Hakuhodo Dy Holdings Incorporated · TSE:2433
Hakuhodo Dy — Investor Presentation (February 2022)
34 slides from Hakuhodo Dy's investor presentation, February 2022
Slide 1: Hakuhodo DY Group Medium-Term Business Plan Revisions
Good afternoon. My name is Masayuki Mizushima, and I am the Representative Director & President of Hakuhodo DY Holdings Inc. Please allow me to explain the details of the revisions we have made to the Hakuhodo DY Group’s Medium-Term Business Plan (MTBP). 0
Slide 2: Background to revising the MTBP
We have been moving forward with a variety of initiatives in accordance with the MTBP, which runs through to the end of FY2023. Due to the COVID-19 pandemic’s impact on the economy and advertising market, however, we announced that we had withdrawn the numerical targets for the current MTBP when we
Slide 3: Strategic progress under the Three Fundamentals for Growth
First, let me explain the progress we have made from a strategic perspective. As you can see in this slide, we have achieved a certain level of progress in terms of the plan’s Three Fundamentals for Growth, which are “Establish a leading position in the broader digital domain,” “Strengthen response
Slide 4: Profit and loss situation and FY2021 forecasts
Next, I will explain our profit and loss situation, including our forecasts for FY2021. In FY2020, adjusted gross profit and adjusted operating income before amortization of goodwill both declined due to the impact of the COVID-19 pandemic. In FY2021, however, we forecast that both of these will rec
Slide 5: Details of the MTBP revisions
I will now explain the details of our revisions to the MTBP, in light of the preceding review. First, I will talk about our understanding of the external environment. 4
Slide 6: External environment after COVID-19
As a result of the COVID-19 pandemic, the external environment surrounding the Hakuhodo DY Group has seen dramatic changes from all angles, including the progressing shift to digitalized lifestyles. For example, online services have rapidly become mainstream, and constantly connected lifestyles are
Slide 7: The Sei-katsu-sha Interface Market
We are living in a world in which the connection of things to the internet has become a reality. As a result, the relationships between things and sei-katsu-sha have evolved into interfaces for the mutual exchange of information, rather than simply points of contact. We have named the new market tha
Slide 8: Network of digitalized interfaces
In the Sei-katsu-sha Interface Market, the objects, devices, stores, and media that surround sei-katsu-sha have formed a network of digitalized interfaces. By leveraging this network, companies are now able to provide services that are optimized toward each individual sei-katsu-sha. 7
Slide 9: New lifestyles creating new markets
New lifestyles have emerged at the boundary lines between people and things, turning the world into a place where new markets are being created. The accelerated digitalization brought about by the COVID-19 pandemic has expanded these new markets at a rate that far exceeded our expectations. 8
Slide 10: Changing marketing needs of clients
The marketing needs of our clients are changing amid the expansion of the Sei-katsu-sha Interface Market. In addition to indirect touchpoints such as advertising, direct touch points, including stores and e-commerce websites, will become extremely important in terms of the connection between compani
Slide 11: Direction of the MTBP revisions
Continuing on, I will talk about the direction of the MTBP revisions. 10
Slide 12: Four initiatives of the revised plan
Under the newly revised plan, we have positioned the three fiscal years FY2021 to FY2023 as a period in which we will accelerate transformation of our services and business foundation in order to lead with solutions to clients’ marketing and innovation-related challenges and realize sustainable grow
Slide 13: Initiative 1: Transform the services we provide
Let me explain the first of these four initiatives, which is to “Transform the services we provide.” 12
Slide 14: Data-driven full-funnel marketing
The shift to a digitalized era has been progressing rapidly, and in this era, companies and sei-katsu-sha are becoming constantly connected via various touchpoints. Under these circumstances, there is a growing need for data-driven full-funnel marketing—which entails a comprehensive approach that co
Slide 15: Expand marketing execution domains
The first strategic initiative is “Expand marketing execution domains.” As the Sei-katsu-sha Interface Market expands, we are seeing the connection between clients and sei-katsu-sha extend into direct touchpoints. It is therefore essential that we expand our functions in marketing execution domains.
