketing infrastructure (including AI) , M&A, etc., for enhancing capabilities and creating growth options. ✓ Shareholder returns: While prioritizin

13. Slide 13: Shareholder Returns for FY2025

    Shareholder Returns for FY2025 © Hakuhodo DY Holdings Inc. All rights reserved.

14. Slide 14: Shareholder Returns

    Shareholder Returns ⚫ Dividend forecast • The dividend forecast for FY2024 (ending March 2025) will be ¥32 per share annually, including the interim dividend already paid. • The dividend forecast for FY2025 (ending March 2026) will be ¥32 per share annually. ⚫ Regarding the acquisition of own shares

15. Slide 15: Appendix

    Appendix © Hakuhodo DY Holdings Inc. All rights reserved.

16. Slide 16: Income Statements

    Income Statements Japanese GAAP-based Income Statements for FY2024 YTD（12-Month） by Quarter（3-Month） （Millions of JPY） Actual YOY Q1 YOY Q2 YOY Q3 YOY Q4 YOY Billings 1,613,101 +33,751 +2.1% 352,513 -0.5% 382,880 +11.5% 413,949 -1.4% 463,758 +0.5% Revenue 953,316 +6,540 +0.7% 200,361 -0.5% 227,492 +

17. Slide 17: Results After Adjustments

    Results After Adjustments YTD（12-Month） by Quarter（3-Month） FY2024 Results After Adjustments （Millions of JPY） Actual YOY Q1 YOY Q2 YOY Q3 YOY Q4 YOY Billings 1,609,835 36,627 +2.3% 349,246 +0.2% 382,880 +11.6% 413,949 -1.4% 463,758 +0.5% Revenue 950,049 9,415 +1.0% 197,095 +0.7% 227,492 +15.0% 231,

18. Slide 18: Results by Region

    Results by Region FY2024 （Millions of JPY） Actual YOY Japan Billings 1,379,896 +40,397 +3.0% Revenue 720,111 +11,974 +1.7% Gross Profit 297,097 +6,035 +2.1% SG&A Expenses 215,143 -3,772 -1.7% Operating Income 81,953 +9,807 +13.6% Overseas Billings 242,705 -7,284 -2.9% Revenue 242,705 -7,284 -2.9% Gr

19. Slide 19: Results by Region (YTD, by Quarter)

    Results by Region (YTD, by Quarter) YTD（12-Month） by Quarter（3-Month） FY2024 Japan (After Adjustments) （Millions of JPY） YTD Actual YOY Q1 YOY Q2 YOY Q3 YOY Q4 YOY Billings 1,376,630 +43,272 +3.2% 297,997 +0.7% 323,963 +13.2% 358,276 -0.7% 396,393 +1.6% Gross Profit 293,840 +8,888 +3.1% 61,256 +1.4%

20. Slide 20: Results by Region (Japan: After Adjustments)

    Results by Region (Japan: After Adjustments) FY2024 (Millions of JPY) Actual YOY Gross Profit & Operating Income before Amortization of Goodwill by Quarter Billings 1,376,630 +43,272 +3.2% (Millions of JPY) Revenue 716,845 +14,850 +2.1% Gross Profit 293,840 +8,888 +3.1% Gross Margin 21.3% -0.0pt SG&

21. Slide 21: Results by Region (Overseas)

    Results by Region (Overseas) FY2024 (Millions of JPY) Actual YOY Gross Profit & Operating Income before Billings 242,705 -7,284 -2.9% Amortization of Goodwill by Quarter (Millions of JPY) Revenue 242,705 -7,284 -2.9% Gross Profit 107,899 -264 -0.2% Gross Margin 44.5% +1.2pt SG&A Expenses 115,439 -1,

22. Slide 22: Japan: Billings by Type of Service

    Japan: Billings by Type of Service FY2024 (Millions of JPY) Actual YOY Composition Newspaper 26,911 -5,224 -16.3% 2.0% Magazine 6,603 -789 -10.7% 0.5% Radio 9,504 -401 -4.1% 0.7% Television 384,129 -817 -0.2% 28.2% Traditional Media Service Subtotal 427,148 -7,232 -1.7% 31.4% Internet Media 373,169

23. Slide 23: Billings by Type of Service (YTD, by Quarter)

    Billings by Type of Service (YTD, by Quarter) FY2024 YTD（12-Month） by Quarter（3-Month） （Millions of JPY） YTD Actual YOY Q1 YOY Q2 YOY Q3 YOY Q4 YOY Newspaper 26,911 -5,224 -16.3% 5,536 -22.4% 6,076 -12.2% 7,485 -11.4% 7,812 -19.0% Magazine 6,603 -789 -10.7% 1,318 -22.0% 1,662 -11.4% 2,119 +0.3% 1,50

