Business Results for 4Q and Full
Fiscal Year September 2017
November 9, 2017

SEPTENI HOLDINGS CO., LTD.
www.septeni-holdings.co.jp/en/
Securities Code: 4293

©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

Index１．Quarterly Consolidated Earnings Overview
２．Internet Marketing Business３．Media Content Business
４．Full Year FY9/17 Review
5.

Policies for FY9/18 and Earnings Estimates for 1H FY9/18

６．Appendix-For FY9/17, Non-core Business (Axel Mark) is excluded from the consolidated results.
Consolidated profits and losses for FY9/16, with which comparisons are made, are corrected
retroactively and presented after being reclassified as those of discontinued businesses.
-Since the start of FY9/16, the IFRS has been applied instead of the J-GAAP, which had been adopted until then.

-Revenue is disclosed as an IFRS-based indicator instead of traditional net sales, which are also disclosed as
reference information on a voluntary basis. Revenue from the Advertising Agency Sales, which accounts for the
majority of the Internet Marketing Business, shows only the posted net margins.
-Non-GAAP operating profit is disclosed on a voluntary basis to present actual business conditions more appropriately.
Non-GAAP operating profit refers to the profit indicator used to assess ordinary business conditions after
adjustments are made to IFRS-based operating profit pertaining to temporary factors such as the impairment losses,
and gains or losses on the sales of fixed assets.

-Numbers in this material are rounded to the respective nearest unit.
©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

2

１．Quarterly Consolidated Earnings Overview©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

3

4Q (Jul-Sep) Consolidated Earnings Highlights

Revenue
Consolidated Non-GAAP Operating Profit
results¥3,864mn (Up 9.6% year on year)¥585mn（Down 43.5% year on year）

Increased revenue was secured due to a rise in revenue
in the Media Content Business.

Internet
MarketingBusiness

Media
Content
Business

Revenue¥3,595mn (Up 6.2% year on year)

Non-GAAP Operating Profit ¥1,033mn (Down 22.6% year on year)
Revenue started to pick up again, mainly due to an increasein social and video advertisements.

Revenue¥355mn（Up 81.8% year on year ）Non-GAAP Operating Profit¥-322mn（Down ¥154mn year on year）

The development of the brand advertisement market was underway,
contributing to a rise in revenue.

©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

4Consolidated Income Statement (Jul-Sep)
Revenue, non-GAAP operating profit and profit for the period attributable to ownersof the parent exceeded earnings estimates thanks to efforts focusedon the Internet Marketing Business.

Revenue increased ¥338mn (up 9.6%) year on year to an expansion
in the sales of advertisements in GANMA!.
4Q FY9/17（units：¥mn）

Value

Share

Revenue

3,864

100.0%

Gross profit

3,352

SG&A

4Q FY9/16
YY Change

4Ｑ FY9/17
Estimate

Value

Share

+9.6%

3,526

100.0%

86.7%

+6.1%

3,158

89.6%

―

2,760

71.4%

+30.0%

2,123

60.2%

―

Non-GAAP
Operating profit

585

15.1%

-43.5%

1,036

29.4%

420

Operating profit

585

15.1%

-43.5%

1,036

29.4%

Profit for the period fromcontinuing operations

273

7.1%

-58.8%

663

18.8%

Profit for the period
attributable to ownersof the parent

253

6.6%

-46.8%

477

13.5%

164

【Reference】Net Sales

18,350―+0.9%

18,185―

16,974

3,720――©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

5

Quarterly Consolidated Earnings Trend (by Business Segment),250

Revenues increased in the two businesses year on year, as
well as on quarter on quarter.
Revenue

,750

29.4%

196

,250

Operating margin(relative to revenue）

3,864

3,722

3,586

3,526

33.0%

3,529

289

206

355

28.0%

313

22.7%

23.0%

,750

,250

,750

18.0%

3,385

Non-GAAP
Operating profit

1,036

3,521

3,434

528

815

,250

14.2%

3,595

15.1%

3,283

13.0%

11.2%

585

396
750

1,335

8.0%

1,264

1,166

1,033

792
250

-168
-131

-250

16/4Q

3.0%

-219
-586

-132

17/1Q

17/2Q

-750

4Q

1Q

Internet Marketing

2Q

-150

Media Content

-294

-322

-102

-126

17/3Q

17/4Q

-2.0%

3Q

4Q

Adjustment (corporate expenses, etc.) （units：¥mn）*The statement of intersegment revenue elimination is omitted, so the sum of revenues in each business does not match
consolidated revenue (underlined numbers).

