Hakuhodo Dy Holdings Incorporated · TSE:2433
Hakuhodo Dy — Q3 FY2021 Earnings Presentation
61 slides from Hakuhodo Dy's earnings presentation, Feb 9, 2022
Slide 1: Consolidated Financial Highlights FY2021 Third Quarter
Consolidated Financial Highlights FY2021 Third Quarter (April-Dec. 2021) February 9, 2022 Hakuhodo DY Holdings, Inc.
Slide 2: Consolidated Results Highlights of Q3 FY2021
Consolidated Results Highlights of Q3 FY 2021
Slide 3: Q3 FY2021 Summary
Q3 FY2021 Summary Recovery trend from COVID-19 continues, with significant increases in both billings and profits. - Significant increase in both billings and profit due to recovery in advertising demand and contribution from Government/Organizations sector business. - Top line recovered to the leve
Slide 4: Q3 FY2021 Income Statement Highlights
Q3 FY2021 Income Statement Highlights （Millions of JPY） Actual YOY Differe Billings 1,039,320 +156,281 +17.7% Revenue 582,602 +110,564 +23.4% Operating Income 47,559 +28,698 +152.2% Ordinary Income 50,401 +28,999 +135.5% Net Income Attributable to Owners of Parent 23,103 +14,012 +154.1% - Both billi
Slide 5: Q3 FY2021 Results (Excluding Investment Business)
Q3 FY2021 Results (Excluding Investment Business) Q3 (YTD) FY2021 (Millions of JPY) Actual YOY vs FY2019 Gross profit & Operating Income before amortization of goodwill by quarter Billings 1,032,855 +155,778 +17.8% -2.9% Revenue 576,137 +110,061 +23.6% +0.6% Gross Profit 253,154 +46,138 +22.3% +7.5%
Slide 6: Results by Region (Japan: Excluding Investment Business)
Results by Region (Japan: Excluding Investment Business) Q3 (YTD) FY2021 (Millions of JPY) Actual YOY vs FY2019 Gross profit & Operating Income before amortization of goodwill by quarter （millions of JPY） Billings 911,735 +133,639 +17.2% -4.3% Revenue 455,017 +87,922 +24.0% -1.5% Gross Profit 199,29
Slide 7: Results by Region (Overseas)
Results by Region (Overseas) Q3 (YTD) FY2021 Gross profit & Operating Income before amortization (Millions of JPY) Actual YOY vs FY2019 of goodwill by quarter （Millions of JPY） Billings 125,734 +22,468 +21.8% +8.5% Revenue 125,734 +22,468 +21.8% +8.5% Gross Profit 56,187 +11,021 +24.4% +14.0% Gross
Slide 8: Billings by Service Category
Billings by Service Category Q3 (YTD) FY2021 Composition (Millions of JPY) Actual YOY （ref.）vs Q3 FY19 Ratio Newspapers 27,944 +1,846 +7.1% 3.1% -4,336 -13.4% Magazines 6,687 -1,131 -14.5% 0.7% -6,788 -50.4% Radio 8,754 -85 -1.0% 1.0% -2,439 -21.8% Television 290,127 +21,568 +8.0% 32.0% -30,011 -9.4
Slide 9: Billings by Clients' Industry
Billings by Clients’ Industry See p.19-23 for details. Q3 (YTD) FY2021 • The scope of tabulation has been expanded and some of the methods of tabulation have been changed from the current fiscal year, and the results of the previous year have been retroactively restated. - Main Positive Industries I
Slide 10: Selling, General & Administrative Expenses
Selling, General & Administrative Expenses Q3 (YTD) FY2021 （Millions of JPY） Actual YOY Major Change Factors in SG&A (Millions of JPY) Personnel 144,786 +11,784 +8.9% Rent 13,836 +91 +0.7% Q3 FY20 SG&A 193,925 Change in scope of consolidation +4,461 Depreciations 5,072 +523 +11.5% Amortization of go
Slide 11: Other Income & Extra-ordinary Items
Other Income & Extra-ordinary Items Q3 (YTD) FY2021 （Millions of JPY） Actual YOY Other Income/Loss Non-operating Income 3,572 -120 Interest Income 223 +18 Dividend Income 1,801 -558 Investment Partership Income 118 +118 Equity Method Earnings 118 +118 Share of profit of entities accounted - -205 Non
Slide 12: Guidance/Dividend for FY2021
Guidance/Dividend for FY2021
Slide 13: Guidance for FY2021
Guidance for FY2021 While there are some uncertain factors such as the spread of infection by the Omicron strain and the international circumstances, we forecast that the current advertising market will continue to be strong. In top line, we expect a significant increase over the previous year, with
Slide 14: Dividend forecast
Dividend forecast Our basic policy is to pay dividends in a stable and continuous manner. The amount of dividends will be determined after comprehensively taking into consideration the status of demand for financial funds, trends in business performance, and the enhancement of retained earnings. Und
