Hakuhodo Dy Holdings Incorporated · TSE:2433

Hakuhodo Dy — Q3 FY2023 Earnings Presentation

48 slides from Hakuhodo Dy's earnings presentation, Feb 9, 2024

Slide 1: Consolidated Financial Highlights FY2023 Third Quarter (April-Dec., 2023)
Consolidated Financial Highlights FY2023 Third Quarter (April-Dec., 2023) February 9, 2024 Ⓒ HAKUHODO DY Holdings Inc, All Rights Reserved.
Slide 2: Highlights of Consolidated Results for Q3 FY2023
Highlights of Consolidated Results for Q3 FY 2023 (Notes about Retroactive Restatement) With regard to the business combination following the acquisition of shares in Sold Out Inc. in April 2022, we had been applying provisional accounting treatments during the previous third quarter consolidated ac
Slide 3: Q3 FY2023 Income Statement Highlights
Q3 FY2023 Income Statement Highlights  Billings decreased by 0.6% YoY, and revenue decreased by 1.0% YoY.  Operating income decreased by 56.7% to ¥15.6 billion. Ordinary income decreased by 57.3% to ¥16.9 billion.  Net income (loss) attributable to owners of parent decreased by ¥25.4 billion YoY
Slide 4: Q3 FY2023 Results (Excluding Investment Business) 1
Q3 FY2023 Results (Excluding Investment Business) 1  Billings decreased by 0.7% YoY. Gross profit increased by 0.3% YoY. Gross margin improved by 0.2pt.  SG&A expenses increased by 8.9% YoY. Operating income decreased by ¥20.6 billion YoY to ¥9.5 billion.  Operating income before goodwill decreas
Slide 5: Q3 FY2023 Results (Excluding Investment Business) 2
Q3 FY2023 Results (Excluding Investment Business) 2  While both billings and profits declined in the first half (April – September), performance turned around in the third quarter (October - December), with both sales and profits increasing. Changes from H1 to Q3 (YoY Comparison) H1 (April - Septem
Slide 6: Q3 FY2023 Results (Excluding Investment Business) 3
Q3 FY2023 Results (Excluding Investment Business) 3  Key Factors for the Profitability Turnaround in the Third Quarter (October - December) • Recovery of top-line in Japan  “Television” outperformed the market and “Internet Media” continued to grow steadily due to the utilization of AaaS and the p
Slide 7: Q3 FY2023 Results (Excluding Investment Business) 4
Q3 FY2023 Results (Excluding Investment Business) 4  Continued: Key Factors for the Profitability Turnaround in the Third Quarter (October - December) • Cost restructure in North America contributed to the recovery of profitability in overseas business, as well as continued stable growth in Asia •
Slide 9: Guidance for FY2023
Guidance for FY2023  There is no change in the full-year earnings forecast.  Additionally, we are currently considering various measures aimed at streamlining the balance sheet. Should these measures impact the performance of FY2023, we will disclose the details promptly. (Guidance for FY2023) （Mi
Slide 11: Shareholder Returns
Shareholder Returns  The annual dividend will be ¥32 per share (including an interim dividend of ¥16 per share), unchanged from the previous forecast. (Dividend forecast for FY2023) Ⓒ HAKUHODO DY Holdings Inc, All Rights Reserved. 10
Slide 12: 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 polic
Slide 14: Interim Income Statements
Interim Income Statements Japanese GAAP-basis Interim Income Statements for Q3 FY2023 YTD（9-Month） by Quarter（3-Month）（Millions of JPY） Actual YOY Q1 YOY Q2 YOY Q3 YOY Billings 1,117,694 -6,698 -0.6% 354,422 +1.5% 343,432 -7.3% 419,839 +3.7% Revenue 646,309 -6,723 -1.0% 201,466 +3.0% 198,091 -11.5%
Slide 15: Results Excluding Investment Business
Results Excluding Investment Business Q3 FY2023 YTD（9-Month） by Quarter（3-Month） Results Excluding Investment Business （Millions of JPY） Actual YOY Q1 YOY Q2 YOY Q3 YOY Billings 1,110,838 -7,294 -0.7% 348,568 +0.8% 343,007 -7.2% 419,261 +4.2% Revenue 639,453 -7,319 -1.1% 195,612 +1.7% 197,667 -11.3%
Slide 16: Results by Region
Results by Region Q3 FY2023, YTD （Millions of JPY） Actual YOY Japan Billings 954,510 -4,790 -0.5% Revenue 483,124 -4,815 -1.0% Gross Profit 209,918 +1,050 +0.5% SG&A 165,295 +14,480 +9.6% Operating Income 44,623 -13,430 -23.1% Overseas Billings 176,258 +4,478 +2.6% Revenue 176,258 +4,478 +2.6% Gross