©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

6

Quarterly Consolidated SG&A Trend
An advertising expense of ¥317mn was posted to cover promotions,mainly in the Manga Content Business.
2,812

,500

2,123

,000

392

408

549

417

408

248

257

1,605

1,615

17/1Q

17/2Q

317

＋59

258

145

398
110

,500

2,407

2,760

2,672

271

249

1,735

1,777

17/3Q

17/4Q

236

,000

1,379
500

0

16/4Q
Labor costs

Rent expenses, etc.

Advertising expenses

others （units：¥mn）©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

7

２．Internet Marketing Business©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

8

Internet Marketing Business Earnings Overview
Net sales and revenue increased year on year.
Revenue and non-GAAP operating profit exceeded earnings estimates
due to an increase in social and video advertisements.

Other projects, including new ones, increased steadily despite the impactof a decrease in advertising for large-scale projects.
4Q FY9/17（units：¥mn）

Value

Share

Revenue

3,595

100.0%

Gross profit

3,201

SG&A

4Q FY9/16

YY Change

4Q FY9/17
Estimate

Value

Share

+6.2%

3,385

100.0%

3,411

89.0%

+3.4%

3,096

91.5%

―

2,164

60.6%

+22.8%

1,763

52.1%

―

Non-GAAP
Operating profit

1,033

28.3%

-22.6%

1,335

39.4%

904

【Reference】Net Sales

18,413―+1.1%

18,211―©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

9

Internet Marketing Business Quarterly Earnings Trend
Revenue increased quarter on quarter and year on year.
In addition, Operating Margin improved 4.6pt quarter on quarter.
39.4%
40.0%

35.9%

33.9%
3,000

28.7%

30.0%

24.1%
2,000

3,595

3,521

3,434

3,385

20.0%

3,283

1,000

10.0%
1,335

1,166

1,264

792

1,033

0

0.0%

16/4Q

17/1Q
Revenue
収益

17/2Q
Non-GAAP
Non-GAAP営業利益
Operatingprofit

17/3Q

17/4Q

Operating margin (relative
to revenue）（units：¥mn）（単位：百万円）
営業利益率（対収益）©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

10

Internet Marketing Business Profitability on Transactions
The product mix improved, reflecting a decrease in low-margin projects.
The profitability ratio on transactions rose 0.9 points year on year.
20%

対取扱高収益比率
Profitability on Transactions

19.6%

19.5%

19%

18.6%

18.6%

18.6%

16/4Q

17/1Q

17/2Q

18%

17%

17/3Q

17/4Q
©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

11

Internet Marketing Business

Trends in Overseas Revenue

Revenue increased mainly in Asia, primarily driven by the growth of a subsidiaryacquired in 17/1Q and so on.
11.6%
12.1%

Overseas revenue（units:¥bn）

0

12%

Ratio of overseas revenue
0

9.9%
9.2%

9.7%

YonY
+112.7%

0

10%

8%

0

5.4%

0

0

0.31

5.8%

4.2%

0.40
0.32

0.42
6%

0.35

4%
0

0.18

0.14

0.20
2%

0

0

0%

1Q

2Q

3Q
FY2016

4Q

1Q

2Q

3Q

4Q

FY2017※Definition of overseas revenue: the aggregation of revenues from advertising for Japan by foreign clients (Out-In) andadvertising for overseas by foreign clients (Out-Out)©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED. 12

Internet Marketing Business Transactions Trend (by Device)
Both transactions and ratio of smartphone ad reached new record highs.
20
76.1%

PC and others
Smartphone Ad

18

70.7%

Ratio of Smartphone Ad
16

66.1%

（units：¥bn）

58.5%
14

53.6%

5.6

77.4%

79.1%

80.3% 81.3%

71.6%

5.4

75.0%

4.5

4.2

4.2

4.0

3.5
65.0%

3.3

5.1

56.1%

5.4

12

10

68.5%

76.8%

55.0%

6.1
5.8

45.0%

5.8

8

13.6

12.1

6

14.2

14.0

14.3

15.0

15.0
13.5

12.2

10.5
4

6.7

7.5

35.0%

25.0%

8.5
15.0%

2

0

5.0%
4Q
FY9/2014

1Q

2Q

3Q

FY9/2015

4Q

1Q

2Q

3Q

FY9/2016

4Q

1Q

2Q

3Q

4Q

FY9/2017©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

13

Internet Marketing Business Video Advertising Transactions Trend
Transactions increased 58.3% year on year.

