Hakuhodo Dy Holdings Incorporated · TSE:2433
Hakuhodo Dy — H1 FY2023 Earnings Presentation
46 slides from Hakuhodo Dy's earnings presentation, Nov 14, 2023
Slide 1: Consolidated Financial Highlights FY2023 First-half
Consolidated Financial Highlights FY2023 First-half (April-Sep., 2023) November 14, 2023 Hakuhodo DY Holdings, Inc.
Slide 2: Consolidated Results Highlights of 1H FY2023
Consolidated Results Highlights of 1H FY 2023 (Notes about Retroactive Restatement) In April 2022, we conducted tentative accounting treatment for the business combination associated with the acquisition of shares of SoldOut, Inc. in accordance with Japanese GAAP. The treatment was finalized at the
Slide 3: 1H FY2023 Income Statement Highlights
1H FY2023 Income Statement Highlights 1H FY2023 （Millions of JPY） Actual YOY D Billings 697,854 -21,791 -3.0% Revenue 399,558 -19,824 -4.7% Operating Income 1,346 -19,165 -93.4% Ordinary Income 3,562 -20,431 -85.2% Net Income Attributable to Owners of Parent -10,872 -22,586 -192.8% - Billings decrea
Slide 4: 1H FY2023 Results (Excluding Investment Business)
1H FY2023 Results (Excluding Investment Business) 1H FY2023 (Millions of JPY) Actual YOY Billings 691,576 -24,034 -3.4% Revenue 393,279 -22,067 -5.3% Gross Profit 168,962 -4,405 -2.5% Gross Margin 24.4% +0.2pt SGA 173,534 +16,905 +10.8% Operating Income -4,571 -21,310 -127.3% Operating Margin -2.7%
Slide 5: Billings (Excluding Investment Business)
Billings (Excluding Investment Business) 1H FY2023 Consolidated ¥691.5 billion (-¥24.0 billion / -3.4% YoY) (Billions of JPY) • In Japan, excluding the impact of COVID-19 related BPO operations, our performance is on par with the previous year. We have been promoting the use of AaaS and group collab
Slide 6: Gross Profit (Excluding Investment Business)
Gross Profit (Excluding Investment Business) 1H FY2023 Consolidated Gross Profit : ¥168.9 billion (-¥4.4 billion / -2.5% YoY) - Gross Margin : 24.4% (+0.2pt YoY) (Billions of JPY) • In Japan, gross margin improved by 0.1 pt YoY due to the contribution of various technology- based solutions such as A
Slide 7: SG&A (Excluding Investment Business)
SG&A (Excluding Investment Business) 1H FY2023 Consolidated ¥173.5 billion (+¥16.9 billion / +10.8% YoY) (Billions of JPY) Major Change Factors in SG&A (Billions of JPY) 1H FY22 SG&A 156.6 Change in scope of consolidation +2.8 Amortization of goodwill -0.5 Impact of exchange rate fluctuations +3.3 N
Slide 8: Operating Income/Loss (Excluding Investment Business)
Operating Income/Loss (Excluding Investment Business) 1H FY2023 Consolidated Operating Loss : -¥4.5 billion (-¥21.3 billion) - Operating Margin : -2.7% (-12.4pt YoY) Operating Income before Goodwill : ¥3.1 billion (-¥21.8 billion) - Operating Margin before Goodwill : 1.9% (-12.5pt YoY) Operating Inc
Slide 9: Guidance for FY2023
Guidance for FY2023 8
Slide 10: Guidance for FY2023
Guidance for FY2023 ・ Based on the 1H results and the 2H outlook, we have revised our full-year forecasts. ・ The main reasons for the revision are as follows. The first is a decrease in earnings at some bases in North America. Despite pushing for cost structure reforms and expecting to improve profi
Slide 11: Shareholder Returns
Shareholder Returns 10
Slide 12: Shareholder Returns
Shareholder Returns Dividend forecast for FY2023 • The annual dividend will be ¥32 per share (including an interim dividend of ¥16 per share), unchanged from the previous forecast. 11