24. Slide 24: Japan: Billings by Client Industry

    Japan: Billings by Client Industry FY2024 （Millions of JPY） Actual YOY Composition Information/Communications 144,450 +16,338 +12.8% 12.4% Beverages/Cigarettes/Luxury foods 112,025 -4,150 -3.6% 9.6% Automobiles/Related products 100,447 -8,534 -7.8% 8.6% Foodstuffs 85,994 +5,532 +6.9% 7.4% Restaurant

25. Slide 25: Japan: Billings by Client Industry

    Japan: Billings by Client Industry ⚫ Positive Industries Government/Organizations FY2024 Actual ¥ 80.7 B YoY +¥32.9 B (+68.8%) Information/Communications ¥ 144.4 B YoY +¥16.3 B (+12.8%) ⚫ Negative Industries Automobiles/Related products FY2024 Actual ¥ 100.4 B YoY -¥ 8.5 B (- 7.8％) Household product

26. Slide 26: Japan: Billings by Client Industry (by Quarter)

    Japan: Billings by Client Industry (by Quarter) 1 (Millions of JPY) Ⓒ HAKUHODO DY Holdings Inc, All Rights Reserved. 26

27. Slide 27: Japan: Billings by Client Industry (by Quarter)

    Japan: Billings by Client Industry (by Quarter) 2 (Millions of JPY) Ⓒ HAKUHODO DY Holdings Inc, All Rights Reserved. 27

28. Slide 28: Japan: Billings by Client Industry (by Quarter)

    Japan: Billings by Client Industry (by Quarter) 3 (Millions of JPY) Ⓒ HAKUHODO DY Holdings Inc, All Rights Reserved. 28

29. Slide 29: Japan: Billings by Client Industry (by Quarter)

    Japan: Billings by Client Industry (by Quarter) 4 FY2023 FY2024 (Millions of JPY) Ⓒ HAKUHODO DY Holdings Inc, All Rights Reserved. 29

30. Slide 30: Selling, General & Administrative Expenses

    Selling, General & Administrative Expenses FY2024 （Millions of JPY） Actual YOY Major Change Factors in SG&A Expenses (Millions of JPY) Personnel 240,363 +1,856 +0.8% FY2023 SG&A Expenses 359,886 Rent 20,316 -451 -2.2% Change in scope of consolidation +532 Depreciations 10,810 +715 +7.1% Amortization

31. Slide 31: Other Income/Loss & Extraordinary Items

    Other Income/Loss & Extraordinary Items FY2024 Other Income/Loss （Millions of JPY） Actual YOY Non-operating Income 9,774 +510 Interest Income 770 +283 Dividend Income 2,213 -63 Foreign Exchange Gains - -1,358 Investment Partership Income 1,040 +1,040 Non-operating Expenses 4,695 -1,041 Interest Expe

32. Slide 32: Balance Sheet

    Balance Sheet （Millions of JPY） As of March 31, 2025 Change * Composition Current Assets 713,273 22,885 67.9% Cash & Deposits 211,504 26,977 Notes and Accounts Receivable 413,350 11,191 Non-current Assets 336,918 -7,707 32.1% Tangible Assets 57,791 -3,176 Intangible Assets 99,610 -4,872 Goodwill 57,

33. Slide 33: Cash Flow Statements

    Cash Flow Statements FY2024 （Millions of JPY） Actual YOY Cash Flows from Operating Activities 82,446 +72,563 Cash Flows from Investing Activities -13,529 -19,858 Purchase of Property, Plant and Equipment -3,879 +2,859 Purchase of Intangible Assets -12,761 -2,533 Purchase of Investment Securities -3,

34. Slide 34: Cautionary Statements Concerning Forward-looking Statements, Change in Accounting Standards & Note Concerning Audits

    Cautionary Statements Concerning Forward-looking Statements, Change in Accounting Standards & Note Concerning Audits Cautionary Statements Concerning Forward-looking Statements This presentation includes forward-looking statements concerning forecasts of operating results, business plans and policie

35. Slide 35: Medium-Term Business Plan

    Medium-Term Business Plan © Hakuhodo DY Holdings Inc. All rights reserved.

