Broadmedia Corporation · TSE:4347

Broadmedia — Q3 FY2023 Earnings Presentation

52 slides from Broadmedia's earnings presentation, Feb 7, 2024

1. Slide 1: Summary of Financial Results for the First Three Quarters of FY Ending March 2024

   Summary of Financial Results for the First Three Quarters of the Fiscal Year Ending March 31, 2024 Broadmedia Corporation February 7, 2024 The statements contained here indicate the Company’s current plans, expectations, strategies, and beliefs. Any statements that are not historical facts are forwa

2. Slide 2: Agenda

   Financial Summary for the First Three Quarters of FY2023 Revision of Financial Forecasts div Inc. and divx Inc. as new Subsidiaries Shareholder Return [Reference Documents] ・ Sustainability (Human Capital) Initiatives ・ Other Topics © 2024 Broadmedia Corporation. All Rights Reserved. 2

3. Slide 3: Consolidated Financial Results for the First Three Quarters

   Consolidated Financial Results for the First Three Quarters (April – December) (Unit：Million yen)(Amounts are rounded down to the nearest million yen) Financial FY2022 FY2023 Rate of Forecasts Achievement Difference difference ratio Q3 Q3 （announced on May 9） Revenue 9,653 10,320 666 +7% 14,300 72%

4. Slide 4: Changes in Operating Income (Year-over-Year)

   Changes in Operating Income (Year-over-Year) Q1 Q2 Q3 Q4 Actual results in FY2022 1,200 （previous Cumulative totals in FY2022 forecast） Actual results in FY2023 1,036 844 ８４４ Totals in FY2023 (forecast) 774 ７７４ 552 465 360 308 ３０８ 292 ２９２ 289 261 176 192 (Unit：Million yen)(Amounts are rounded down t

5. Slide 5: Operating Income for the Third Quarter of the Fiscal Year

   Operating Income for the third quarter of the fiscal year (Year-over-Year) 600 FY20２２_Q3 FY20２３_Q3 3０８ 0 ２９２ 500 55 20 24 45 51 400 138 Technology 143 300 200 Education 291 286 100 0 -69 -45 -100 -153 -189 -200 (Unit：Million yen)(Amounts are rounded down to the nearest million yen) -300 Education Te

6. Slide 6: Consolidated Financial Results for the First Three Quarters by Segment

   Consolidated Financial Results for the First Three Quarters (April – December) (Unit：Million yen)(Amounts are rounded down to the nearest million yen) Revenue Operating income FY2022 FY2023 Difference FY2022 FY2023 Difference Q3 Q3 Q3 Q3 Education 2,524 3,185 661 789 985 196 Media Content 571 475 (9

7. Slide 7: Consolidated Financial Results by Business Segment: Education

   Consolidated Financial Results by Business Segment (Unit：Million yen)(Amounts are rounded down to the nearest million yen) Revenue Operating income FY2022 FY2023 FY2022 FY2023 Difference Difference Q3 Q3 Q3 Q3 Education 2,524 3,185 661 789 985 196 ＋26％ ＋25％  The number of new students reached a rec

8. Slide 8: Consolidated Financial Results by Business Segment: Media Content

   Consolidated Financial Results by Business Segment (Unit：Million yen)(Amounts are rounded down to the nearest million yen) Revenue Operating income FY2022 FY2023 FY2022 FY2023 Difference Difference Q3 Q3 Q3 Q3 Media Content 571 475 (95) (205) (134) 71 (17％) loss reduced  In digital media services,

9. Slide 9: Consolidated Financial Results by Business Segment: Studio & Production

   Consolidated Financial Results by Business Segment (Unit：Million yen)(Amounts are rounded down to the nearest million yen) Revenue Operating income FY2022 FY2023 FY2022 FY2023 Difference Difference Q3 Q3 Q3 Q3 Studio ＆ Production 1,446 1,359 (87) 131 72 (58) (6％) (45％)  In Q1 there was a negative i

10. Slide 10: Consolidated Financial Results by Business Segment: Broadcast

    Consolidated Financial Results by Business Segment (Unit：Million yen)(Amounts are rounded down to the nearest million yen) Revenue Operating income FY2022 FY2023 FY2022 FY2023 Difference Difference Q3 Q3 Q3 Q3 Broadcast 1,878 1,770 (107) 161 73 (87) (6％) (54％)  Sponsorship revenues are also declini

11. Slide 11: Consolidated Financial Results by Business Segment: Technology

    Consolidated Financial Results by Business Segment (Unit：Million yen)(Amounts are rounded down to the nearest million yen) Revenue Operating income FY2022 FY2023 FY2022 FY2023 Difference Difference Q3 Q3 Q3 Q3 Technology 3,090 3,306 215 365 386 20 +7％ +6％  The mainstay CDN (Akamai) services are dri