3

Video Ad

Share of Internet Marketing Business

14.5%

14.7%

15.5%

（units：¥bn）

16.0%

14.0%

2.5

12.2%

YonY
+58.3％

9.9%

2

12.0%

10.0%

1.5

2.74
5.5%

1.9%

0.34

8.0%

2.47
6.0%

1.80

3.3%
0.5

2.25

4.8%

1

2.85

4.0%

0.91

1.02
2.0%

0.57

0

0.0%
4Q
FY9/2015

1Q

2Q

3Q

FY9/2016

4Q

1Q

2Q

3Q

4Q

FY9/2017©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

14

３．Media Content Business©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

15

Media Content Business Earnings Overview
Advertising revenue increased in the Manga Content Business,reflecting an expansion in the sales of products advertised through GANMA!.
A steady increase in the number of advertisers, mainly brand advertisers,
contributed to an increase in revenue.

4Q FY9/17（units：¥mn）

Value

Share

4Q FY9/16

YY Change

Value

Share

3Q FY9/17
Estimate

Revenue355

100.0%＋81.8%

196

100.0%

383

Gross profit

236

66.3%

+106.4%

114

58.4%

―

SG&A

558

156.9%+97.9%

282

144.1%―

Non-GAAP
Operating profit－322－90.6%（－154）－168－85.8%－359©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

16

Media Content Business Quarterly Earnings Trend
Revenue increased consistently after the large-scale promotion of GANMA!
was implemented in 2Q.
210

355

313

289
206

196
10

-168

-219
-294

-322

-190

-586
-390

-590

16/4Q

17/1Q
Revenue
収益

17/2Q

17/3Q

Non-GAAP Operating profit
Non-GAAP営業利益

17/4Q（units：¥mn）©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

17

Manga Content Business Overview
The number of users increased solidly, mainly among the younger generation,and the media scale and application revenue remained steady.
Monthly page views and accumulated
application downloads of GANMA!
Total number of DL (mn)8Large-scale promotion
was implemented

6

5 Total number of DL:2.3x

The number of monthly PV:
4 2.9x year on year

3

3.32
3.97
0.92

2

3.97
4.81

4.56

4.78

4.56

7.77
6.54
6.54
4.81

2.31

1.35

2.31

1.35

1

0
Jul
0

Oct 2016
2016

Oct
Jan

1500
1450
1400
1350
7.77
1300
8.95 1250
5.0
1200
1150
1100
1050
3.90 1000
950 4.0
900
850
800
750
700 3.0
650
600
550
500
450
2.0
400
350
300
250
200
150 1.0100
500The number of monthly PV (bn)Works with external
copyrights raised the
Total number of DL (mn)numberof PV temporarily.
The number of monthly PV (bn)7

Application Revenue Trend

Jan

Apr
2017
Jul

Apr
2017

Jul

Oct

(

Total revenue of GANMA!
in terms of advertising and in-app billing

1,438

4.5※Volumes in 1Q/2016=100
4
3.5

YonY

Approx. 3.6x

1,024
922

3
2.5
2
510

1.5

403

1
174

198

2Q

3Q

0.5
100
0
1Q

0.0

)

FY9/2016
2016/9期

4Q

1Q

2Q

3Q

4Q

FY9/2017
2017/9期©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

18

Manga Content Business Topics
Current Top 10 rankings of applications used by teens. (as of June.2017)

Selected in 9th position
The user base expanded mainly among the young generation.
MAU ranking of Applications

1st

6 th

2nd

7 th

3 rd

8 th

4 th

9 th

5 th

10 th

Rankings compiled based on data with regard to the total number of MAUs
on iOS/Android among men and women aged 13 to 19.
Data source：App Ape（Fuller, Inc.）※Excluding pre-installed applications and a message application, ”LINE”.
※MAU (Monthly Active Users): The number of active users who start the relevant app at least once a month.
©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

19

４．Full Year FY9/17 Review©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

20

Full Year FY9/17 Consolidated Earnings Highlights

Revenue
Consolidated
results¥14,702mn（Up 6.1% year on year）

Non-GAAP Operating Profit ¥2,325mn (Down 43.9% year on year）※

Revenue reached a new record high for the sixth consecutive year.