Slide 15: Cautionary Statements Concerning Forward-looking Statements
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 polic
Slide 16: Supplements
Supplements
Slide 17: Interim Income Statements
Interim Income Statements Japanese GAAP-basis Interim Income Statements for Q3 FY2021 YTD（9-Month） by Quarter（3-Month） （Millions of JPY） Actual YOY Q1 YOY Q2 YOY Q3 YOY Billings 1,039,320 +156,281 +17.7% 326,964 +25.3% 334,409 +22.5% 377,946 +8.3% Revenue 582,602 +110,564 +23.4% 172,378 +22.3% 198,5
Slide 18: Results Excluding Investment Business
Results Excluding Investment Business Q3 FY2021 YTD （9-Month） by Quarter（3-Month） Results Excluding Investment Business （Millions of JPY） Actual YOY Q1 YOY Q2 YOY Q3 YOY Billings 1,032,855 155,778 +17.8% 323,680 +26.6% 332,528 +21.9% 376,646 +8.0% Revenue 576,137 110,061 +23.6% 169,094 +24.8% 196,64
Slide 19: Results by Region
Results by Region Q3 (YTD) FY2021 （Millions of JPY） Actual YOY Japan Billings 918,200 +134,142 +17.1% Revenue 461,482 +88,425 +23.7% Gross Profit 205,523 +35,758 +21.1% SG&A 142,001 +7,091 +5.3% Operating Income 63,522 +28,666 +82.2% Overseas Billings 125,734 +22,468 +21.8% Revenue 125,734 +22,468 +
Slide 20: Results by Region (YTD, by Quarter)
Results by Region(YTD, by Quarter) Q3 FY2021 YTD （9 -Month） by Quarter（3-Month） Japan (Excluding Investment Business) （Millions of JPY） YTD Actual YOY Q1 YOY Q2 YOY Q3 YOY Billings 911,735 +133,639 +17.2% 284,874 +30.2% 291,169 +19.0% 335,691 +6.7% Gross Profit 199,290 +35,295 +21.5% 58,291 +33.1% 6
Slide 21: Billings by Service Category
Billings by Service Category Q3 FY2021 YTD （9-Month） by Quarter（3-Month） （Millions of JPY） YTD Actual YOY Q1 YOY Q2 YOY Q3 YOY Newspapers 27,944 +1,846 +7.1% 9,201 +44.2% 8,222 -0.1% 10,519 -8.4% Magazines 6,687 -1,131 -14.5% 1,907 -20.2% 2,126 -4.3% 2,653 -17.2% Radio 8,754 -85 -1.0% 2,887 +5.9% 2,
Slide 22: Billings by Clients' Industry
Billings by Clients’ Industry Q3 (YTD) FY2021 （Millions of JPY） Actual YOY Composition vs FY2019 Information/Communications 103,693 +21,317 +25.9% 13.5% +6,366 +6.5% Beverages/Cigarettes/Luxury foods 91,462 +11,667 +14.6% 11.9% +2,309 +2.6% Automobiles/Related products 76,505 -551 -0.7% 9.9% -25,242
Slide 23: Billings by Clients' Industry (YoY, by Quarter) 1/4
Billings by Clients’ Industry (YoY, by Quarter) 1/4 FY2019 FY2020 FY2021 (Millions of JPY) 22
Slide 24: Billings by Clients' Industry (YoY, by Quarter) 2/4
Billings by Clients’ Industry (YoY, by Quarter) 2/4 FY2019 FY2020 FY2021 (Millions of JPY) 23
Slide 25: Billings by Clients' Industry (YoY, by Quarter) 3/4
Billings by Clients’ Industry (YoY, by Quarter) 3/4 FY2019 FY2020 FY2021 (Millions of JPY) 24
Slide 26: Billings by Clients' Industry (YoY, by Quarter) 4/4
Billings by Clients’ Industry (YoY, by Quarter) 4/4 FY2019 FY2020 FY2021 (Millions of JPY) 25
Slide 27: Balance Sheets
Balance Sheets （Millions of JPY） End of June 2021 Change * Composition Current Assets 666,218 39,486 66.7% Cash & Deposits 180,329 1,017 Accounts Recievable 341,996 -18,727 Non-current Assets 332,605 18,233 33.3% Tangible Assets 36,242 1,326 Intangible Assets 71,400 2,349 Goodwill 44,580 2,779 Inves
Slide 28: Cash Flow Statements
Cash Flow Statements Q3 FY2021 （Millions of JPY） Actual YOY Cash Flows from Operating Activities 12,027 +7,510 Cash Flows from Investing Activities -17,822 -7,504 Purchase of property, plant and equipment -3,425 -1,184 Purchase of intangible assets -3,439 +825 Purchase of investment securities -6,17
Slide 29: Revisions to the Medium-Term Business Plan (MTBP)
Revisions to the Medium-Term Business Plan (MTBP)
Slide 30: Medium-Term Business Plan (FY2019-FY2023: 5-year plan)
Medium-Term Business Plan (FY2019-FY2023: 5-year plan) When we released our financial results in November 2020, we announced that, although there were no changes in the Core Medium-Term Strategy, we had withdrawn the numerical targets for the current Medium-Term Business Plan. With sei-katsu-sha i
Slide 31: Progress of Core Medium-Term Strategy
Progress of Core Medium-Term Strategy Although a certain level of progress was made with our Core Medium-Term Strategy, some issues have come to light in a rapidly changing environment. Establish a leading position in the broader digital domain Enhance the sophistication of Sei-katsu-sha Data-Driv
Slide 32: Profit/Loss Situation for FY2021