12. Slide 12: Consolidated Financial Results by Business Segment: Others

    Consolidated Financial Results by Business Segment (Unit：Million yen)(Amounts are rounded down to the nearest million yen) Revenue Operating income FY2022 FY2023 FY2022 FY2023 Difference Difference Q3 Q3 Q3 Q3 Others 141 222 81 (17) (6) 10 loss +57％ reduced  The business of professional eSports pro

13. Slide 13: Consolidated Financial Results by Business Segment: Corporate Expenses

    Consolidated Financial Results by Business Segment (Unit：Million yen)(Amounts are rounded down to the nearest million yen) Operating income FY2022 FY2023 Difference Q3 Q3 Corporate expenses (449) (532) (83) １９％ cost increased  There were increases mainly in personnel expenses due to the enhancement

14. Slide 14: Consolidated Financial Position

    Consolidated Financial Position Condition of assets, liabilities, and net assets (Unit：Million yen)(Amounts are rounded down to the nearest million yen) FY2023 Rate of FY2022 Difference difference Q3 Total assets 9,948 10,022 73 ＋1% Liabilities 4,498 4,143 (354) (8%) Net assets 5,450 5,878 428 ＋8% S

15. Slide 15: Consolidated Financial Position: Cash Flow

    Consolidated Financial Position Condition of Cash flow FY2022 FY2023 Q3 Q3 Operating cash flow (133) 124 Investing cash flow (239) (989) Financing cash flow (345) (364) Effect of exchange rate change on cash and cash equivalents 11 10 Changes in cash and cash equivalents (706) (1,219) Year-end balan

16. Slide 16: Revision of Financial Forecasts

    Financial Summary for the First Three Quarters of FY2023 Revision of Financial Forecasts div Inc. and divx Inc. as new Subsidiaries Shareholder Return [Reference Documents] ・ Sustainability (Human Capital) Initiatives ・ Other Topics © 2024 Broadmedia Corporation. All Rights Reserved. 16

17. Slide 17: Condition of Existing Businesses (Compared with Initial Forecasts)

    Condition of existing businesses (compared with initial forecasts) (Unit：Million yen)(Amounts are rounded down to the nearest million yen) Previous Full-year forecasts for （ref.） Forecasts the existing Difference Rate of FY2022 difference （announced on business Actual results May 9, 2023） segments R

18. Slide 18: Changes in the Consolidated Financial Results of div Inc.

    Changes in the consolidated financial results of div Inc. (before conversion into a subsidiary) (Unit：Million yen)(Amounts are rounded down to the nearest million yen) FY 2023 FY 2020 FY 2021 FY 2022 ended Dec. ended Dec. ended Dec. ended Dec. （forecast） Revenue 4,381 2,924 1,740 1,801 Operating inc

19. Slide 19: Profit Image of div and divx

    Profit image of div and divx profit （Education） Previous Future （Technology） ０ time  It is expected that it will take some time to recover the investments made by div Inc. (Education).  In comparison, the recovery of divx Inc. (Technology) to profitability is expected to occur quickly. © 2024 Broa

20. Slide 20: Revision of Financial Forecasts

    Revision of Financial Forecasts (Unit：Million yen)(Amounts are rounded down to the nearest million yen) Previous Impact of Revised （ref.） Forecasts Impact of div Forecasts Rate of FY2022 existing and divx difference Actual （announced on businesses （announced on results May 9, 2023） Feb. 7, 2024） Rev

21. Slide 21: Changes in Operating Income (Year-over-Year)

    Changes in Operating Income (Year-over-Year) Q1 Q2 Q3 Q4 Actual results in FY2022 1,200 （previous Cumulative totals in FY2022 forecast） Actual results in FY2023 1,036 844 Totals in FY2023 (forecast) 850 （revised forecast） 774 552 465 Impact of div and divx 289 360 308 292 192 261 176 6 (Unit：Million

22. Slide 22: div Inc. and divx Inc. as New Subsidiaries

    Financial Summary for the First Three Quarters of FY2023 Revision of Financial Forecasts div Inc. and divx Inc. as new Subsidiaries Shareholder Return [Reference Documents] ・ Sustainability (Human Capital) Initiatives ・ Other Topics © 2024 Broadmedia Corporation. All Rights Reserved. 22