Slide 13: 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 14: Supplements
Supplements
Slide 15: Interim Income Statements
Interim Income Statements Japanese GAAP-basis Interim Income Statements for 1H FY2023 YTD（6-Month） by Quarter（3-Month） （Millions of JPY） Actual YOY Q1 YOY Q2 YOY Billings 697,854 -21,791 -3.0% 354,422 +1.5% 343,432 -7.3% Revenue 399,558 -19,824 -4.7% 201,466 +3.0% 198,091 -11.5% Gross Profit 175,090
Slide 16: Results Excluding Investment Business
Results Excluding Investment Business 1H FY2023 YTD（6-Month） by Quarter（3-Month） Results Excluding Investment Business （Millions of JPY） Actual YOY Q1 YOY Q2 YOY Billings 691,576 -24,034 -3.4% 348,568 +0.8% 343,007 -7.2% Revenue 393,279 -22,067 -5.3% 195,612 +1.7% 197,667 -11.3% Gross Profit 168,962
Slide 17: Results by Region
Results by Region 1H FY2023 （Millions of JPY） Actual YOY Japan Billings 591,807 -23,297 -3.8% Revenue 293,510 -21,330 -6.8% Gross Profit 130,975 -2,818 -2.1% SG&A 109,182 +10,565 +10.7% Operating Income 21,792 -13,383 -38.0% Overseas Billings 114,834 +6,001 +5.5% Revenue 114,834 +6,001 +5.5% Gross P
Slide 18: Results by Region (YTD, by Quarter)
Results by Region (YTD, by Quarter) 1H FY2023 YTD（6-Month） by Quarter（3-Month） Japan (Excluding Investment Business) （Millions of JPY） YTD Actual YOY Q1 YOY Q2 YOY Billings 585,529 -25,540 -4.2% 297,790 -0.2% 287,738 -8.0% Gross Profit 124,847 -5,131 -3.9% 62,137 +1.4% 62,710 -8.7% Gross Margin 21.3
Slide 19: Results by Region (Japan: Excluding Investment Business)
Results by Region (Japan: Excluding Investment Business) 1H FY2023 (Millions of JPY) Actual YOY Gross profit & Operating Income before amortization of goodwill by quarter （Millions of JPY） Billings 585,529 -25,540 -4.2% Revenue 287,232 -23,608 -7.6% Gross Profit 124,847 -5,131 -3.9% Gross Margin 21.
Slide 20: Results by Region (Overseas)
Results by Region (Overseas) 1H FY2023 Gross profit & Operating Income before amortization (Millions of JPY) Actual YOY of goodwill by quarter （Millions of JPY） Billings 114,834 +6,001 +5.5% Revenue 114,834 +6,001 +5.5% Gross Profit 50,110 +3,750 +8.1% Gross Margin 43.6% +1.0pt SGA 56,674 +6,190 +12
Slide 21: Billings by Service Category
Billings by Service Category 1H FY2023 Composition (Millions of JPY) Actual YOY Ratio Newspapers 14,048 -325 -2.3% 2.4% Magazines 3,566 -58 -1.6% 0.6% Radio 5,030 -602 -10.7% 0.9% Television 177,092 -1,057 -0.6% 30.9% Trad-Media Service Subtotal 199,737 -2,043 -1.0% 34.8% Internet Media 164,101 +7,7
Slide 22: Billings by Service Category (YTD, by Quarter)
Billings by Service Category (YTD, by Quarter) 1H FY2023 YTD（6-Month） by Quarter（3-Month） （Millions of JPY） YTD Actual YOY Q1 YOY Q2 YOY Newspapers 14,048 -325 -2.3% 7,130 -2.0% 6,917 -2.5% Magazines 3,566 -58 -1.6% 1,690 +8.8% 1,876 -9.4% Radio 5,030 -602 -10.7% 2,524 -11.9% 2,505 -9.4% Television
Slide 23: Billings by Clients' Industry
Billings by Clients’ Industry 1H FY2023 （Millions of JPY） Actual YOY Composition Information/Communications 57,013 -9,220 -13.9% 11.9% Beverages/Cigarettes/Luxury foods 51,800 -7,091 -12.0% 10.8% Automobiles/Related products 43,916 -3,000 -6.4% 9.2% Restaurant/Services 35,030 +3,672 +11.7% 7.3% Cosm
Slide 24: Billings by Clients' Industry
Billings by Clients’ Industry 1H FY2023 - Positive Industries Distribution/Retailing 1H FY2023 Actual ¥ 27.9bil YoY +¥ 5.6bil (+25.6%) Transportation/Leisure ¥ 20.3bil +¥ 3.9bil (+24.4%) - Negative Industries Government/Organizations 1H FY2023 Actual ¥ 8.7bil YoY -¥18.6bil (-68.2％) Information/Commu