Profit/Loss Situation for FY2021 ■ Both gross profit after adjustments and operating income before amortization of goodwill are forecast to recover to levels that they were before the COVID-19 pandemic ■ Forecasts include temporary positive factors, such as work related particularly to the COVID-19
Slide 33: Understanding of the Business Environment
Understanding of the Business Environment
Slide 34: Rapidly Changing External Environment Due to the Shift to Complete Digitalization
Rapidly Changing External Environment Due to the Shift to Complete Digitalization Progressing shift to complete digitalized lifestyles and rapid external environment changes resulting from the pandemic – Rapid popularization of online services, leading to a swift transition toward constantly conne
Slide 35: Expansion of the Sei-katsu-sha Interface Market
Expansion of the Sei-katsu-sha Interface Market A world in which various things are connected to the internet has become a reality. As a result, the relationship between things and sei-katsu-sha has evolved into an interface for the mutual exchange of information, rather than a simple contact poin
Slide 36: Expansion of the Sei-katsu-sha Interface Market
Expansion of the Sei-katsu-sha Interface Market Objects around sei-katsu-sha are now linked with the internet and have become digital touchpoints. Drawing on the data these touchpoints provide, we are now able to provide services that are optimized for each individual sei- katsu-sha Understand nee
Slide 37: Sei-katsu-sha Interface Market
Expansion of the Sei-katsu-sha Interface Market New lifestyles have emerged at the boundary lines between people and things, turning the world into a place where new markets are created The acceleration of digitalization brought about by the COVID-19 pandemic has expanded these new markets at a
Slide 38: Expansion from Indirect Touchpoints to Direct Touchpoints
Expansion from Indirect Touchpoints to Direct Touchpoints As the Sei-katsu-sha Interface Market expands, the marketing needs of clients are changing The connection between clients and sei-katsu-sha has expanded from just indirect touchpoints, such as advertising, to include direct touchpoints, s
Slide 39: Direction of the MTBP Revisions
Direction of the MTBP Revisions
Slide 40: Positioning of the MTBP Revisions
Positioning of the MTBP Revisions We have positioned FY2021 to FY2023 as a period in which we accelerate transformation of our services and business foundation to lead with solutions to clients’ marketing and innovation-related challenges and realize sustainable growth for our clients and the Grou
Slide 41: 1. Transform the Services We Provide
1.Transform the Services We Provide
Slide 42: Implementation of Full-Funnel Sei-katsu-sha Data-Driven Marketing
1. Transform the Services We Provide Evolve Sei-katsu-sha Data-Driven Marketing, with which we have led the way, to enable it to be implemented across the full funnel Implementation of Full-Funnel Sei-katsu-sha Data-Driven Marketing (1) Expand marketing execution domains (2) Transform media busine
Slide 43: Expand marketing execution domains
１-（１）Expand marketing execution domains As the Sei-katsu-sha Interface Market expands, it is essential that we expand our functions in marketing execution domains We are pressed with the urgent task of strengthening our ability to carry out integrated management in a more neutral and sophisticat
Slide 44: Expand marketing execution domains
１-（１）Expand marketing execution domains Although we have improved profitability by implementing in-house advertising production, beyond the advertising domain, we have enhanced functions that support the implementation of marketing activities in anticipation of changes in companies’ marketing need
Slide 45: Transform media business
１-（２）Transform media business Focusing on transforming our business through Advertising as a Service (AaaS), we will maintain and expand existing business by increasing the added value of media Within the Group, we will establish an ecosystem for providing digital services that cater to the grow
Slide 46: Promote Sei-katsu-sha insight-based digital transformation (DX)