Slide 16: Response capabilities for companies and social issues
Starting with the establishment of a structure for in-house advertising production, we have sought to enhance functions for supporting the execution of marketing activities that go beyond the domain of advertising. This initiative has focused on a strategy that involves the following: possessing bot
Slide 17: Transform media business
I will now talk about the next strategic initiative, “Transform media business.” The first part of this initiative is transforming our business through Advertising as a Service (AaaS). We believe we need to transform the advertising media business from one that simply involves the sale of ad space t
Slide 18: Tender offer for SoldOut, Inc.
With the aim of enhancing our functions for providing digital services to regional companies, small and medium-sized businesses, and startups, on February 9, 2022, we announced a tender offer to acquire all shares in the digital marketing company SoldOut, Inc, which is listed on the first section of
Slide 19: Sei-katsu-sha Insight-based digital transformation
The third strategic initiative is to “Promote Sei-katsu-sha Insight-based digital transformation.” 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 who
Slide 20: Examples of insight-based DX
The example on the left is a public transport service we helped introduce where local residents share rides with each other using their own cars. The example on the right is a fitting room service developed using 3D avatar technologies. Going forward, we will continue to realize various kinds of val
Slide 21: Initiative 2: Strengthen cross-organizational functions
Now let me explain the second initiative of the MTBP, “Strengthen cross-organizational functions to accelerate transformation.” 20
Slide 22: Three cross-organizational functions
To accelerate transformation and bolster our Groupwide competitiveness, as well as our existing media functions, we are moving forward with the new efforts you see here to enhance three cross-organizational functions. The first is to establish a new company that will serve as a foundation for the Gr
Slide 23: New Group technology company
Utilizing technology is an essential part of bolstering our competitiveness. To that end, we will establish a new technology company to serve as a shared core for the Group with the aim of evolving ourselves into a more technology-driven corporate group. In addition to consolidating resources that a
Slide 24: Initiative 3: Continue transformation based on existing strategies
The third initiative is “Continuously pursue transformation based on existing strategies.” 23
Slide 25: Strengthen response to borderless corporate activities
First, I will comment on “Strengthen response capabilities for borderless corporate activities.” We will actively invest overseas, which will remain a growth market, as we continue to strengthen our overseas business based on the three elements listed on this slide. Additionally, we will strengthen
Slide 26: Accelerate innovation through external collaborations
Next, allow me to comment on “Accelerate innovation through external collaborations.” To date, we have accelerated innovation of both the services we provide and internally by expanding the collaborative foundation that links the Group with our business partners and startups and by generating synerg
Slide 27: Examples of external collaboration
For reference, here are some examples of how we are accelerating innovation through external collaboration. As the slide shows, there are numerous examples of our innovation through external collaboration, which have been pursued using the UNIVERSITY of CREATIVITY (UoC), MIRAI Business Division, and
Slide 28: Initiative 4: Foundation for sustainable business management
The fourth initiative is “Strengthen our foundation for sustainable business management.” 27
Slide 29: Sustainability goal and circular value creation model
As announced in last year’s integrated report, we have adopted “realize a society in which sei-katsu-sha can flourish and live active lifestyles of their choosing” as our sustainability goal, and are working to achieve this goal based on a circular value creation model. As an important theme of our
Slide 30: Investment in human capital
Our people are the most essential element underpinning the sustainable growth of the Group. To that end, we believe that active investment in human resources is crucial to becoming an attractive company that can grow significantly over the medium to long term. As you can see here, we are moving forw
Slide 31: Targets of the MTBP
Lastly, I will explain the targets of the MTBP. 30
Slide 32: Numerical targets for FY2021-FY2023
As I mentioned at the beginning of this presentation, under the newly revised plan, we have positioned the three fiscal years FY2021 to FY2023 as a period in which we will accelerate transformation of our services and business foundation. To that end, we have established numerical targets for the MT
Slide 33: Medium- to long-term growth outline
This slide shows an outline of our medium- to long-term growth. Rather than pursue short-term profit growth in the three fiscal years to FY2023, 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 fo
Slide 34: Closing remarks
This concludes my explanation of the revisions we made to the MTBP. In accordance with the newly revised MTBP, we will steadily work to transform the Group with the aim of realizing significant medium- to long-term growth and enhancing our corporate value. Thank you for your attention. 33
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