Slide 17: Results by Region (YTD, by Quarter)
Results by Region(YTD, by Quarter) YTD（9-Month） by Quarter（3-Month） Q3 FY2023 Japan (Excluding Investment Business) （Millions of JPY） YTD Actual YOY Q1 YOY Q2 YOY Q3 YOY Billings 947,653 -5,386 -0.6% 297,790 -0.2% 287,738 -8.0% 362,124 +5.9% Gross Profit 203,505 +644 +0.3% 62,137 +1.4% 62,710 -8.7%
Slide 18: Results by Region (Japan: Excluding Investment Business)
Results by Region (Japan: Excluding Investment Business) Q3 FY2023, YTD (Millions of JPY) Actual YOY Gross profit & Operating Income before amortization of goodwill by quarter Billings 947,653 -5,386 -0.6% （Millions of JPY） Revenue 476,268 -5,447 -1.1% Gross Profit 203,505 +644 +0.3% Gross Margin 21
Slide 19: Results by Region (Overseas)
Results by Region (Overseas) Q3 FY2023, YTD (Millions of JPY) Actual YOY Billings 176,258 +4,478 +2.6% Gross profit & Operating Income before amortization of goodwill by quarter Revenue 176,258 +4,478 +2.6% （Millions of JPY） Gross Profit 77,289 +4,936 +6.8% Gross Margin 43.8% +1.7pt SGA 84,955 +6,75
Slide 20: Billings by Service Category
Billings by Service Category Composition Q3 FY2023, YTD (Millions of JPY) Actual YOY Ratio Newspapers 22,492 -1,110 -4.7% 2.4% Magazines 5,680 -419 -6.9% 0.6% Radio 7,406 -1,077 -12.7% 0.8% Television 281,923 +214 +0.1% 30.4% Trad-Media Service Subtotal 317,502 -2,392 -0.7% 34.2% Internet Media 254,
Slide 21: Billings by Service Category (YTD, by Quarter)
Billings by Service Category (YTD, by Quarter) Q3 FY2023 YTD（9-Month） by Quarter（3-Month）（Millions of JPY） YTD Actual YOY Q1 YOY Q2 YOY Q3 YOY Newspapers 22,492 -1,110 -4.7% 7,130 -2.0% 6,917 -2.5% 8,443 -8.5% Magazines 5,680 -419 -6.9% 1,690 +8.8% 1,876 -9.4% 2,113 -14.6% Radio 7,406 -1,077 -12.7%
Slide 22: Billings by Clients' Industry
Billings by Clients’ Industry （Millions of JPY） Actual YOY Composition Q3 FY2023, YTD Information/Communications 92,154 -11,463 -11.1% 11.8% Beverages/Cigarettes/Luxury foods 87,191 -1,066 -1.2% 11.2% Automobiles/Related products 76,814 +3,443 +4.7% 9.8% Foodstuffs 55,192 -3,881 -6.6% 7.1% Restauran
Slide 23: Billings by Clients' Industry
Billings by Clients’ Industry  Positive Industries Transportation/Leisure Q3 FY2023 Actual ¥ 35.5bil YoY +¥ 7.2bil (+25.4%) Distribution/Retailing ¥ 46.1bil +¥ 5.2bil (+12.7%)  Negative Industries Government/Organizations Q3 FY2023 Actual ¥19.9bil YoY -¥14.5bil (-42.2％) Information/Communications
Slide 28: Selling, General & Administrative Expenses
Selling, General & Administrative Expenses Q3 FY2023, YTD （Millions of JPY） Actual YOY Major Change Factors in SG&A (Millions of JPY) Personnel 176,011 +16,268 +10.2% FY22 Q3 SG&A 240,791 Rent 15,498 +527 +3.5% Change in scope of consolidation +2,884 Depreciations 7,309 +1,244 +20.5% Amortization of
Slide 29: Other Income & Extra-ordinary Items
Other Income & Extra-ordinary Items Q3 FY2023, YTD Other Income/Loss （Millions of JPY） Actual YOY Non-operating Income 4,062 -984 Interest Income 373 +56 Dividend Income 2,025 +151 FOREX 273 -917 Investment Partership Income - -465 Non-operating Expenses 2,694 +1,340 Interest Expenses 998 +620 Equit
Slide 30: Balance Sheets
Balance Sheets （Millions of JPY） As of December 2023 Change * Composition Current Assets 673,148 -7,580 64.5% Cash & Deposits 176,090 13,108 Accounts Recievable 371,902 -39,206 Non-current Assets 370,378 24,691 35.5% Tangible Assets 63,582 5,162 Intangible Assets 110,138 1,671 Goodwill 69,936 -1,741
Slide 31: Cash Flow Statements
Cash Flow Statements Q3 FY2023, YTD （Millions of JPY） Actual YOY Cash Flows from Operating Activities -18,712 -69,711 Cash Flows from Investing Activities -13,066 +13,923 Purchase of property, plant and equipment -5,479 -1,813 Purchase of intangible assets -7,267 -26 Purchase of investment securitie
Slide 34: Medium-Term Business Plan (Revised: FY2021 – FY2023)
Medium-Term Business Plan (Revised: FY2021 – FY2023) *Initial plan With sei-katsu-sha insight as our cornerstone, the Hakuhodo DY Group will combine our creativity, Core Medium Term integrative capabilities, and data and technology utilization skills to play a leading role in evolving Strategy compa
Slide 35: Review of progress on the current Medium-Term Business Plan
