Medium-Term Business Plan Progress
Ⓒ Hakuhodo DY Holdings Inc. All rights reserved.
My name is Masayuki Mizushima, and I am the Representative Director and President of Hakuhodo DY Holdings Inc.
I'd like to brief you on the progress of the Hakuhodo DY Group's new Medium-Term Business Plan, or MTBP, launched in April 2024.
CAGR of operating income after adjustments* and before amortization of goodwill
At least +10%
CAGR of gross profit after adjustments*
At least +5%
Operating margin after adjustments* and before amortization of goodwill
ROE before amortization of goodwill
At least 13%
(To be confirmed at time of full-year financial results presentation)
At least 10%
(To be confirmed at time of full-year financial results presentation)
Medium-Term Business Plan (FY2024-FY2026)
Ⓒ Hakuhodo DY Holdings Inc. All rights reserved.
* Excluding gain on disposal of Mercari shares
2
Medium-term Business Plan KPIs
(FY2026)
Enhance profitability and create growth options
Restructuring of marketing business
Upscaling of the growth domain of digital and commerce, and optimizing costs, including in existing business domains
Creation of new growth options
Consulting, technology, content and incubation
Remodeling of global business
Ensuring profitability through cost control while aiming for growth
Enhancement measures for business structure reform
Our goal: creativity platform
With sei-katsu-sha-centered creativity as our edge, the Hakuhodo DY Group aims to be a group that creates the future by connecting sei-katsu-sha, organizations and society to generate new relationship value.
We seek to evolve beyond the framework of a group of advertising companies into a creativity platform with strengths in six business domains, aiming at substantial growth and improved corporate value in the medium to long term through dynamic reform of the business structure.
Medium-term strategy
We are taking action under the Medium-Term Business Plan to achieve the targets presented on this slide by fiscal 2026.
Medium-Term Business Plan progress: FY2024 full-year
FY2023
FY2026
FY2031
Thus far:
Focused on marketing business (advertising in particular)
Medium-Term Business Plan period: 3 years
Enhance profitability and create growth options
Future outlook
Medium-term targets (for FY2026)
Full-year results for FY2024
CAGR of operating income after adjustments* and
before amortization of goodwill
At least +10%
CAGR of gross profit after adjustments*
At least +5%
Operating margin after adjustments* and before
amortization of goodwill
At least 13%
ROE before amortization of goodwill
At least 10%
Ⓒ Hakuhodo DY Holdings Inc. All rights reserved.
* Excluding gain on disposal of Mercari shares
3
6.9%
12.6%
+2.1%
+13.7%
Here are the results for our planned business targets.
I am pleased to report that the growth of operating income after adjustments and before amortization of goodwill, which is the most important KPI, largely exceeded the target.
Gross profit after adjustments managed to sustain positive growth, despite missing the target.
Meanwhile, the operating margin after adjustments and before amortization of goodwill is already nearing the target level to be achieved by fiscal 2026 in the initial year of the Medium-Term Business Plan.
We are committed to continuously increasing profitability by further improving efficiency and implementing growth measures going forward.
ROE before amortization of goodwill failed to reach the target of 10% due mainly to the temporary increase in spending related to the business restructuring in North America.
This is a one-off factor, and we remain firmly committed to achieving the target under the basic policy of improving capital efficiency through profitable growth.
(Re-post) 3-year reform of business structure to enhance profitability and create growth options
1
2
Restructuring of
marketing business
Creation of new
growth options
3 Remodeling of global business
Ⓒ Hakuhodo DY Holdings Inc. All rights reserved.
4
Marketing business
Commerce business
Digital marketing
Integrated marketing
Incubation business Content business Technology business Consulting business Global businessLet me now turn to the progress of our strategy.
We define the three years of the Medium-Term Business Plan, starting in fiscal 2024, as a period to increase profitability and create growth options by taking enhancement measures to reform our business structure, with the three objectives shown on this slide.
Restructuring of marketing business: Progress
Domestic marketing business maintained positive growth.
The operating margin before amortization of goodwill exceed the target level for FY2026.
Gross profit in the domestic digital marketing domain achieved growth above the market average, starting with Hakuhodo DY ONE.
Monitoring indicators (for FY2026)
Full-year result for FY2024 *1
CAGR of gross profit
in domestic marketing business*2
Operating margin before amortization of goodwill
in domestic marketing business
CAGR of gross profit
in domestic digital marketing*2
Ⓒ Hakuhodo DY Holdings Inc. All rights reserved.
*1 To ensure appropriate understanding of our actual business performance, we periodically review and revise our methods, as necessary. When such revisions are expected to have a significant impact, we will retrospectively adjust and disclose figures from prior periods as needed.
*2 Base year: FY2023
5
+6.8%
Growth above market average
At least +6%
(Our estimation)
18.2%
At least 15%
+2.4%
Approx. +4%
Here is the progress toward the first objective, which is restructuring the marketing business.
Gross profit in the domestic marketing business, the mainstay of our business in terms of volume, failed to reach the target but managed to maintain positive growth.
The operating margin before amortization of goodwill exceeded the target level for fiscal 2026, thanks to improved profitability in digital marketing, among others.
Gross profit in domestic digital marketing achieved higher growth than the market average, led by Hakuhodo DY ONE, our digital core.