36. Slide 36: Medium-Term Business Plan (FY2024–FY2026)

    Medium-Term Business Plan (FY2024–FY2026) ⚫ Our goal: creativity platform ✓ With sei-katsu-sha-centered creativity as our edge, the Hakuhodo DY Group aims to be a group that creates the future by Medium-term connecting sei-katsu-sha, organizations and society to generate new relationship value. stra

37. Slide 37: Medium-Term Business Plan progress: FY2024 full-year

    Medium-Term Business Plan progress: FY2024 full-year FY2023 FY2026 FY2031 Thus far: Medium-Term Business Plan period: 3 years Focused on marketing business (advertising in Future outlook particular) Enhance profitability and create growth options Medium-term targets (for FY2026) Full-year results fo

38. Slide 38: 3-year reform of business structure to enhance profitability and create growth options

    (Re-post) 3-year reform of business structure to enhance profitability and create growth options Consulting business Technology business Content business Incubation business Marketing business 1 2 Integrated marketing Digital marketing Commerce business Restructuring of Creation of new marketing bus

39. Slide 39: 1. Restructuring of marketing business: Progress

    1. Restructuring of marketing business: Progress ⚫ Domestic marketing business maintained positive growth. ⚫ The operating margin before amortization of goodwill exceed the target level for FY2026. ⚫ Gross profit in the domestic digital marketing domain achieved growth above the market average, star

40. Slide 40: 1. Restructuring of marketing business: Re-formation

    1. Restructuring of marketing business: Re-formation ⚫ We enhanced common Group infrastructure in the domestic marketing business. ⚫ In its initial year of integration, Hakuhodo DY ONE saw substantial growth in both gross profit and operating income before amortization of goodwill. – Contributing to

41. Slide 41: 1. Restructuring of marketing business: AI- and tech-driven sophistication

    1. Restructuring of marketing business: AI- and tech-driven sophistication ⚫ We are advancing the development of an integrated marketing platform to scale creativity around the core of a Sei-katsu-sha Data Platform that integrates our unique media/sei-katsu-sha data and knowledge with external data.

42. Slide 42: 1. Restructuring of marketing business: AI- and tech-driven efficiency

    1. Restructuring of marketing business: AI- and tech-driven efficiency ⚫ We have improved efficiency by leveraging AI and tech. – We are implementing labor-saving efforts with a view to the future reallocation of human resources to growth domains. Standardization of the marketing strategy planning p

43. Slide 43: 2. Creation of new growth options: Progress

    2. Creation of new growth options: Progress ⚫ Total gross profit in the four domestic business domains grew by over +18% on the previous year, on course to achieve the target. – Consulting business, led by Hakuhodo Consulting and ENND PARTNERS, more than doubled YoY. – Technology business saw positi

44. Slide 44: 2. Creation of new growth options: Full-scale entry into IT consulting

    2. Creation of new growth options: Full-scale entry into IT consulting ⚫ We launched companies co-parented with NTT Data and iRidge separately, to drive growth in the technology business (under the oversight of Hakuhodo). ⚫ Intended to enhance the systems and app development structure for the commer

45. Slide 45: 3. Remodeling of global business: Progress

    3. Remodeling of global business: Progress ⚫ Gross profit remained at the same level as the previous year. ⚫ Operating margin before goodwill amortization has steadily improved. Monitoring indicators (for FY2026) Full-year result for FY2024*1 CAGR of gross profit in global business*2 At least +5% -0

46. Slide 46: 3. Remodeling of global business: Growth by region

    3. Remodeling of global business: Growth by region ⚫ By capturing demand centered around digital and activation, ASEAN experienced a strong double-digit growth. ⚫ Both North America and China saw declines compared to the previous year due to reduced client spending driven by macroeconomic uncertaint

47. Slide 47: 3. Remodeling of global business: Progress in kyu reform

    3. Remodeling of global business: Progress in kyu reform ⚫ Restructuring in 2024 led to substantially improved performance in Jan–Mar 2025. ⚫ kyu Pulse was formed to increase competitiveness by offering seamless solutions in the marketing business. ⚫ We proactively invested in technology to increase

48. Slide 48: Operating income after adjustments and before amortization of goodwill

    Operating income after adjustments and before amortization of goodwill ⚫ The operating profit after adjustments* and before goodwill amortization, which reflects the core earning power of the business, more than doubled from FY2004 to FY2024. ⚫ We aim to return to a growth trajectory during the curr

49. Slide 49: Sustainability: Progress in human rights due diligence

    Sustainability: Progress in human rights due diligence ⚫ After establishing a human rights policy in 2022, we performed human rights due diligence in collaboration with operating companies. ⚫ The Board of Directors has been informed of the training and assessment implemented at the company level (PD

50. Slide 50: Medium-term Business Plan: Summary of full-year progress in FY2024

    Medium-term Business Plan: Summary of full-year progress in FY2024 Medium-term target Full-year result (for FY2026) for FY2024 Notes CAGR of operating income after adjustments*1 and before amortization of goodwill At least +10% +13.7% CAGR of gross profit after adjustments*1 At least +5% +2.1% Mediu

51. Slide 51: Ⓒ HAKUHODO DY Holdings Inc, All Rights Reserved. | CONFIDENTIAL

    Ⓒ HAKUHODO DY Holdings Inc, All Rights Reserved. | CONFIDENTIAL

Hakuhodo DY Holdings — FY2024 Earnings Presentation on 6ix