Review of progress on the current Medium-Term Business Plan  Initiatives listed in the Medium-Term Business Plan has made steady headway despite some challenges going forward. • Expanded the foundation in marketing practices, digital, and technology by strategic investments. Transform the services
Slide 36: Progress in medium-term business targets/important indicators
Progress in medium-term business targets/important indicators  Performance on “growth potential” measures, including gross profit, exceeded initially planned levels, but we still face challenges in terms of profitability. Medium-term target FY2023 outlook Operating income before ¥65 billion or over
Slide 38: Goal: From a group of advertising companies to a creativity platform
Goal From a group of advertising companies to a With sei-katsu-sha–centered creativity as our edge, the HDY Group aims to be a group that creates the future by connecting sei-katsu-sha, organization and society to generate new relationship value. Ⓒ HAKUHODO DY Holdings Inc, All Rights Reserved. 37
Slide 39: Six business domains of our creativity platform
Six business domains of our creativity platform  The six business domains to create new relationship value by leveraging sei-katsu-sha-centered creativity as our edge. 1 Consulting business 4 Technology business 2 Marketing business 5 Content business 3 Global business 6 Incubation business Ⓒ HAKUH
Slide 40: Business restructuring
Business restructuring  We will ensure upscaling in the six business domains and seek to improve their profitability and stability by fostering collaboration between them.  We will form a specialized organization specifically to promote transformation across the Group, in order to expand the busin
Slide 41: Strategy by business domain: Consulting and Marketing
Strategy by business domain 1 Consulting business 2 Marketing business Growth driven by the uniqueness of operating Consulting in the marketing domain companies To date Brand design consulting Design consulting Launch a new company offering Enhance core functions and Going forward professional servi
Slide 42: Enhancement of marketing business
Enhancement of marketing business  Improve collaboration among operating companies and diversify earnings models  Enhance functions for implementing integrated marketing, digital marketing and commerce business  Implement an “integrated marketing platform” to upgrade and enhance the efficiency of
Slide 43: Establishment of a digital core
Establishment of a digital core  Integrate IREP and DAC to form a new digital core company to aggregate group resources and expertise.  Boost competitiveness and productivity in the digital market to be the No.1 in the Japanese market. Provide Resources / Expertise Brand Agencies Media Agency Refo
Slide 44: Strategy by business domain: Global and Technology
Strategy by business domain 3 Global business 4 Technology business Expansion around uniform Focus on the enhancement of foundations and management of domestic and international resources required for leveraging technologies businesses and specialization and innovation To date kyu and Hakuhodo to fo
Slide 45: Strategy by business domain: Content and Incubation
Strategy by business domain 5 Content business 6 Incubation business Creation of collaboration platforms and business Addressed as part of marketing services development projects To date MIRAI Business Division Build a new earnings model as Evolve the incubation function within Going content busines
Slide 46: Extension of relationship values created by the HDY Group
Extension of relationship values created by the HDY Group  The scope of relationship values created by the Group will expand further through connections to the wider world facilitated by the creativity platform Consulting business Clients Ventures Incubation business Marketing business Media compan
Slide 47: Management that prioritizes social responsibility
Management that prioritizes social responsibility  Focus on strengthening compliance and promoting sustainability to fulfill social responsibility Corporate Social Responsibility Social Impact • Challenge for a 50% reduction in CO2 emissions by 2030 E nvironment - Commenced introduction of renewabl