23. Slide 23: div Inc. and divx Inc. as New Subsidiaries

    div Inc. and divx Inc. as new Subsidiaries • The Group will actively promote its original combined educational business as a medium- to long-term initiative. • Even though they are not profitable at this time, div Inc. and divx Inc. are included in the company’s initiatives as a significant element

24. Slide 24: Further Enhancement of the Original Combined Education Business

    Further enhancement of the original combined education business Wide-area online school business, the only school business expanding １ despite the declining birth rate ２ eSports education business, a business whose market is expected to expand. Japanese language education business, a business for de

25. Slide 25: Further Enhancement of the Original Combined Education Business

    Further enhancement of the original combined education business Wide-area online school business, the only school business expanding １ despite the declining birth rate ２ eSports education business, a business whose market is expected to expand. Japanese language education business, a business for de

26. Slide 26: Further Enhancement of the Original Combined Education Business

    Further enhancement of the original combined education business １ Wide-area online school business & ４ Programming education business ⇒ High school education and programming ２ eSports education business & ４ Programming education business ⇒ Enhancement of the eSports course ３ Japanese language educat

27. Slide 27: Future Initiatives

    Rebuilding the existing businesses of div Inc. Previous situation  The company had been expanding its business until 2020, taking advantage of the demand for re-skilling and the popularity of programing education while also actively investing (in human resources, facilities and locations) to facili

28. Slide 28: Profit Image of div

    Profit image of div profit （Education） Previous Future ０ time  It is expected that it will take some time to recover the investments made by div Inc. (Education). © 2024 Broadmedia Corporation. All Rights Reserved. 28

29. Slide 29: Outlook for Education

    Outlook for Education Conceptual image of the growth of Education after converting div into a subsidiary. (Unit：Million yen） Revenue 12,000 10,000 8,000 6,000 4,000 3,444 2,784 2,297 1,969 2,000 0 FY2019 FY2020 FY2021 FY2022 FY2023 2027 (forecast) 年度 It is expected that the growth of Education will

30. Slide 30: Profit Image of divx

    Profit image of divx profit Previous Future （Technology） ０ time  In comparison, the recovery of divx Inc. (Technology) to profitability is expected to occur quickly. © 2024 Broadmedia Corporation. All Rights Reserved. 30

31. Slide 31: Expansion of the Scope of the Technology Business

    Expansion of the scope of the Technology business The scope of business has expanded quickly due to the inclusion of divx. Education Technology Introduce Trained Professionals training employment IT Professionals  Over 100 engineers have been secured.  The expansion of business will be facilitated

32. Slide 32: Outlook for Technology

    Outlook for Technology Conceptual image of the growth of Technology after the conversion of div into a subsidiary. (Unit：Million yen） Revenue 12,000 10,000 8,000 6,000 4,213 3,694 4,000 3,313 3,149 2,000 0 FY2019 FY2020 FY2021 FY2022 FY2023 2027 (forecast) 年度 Contribution to the stable growth of Te

33. Slide 33: Expectations Regarding the Creation of Group Synergy

    Expectations regarding the creation of group synergy • div Inc. and divx Inc. will belong to the education service and technology service respectively. • Collaboration with programming education, DX education and AI-aided learning in the Education service. • Significant enhancement of the engineerin

34. Slide 34: div Inc. and divx Inc. as New Subsidiaries (Summary)

    div Inc. and divx Inc. as new Subsidiaries (summary) • The Group will actively promote its original combined educational business as a medium- to long-term initiative. • Even though they are not profitable at this time, div Inc. and divx Inc. are included in the company’s initiatives as a significan

35. Slide 35: Shareholder Return

    Financial Summary for the First Three Quarters of FY2023 Revision of Financial Forecasts div Inc. and divx Inc. as new Subsidiaries Shareholder Return [Reference Documents] ・ Sustainability (Human Capital) Initiatives ・ Other Topics © 2024 Broadmedia Corporation. All Rights Reserved. 35

36. Slide 36: Shareholders Return (Dividends)

    Shareholders Return (Dividends) Although the full-year earnings forecast has been revised downward, the year-end dividend for FY2023 is planned to be 33 yen (+3 yen increase) per share as forecasted at the beginning of the fiscal year. Annual Total amount Payout Dividends of dividends ratio （per sha

37. Slide 37: Let's aim for new growth now!

    "Let’s aim for new growth now!" div and divx joined the Group on January 1, 2024. © 2024 Broadmedia Corporation. All Rights Reserved. 37

38. Slide 38: Thank you for your attention.

    Thank you for your attention. The statements contained here indicate the Company’s current plans, expectations, strategies, and beliefs. Any statements that are not historical facts are forward-looking statements regarding future business performance. This document contains forecasts determined by t