Slide 25: Billings by Clients' Industry (by Quarter) 1
Billings by Clients’ Industry (by Quarter) 1 FY2021 FY2022 FY2023 (Millions of JPY) 24
Slide 26: Billings by Clients' Industry (by Quarter) 2
Billings by Clients’ Industry (by Quarter) 2 FY2021 FY2022 FY2023 (Millions of JPY) 25
Slide 27: Billings by Clients' Industry (by Quarter) 3
Billings by Clients’ Industry (by Quarter) 3 FY2021 FY2022 FY2023 (Millions of JPY) 26
Slide 28: Billings by Clients' Industry (by Quarter) 4
Billings by Clients’ Industry (by Quarter) 4 FY2021 FY2022 FY2023 (Millions of JPY) 27
Slide 29: Selling, General & Administrative Expenses
Selling, General & Administrative Expenses 1H FY2023 （Millions of JPY） Actual YOY Personnel 116,661 +12,753 +12.3% Rent 10,440 +633 +6.5% Depreciations 4,627 +687 +17.5% Amortization of Goodwill 7,703 -511 -6.2% Others 34,310 +3,523 +11.4% Others 57,082 +4,333 +8.2% SGA total 173,744 +17,086 +10.9%
Slide 30: Other Income & Extra-ordinary Items
Other Income & Extra-ordinary Items 1H FY2023 （Millions of JPY） Actual YOY Other Income/Loss Non-operating Income 4,014 -294 Interest Income 264 +75 Dividend Income 1,395 +77 FOREX 1,299 -41 Investment Partership Income - -471 Non-operating Expenses 1,798 +971 Interest Expenses 585 +375 Equity Metho
Slide 31: Balance Sheets
Balance Sheets （Millions of JPY） As of September 2023 Change * Composition Current Assets 595,471 -85,257 61.9% Cash & Deposits 158,619 -4,362 Accounts Recievable 319,773 -91,334 Non-current Assets 366,872 21,185 38.1% Tangible Assets 62,378 3,958 Intangible Assets 112,391 3,924 Goodwill 72,063 385
Slide 32: Cash Flow Statements
Cash Flow Statements 1H FY2023 （Millions of JPY） Actual YOY Cash Flows from Operating Activities -23,587 -71,204 Cash Flows from Investing Activities -11,465 +7,385 Purchase of property, plant and equipment -3,181 -650 Purchase of intangible assets -5,346 -686 Purchase of investment securities -3,51
Slide 33: Update on Progress under the Medium-Term Business Plan
Update on Progress under the Medium-Term Business Plan Abbreviations HC: Hakuhodo DY Holdings, H: Hakuhodo, D: Daiko, Y: Yomiko Advertising, MP: Hakuhodo Media Partners, DAC: Digital Advertising Consortium irep: IREP, SO: SoldOut, HP: Hakuhodo Products, Kyushu H: Kyushu Hakuhodo
Slide 34: Medium-Term Business Plan (Revised period: FY2021 – FY2023)
Medium-Term Business Plan (Revised period: FY2021 – FY2023) *Initial plan With sei-katsu-sha insight as our cornerstone, the Hakuhodo DY Group will combine our creativity, integrative capabilities, and data and technology utilization skills to play a Core Medium- leading role in evolving companies’
Slide 35: Overview of Progress in the First Half of FY2023
Overview of Progress in the First Half of FY2023 ◼ Gross profit after adjustments was lower than the previous year due to the decrease of COVID-19 pandemic-related BPO business, but increased by double-digit from base year ◼ While operating income after adjustments* before amortization of goodwill h
Slide 36: Major Factors in Decrease in Profit
Major Factors in Decrease in Profit Increased revenue and reduced income in overseas business 1 ✓ Although the topline of overseas business is growing, the bottom line has declined due to rising personnel costs in NA and increased upfront investments in digital domains in Asia. Reactionary decline o