Hakuhodo DY Holdings — Q3 FY2023 Earnings Presentation on 6ix

Hakuhodo Dy — Q3 FY2023 Earnings Presentation

Slide 1: Consolidated Financial Highlights FY2023 Third Quarter (April-Dec., 2023)

Slide 2: Highlights of Consolidated Results for Q3 FY2023

Slide 3: Q3 FY2023 Income Statement Highlights

Slide 4: Q3 FY2023 Results (Excluding Investment Business) 1

Slide 5: Q3 FY2023 Results (Excluding Investment Business) 2

Slide 6: Q3 FY2023 Results (Excluding Investment Business) 3

Slide 7: Q3 FY2023 Results (Excluding Investment Business) 4

Slide 8: Guidance for FY2023

Slide 9: Guidance for FY2023

Slide 10: Shareholder Returns

Slide 11: Shareholder Returns

Slide 12: Cautionary Statements Concerning Forward-looking Statements, Change in accounting standards & Note Concerning Audits

Slide 13: Supplements

Slide 14: Interim Income Statements

Slide 15: Results Excluding Investment Business

Slide 16: Results by Region

Slide 17: Results by Region (YTD, by Quarter)

Slide 18: Results by Region (Japan: Excluding Investment Business)

Slide 19: Results by Region (Overseas)

Slide 20: Billings by Service Category

Slide 21: Billings by Service Category (YTD, by Quarter)

Slide 22: Billings by Clients' Industry

Slide 23: Billings by Clients' Industry

Slide 24: Billings by Clients' Industry (by Quarter)

Slide 25: Billings by Clients' Industry (by Quarter)

Slide 26: Billings by Clients' Industry (by Quarter)

Slide 27: Billings by Clients' Industry (by Quarter)

Slide 28: Selling, General & Administrative Expenses

Slide 29: Other Income & Extra-ordinary Items

Slide 30: Balance Sheets

Slide 31: Cash Flow Statements

Slide 32: Hakuhodo DY Holdings New Medium-Term Business Plan (Summary)

Slide 33: Review of Current Medium-Term Business Plan

Slide 34: Medium-Term Business Plan (Revised: FY2021 – FY2023)

Slide 35: Review of progress on the current Medium-Term Business Plan

Slide 36: Progress in medium-term business targets/important indicators

Slide 37: Outline of New Medium-Term Business Plan

Slide 38: Goal: From a group of advertising companies to a creativity platform

Slide 39: Six business domains of our creativity platform

Slide 40: Business restructuring

Slide 41: Strategy by business domain: Consulting and Marketing

Slide 42: Enhancement of marketing business

Slide 43: Establishment of a digital core

Slide 44: Strategy by business domain: Global and Technology

Slide 45: Strategy by business domain: Content and Incubation

Slide 46: Extension of relationship values created by the HDY Group

Slide 47: Management that prioritizes social responsibility

Slide 48: Abbreviations