39. Slide 39: Reference Documents

    Financial Summary for the First Three Quarters of FY2023 Revision of Financial Forecasts div Inc. and divx Inc. as new Subsidiaries Shareholder Return [Reference Documents] ・ Sustainability (Human Capital) Initiatives ・ Other Topics © 2024 Broadmedia Corporation. All Rights Reserved. 39

40. Slide 40: Sustainability (Human Capital) Initiatives

    Sustainability (Human Capital) Initiatives FY2022 FY2022 Percentage of eligible employees taking childcare leave: Percentage of female managers Female employees: 100%, 16% Male employees: 60% 100% （Target） 20% （Target） 60% 16% Percentage of eligible male employees Percentage of taking childcare leav

41. Slide 41: Consolidated Financial Results by Business Segment: Revenue Breakdown

    Consolidated Financial Results by Business Segment Breakdown of revenue by income type upper row：revenue（Unit：Million yen)(Amounts are rounded down to the nearest million yen) lower row： Composition ratio Breakdown of income Breakdown of revenue from by stock/flow original products/others Total Prod

42. Slide 42: Strategic Action of Studio & Production

    Strategic Action of Studio & Production We seek to capitalize on the growth of demand for barrier-free facilities. Following the revision of the basic policy on the Act for Eliminating Discrimination against Persons with Disabilities, from April 2024, with regard to video content, it will become obl

43. Slide 43: Topics (Studio & Production): Audio Describers

    Topics (Studio & Production) We will begin providing the audio describer training lecture course in April 2024 to develop audio-based commentary script writers, thereby enabling people with visual impairments to enjoy video works through an audio-based means. *Audio describers are writers who create

44. Slide 44: Topics (Studio & Production): Accessible Movie Screening

    Topics (Studio & Production) We have subscribed for the CBs of HELLO MOVIE! Inc., a subsidiary of Evixar Inc., a company that provides sound communication solutions, while also engaging in a business alliance to promote overseas expansion. We have established a strong partnership to provide services

45. Slide 45: Topics (Education): eSports Championship Winners

    Topics (Education) NASEF JAPAN ALL JAPAN HIGHSCHOOL eSports “Fortnite" Division 1st & 2nd place winners 1st place winner 22 out of 40 finalist teams are from the Renaissance High School Group. Renaissance High School 407 teams from 162 schools around Japan (Ikebukuro Campus) entered the championship

46. Slide 46: Topics (Broadcast): Fishing Vision Online Shop

    Topics (Broadcast) We have opened the Fishing Vision official online shop. https://fishingv.official.ec/ Many products developed originally and products developed in collaboration with the program will be sold. We will enhance the service along with the second pillar of our business, the Fishing Vis

47. Slide 47: Topics (Technology; Cloud Solutions)

    Topics (Technology; Cloud Solutions) Popular Series “I Am an Air Traffic Controller 4 Narita”s “Extend Scenario 1” is released Recommended for people who wish to enjoy Narita Airport to their heart’s content. Beginners are welcome! Collection of additional air traffic control stages with lower level

48. Slide 48: Topics (Others; Promotion of Professional eSports)

    Topics (Others; Promotion of Professional eSports) CYCLOPS has collaborated with the USEN Networks (USEN-NEXT Group) The company started to provide the CYCLOPS Hikari powered by USEN Networks service. https://cyclops-osaka.jp/cp/cag_hikari Stable fiber optic line-based service will be provided to eS

49. Slide 49: Programming Education Market for High School Students Expected to Expand

    [Reference] Efforts to promote programing as a compulsory subject in schools 2025 Questions regarding 2022 programing on general Provision of entrance exams 2021 programing as a 2020 Provision of Provision of compulsory subject programing as a in high schools programing as a compulsory compulsory su

50. Slide 50: Shortage of IT Human Resources and Educational Needs

    [Reference] Shortage of IT human resources and educational needs Implement education in high schools to avoid the need for reskilling in the future. Rankings of occupations desired by male high school students year 2020 year 202１ year 202２ year 202３ boys （n＝520） boys （n＝517） boys （n＝514） boys （n＝262

51. Slide 51: Our Mission

    Our Mission We contribute to communities through quality content and services produced by human creativity. © 2024 Broadmedia Corporation. All Rights Reserved. 51

52. Slide 52: https://www.broadmedia.co.jp/

    https://www.broadmedia.co.jp/ The statements contained here indicate the Company’s current plans, expectations, strategies, and beliefs. Any statements that are not historical facts are forward-looking statements regarding future business performance. This document contains forecasts determined by t

Broadmedia — Q3 FY2023 Earnings Presentation on 6ix