Slide 37: Major Factors in Decrease in Profit (Details)
Major Factors in Decrease in Profit (Details) ◼ While the overseas business has been expanding, the impact of rising personnel costs in North America, some underperforming branches, and the need for strengthening digital capabilities in Asia, along with the overlapping effects of upfront investments
Slide 38: Major Factors in Decrease in Profit (Details)
Major Factors in Decrease in Profit (Details) ◼ Investments in technologies may result in short-term cost increases, but in the medium term, they contribute to enhancing competitiveness and improving operational efficiency. ◼ Working hours per employee are decreasing due to investment in human resou
Slide 39: Initiatives to Transform Our Services and Business Foundation
Initiatives to Transform Our Services and Business Foundation We are pursuing the following four initiatives adopted under the MTBP to strengthen our structure and response capabilities: Transform the services we provide: 1 Implementation of full-funnel Sei-katsu-sha Data- Driven Marketing Strengthe
Slide 40: Transform the Services We Provide: Expansion of marketing implementation domains
Transform the Services We Provide: Expansion of marketing implementation domains ◼ Gross profit in marketing execution domains excluding COVID-19-related BPO business continued to rise with CAGR of 12.3% vs. the base year, as personnel dispatch services and space design services have grown. ◼ We are
Slide 41: Transform the Services We Provide: Transform media business
Transform the Services We Provide: Transform media business ◼ Billings in the Internet domains rose with CAGR of 15.3% vs. the base year by successfully capturing ad demand, thanks to structural enhancement through M&A and investments in human resources. ◼ Accelerate efforts in emerging digital adve
Slide 42: Implement Sei-katsu-sha Insight-Based Digital Transformation (DX)
Transform the Services We Provide: Implement Sei-katsu-sha Insight-Based Digital Transformation (DX) ◼ Undertake new service development and social infrastructure provision leveraging the latest technology while addressing issues facing sei-katsu-sha, companies and society. Self avatar to support h
Slide 43: Strengthen Response Capabilities for Borderless Corporate Activities
Continuously Pursue Transformation Based on Existing Strategies: Strengthen Response Capabilities for Borderless Corporate Activities ◼ Gross profit from overseas operations grew with CAGR of +19.4% from the base year, and the ratio of overseas gross profit to total adjusted gross profit grew to 29.
Slide 44: Accelerate Innovation through External Collaboration
Continuously Pursue Transformation Based on Existing Strategies: Accelerate Innovation through External Collaboration ◼ Continued business development with various partners in various schemes, such as a JV to support startups, a JV to develop new market, and a JV to launch new service. Growth suppor
Slide 45: Strengthen Our Foundation for Sustainable Business Management
Strengthen Our Foundation for Sustainable Business Management ◼ Operating companies started activities to create new business to attain our Sustainability Goal. ◼ The continued enhancement of our initiatives, including for climate action and respect for human rights, has gained high marks from third
Slide 46: HakuhodoDY holdings
HakuhodoDY holdings
Hakuhodo DY Holdings — H1 FY2023 Earnings Presentation on 6ix