１‐（３）Promote Sei-katsu-sha insight-based digital transformation (DX) The Group’s DX operations aim to transform companies’ marketing activities and their businesses themselves with a focus on sei-katsu-sha. In addition, these operations aim to transform society as a whole Transformation of busines
Slide 47: (Reference) Examples of Sei-katsu-sha Insight-based DX
(Reference) Examples of Sei-katsu-sha Insight-based DX The Group’s diverse capabilities have given rise to examples of DX involving the design of interfaces between our clients and sei-katsu-sha and the provision of new value to sei-katsu-sha and society as a whole Passenger Car Ride-Share–Based P
Slide 48: Strengthen Cross-Organizational Functions to Accelerate Transformation
２．Strengthen Cross-Organizational Functions to Accelerate Transformation
Slide 49: Strengthen Our Groupwide Competitiveness
２．Strengthen Our Groupwide Competitiveness To accelerate transformation, we are moving forward with efforts to enhance three new cross-organizational functions, as well as our existing media functions. By doing so, we will transition to management that further emphasizes Groupwide optimization – W
Slide 50: Establishment of New Technology Company
Establishment of New Technology Company We will establish a new technology company as a part of our Group shared infrastructure with the aim of evolving ourselves into a more technology-driven corporate group In addition to consolidating resources scattered across the Group, this new technology
Slide 51: Continuously Pursue Transformation based on Existing Strategies
3. Continuously Pursue Transformation based on Existing Strategies
Slide 52: Strengthen Response Capabilities for Borderless Corporate Activities
３-（１）Strengthen Response Capabilities for Borderless Corporate Activities We will actively invest overseas, which is a growth market, as we continue to strengthen our overseas business based on three elements (listed below) Also, we will reinforce the link between the functions of our internatio
Slide 53: Accelerate Innovation through External Collaborations
３-（２）Accelerate Innovation through External Collaborations We will expand our collaborative foundation that links the Group with our business partners and startups, working to create synergies among the strengths all three parties possess. By doing so, we will accelerate innovation of the services
Slide 54: (Reference) Examples of Innovation through External Collaboration
(Reference) Examples of Innovation through External Collaboration We have seen numerous examples of innovation through external collaboration pursued using the UNIVERSITY of CREATIVITY, MIRAI Business Division, and corporate venture capital fund as hubs New Business Creation Upgrading Our Creativi
Slide 55: Strengthen our Foundation for Sustainable Business Management
4. Strengthen our Foundation for Sustainable Business Management
Slide 56: Establishment of an Environment for Sustainable Management
４．Establishment of an Environment for Sustainable Management Guided by a circular value creation model, we will aim to realize our sustainability goal – We expect to reinforce the function of Hakuhodo DY Holdings with a view to implementing our sustainability efforts Sustainability Goal Realize a
Slide 57: Active Investment in Human Resources
Active Investment in Human Resources Our people represent the most important element underpinning the sustainable growth of the Group. To that end, we will move forward with human resource investments, including initiatives that will incur costs in the near term Through these investments, we aim
Slide 58: MTBP Targets
MTBP Targets
Slide 59: MTBP Targets
MTBP Targets We will implement strategic investment in structural reforms aimed at maintaining and enhancing our growth potential and realizing continuous growth over the medium to long term. MTBP Targets (FY2023) *1 Adjusted = Excluding investment projects *2 FY2020–FY2023 Excluding investment
Slide 60: Outline of Medium- to Long-Term Growth
Outline of Medium- to Long-Term Growth Rather than pursue short-term profit growth in the three years, a period in which we find ourselves on the verge of significant transformation, we will move forward with structural reforms and aim to establish a firm foundation for significant growth over the
Slide 61: Hakuhodo DY Holdings
HakuhodoDY holdings
Hakuhodo DY Holdings — Q3 FY2021 Earnings Presentation on 6ix