Internet
MarketingBusiness

Media
Content
Business

Revenue¥13,833mn (Up 3.2% year on year）

Non-GAAP Operating Profit ¥4,255mn (Down 20.2% year on year）
Increased revenue was secured despite a decline in large-scale projects.

Revenue¥1,163mn（Up 93.5% year on year）

Non-GAAP Operating Profit ¥-1,420mn (Down ¥703mn year on year）
Revenue almost doubled year on year due to the promotion investmentof ¥1.1bn including TV commercials.

*Prior to FY9/14, comparison was made by calculating the numbers equivalent to those in the Japanese standards.
©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

21

Consolidated Income Statement (Full Year)
Revenue and non-GAAP operating profit exceeded earnings estimates.
Increased revenue was secured despite a decrease in non-GAAP operating profit
attributable to active prior investments in GANMA!.
FY9/17（units：¥mn）

Value

Share

Revenue

14,702100.0%

Gross Income

12,989

SG&A

FY9/16

YY Change

FY9/17
Estimate

Value

Share

+6.1%

13,862100.0%

14,558

88.3%

+4.1%

12,47890.0%―

10,652

72.5%+27.6%

8,350

60.2%

―

Non-GAAP
Operating Income

2,325

15.8%

-43.9%

4,147

29.9%

2,159

Operating Income

2,325

15.8%

-44.0%

4,154

30.0%

―

Profit for the period fromcontinuing operations

1,338

9.03%

-51.2%

2,717

19.6%

―

Profit for the period
attributable to ownersof the parent

2,206

15.0%

-12.4%

2,519

18.2%

2,043

【Reference】Net Sales

72,375―-1.1%

73,203―71,000©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

22

Full Year Consolidated Earnings Trend (by Business Segment)
Revenue

13,862
601

Non-GAAP Operating Profit

14,702＋93.5%

5,500

4,147

1,163

2,325
4,000

2,500

5,331

－20.2%

4,255

13,409＋3.2%

13,833
1,000

-500

-718

（-702）-467-510-2,000FY9/2016

FY9/2017

16/通期

17/通期

Internet Marketing

Media Content-1,420FY9/2016
16/通期

17/通期
FY9/2017

Adjustment (corporate expenses, etc.)(units: ¥mn)

©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

23

Internet Marketing Business Full-Year Review
Revenue

Non-GAAP Operating Income

Value（¥mn）

YY Change

Value（¥mn）

YY Change

Operating margin

YY Change

13,833

＋3.2%

4,255

-20.2%

30.8%-9.0ptGlobal（Revenue：¥bn）
Component ratio
to revenue

Smartphone Ad（Net sales:¥bn）

10.7%

60.0

YonY

+76.2%
6.3%

YonY

＋6.9
％
10.0%

50.0

90.0%

10.0

79.5%

73.8%

80.0%

14.2%
Component ratio
to net sales

YonY

8.0
8.0%

2.4x

70.0%
60.0%

40.0

1.48
30.0

6.0%

54.0
4.0%

0.84

Component ratio to net sales

Video Ad（Net sales:¥bn）

6.0

57.7

10.0

5.9%
40.0%

10.3

4.0

30.0%

20.0
2.0%

50.0%

2.0

20.0%
4.3
10.0%

FY20160.0
FY20170.0%

FY20160.0

FY20170.0%
FY2016FY2017©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

24

Media Content Business Full-Year Review
Revenue

Non-GAAP Operating Income

Value(¥mn）

YY Change

Value（¥mn）

YY Change

Operating margin

YY Change

1,163＋93.5%－1,420(－703)--

Monthly page views and accumulated
application downloads of GANMA!

98
7

Total number of DL (mn)

3.9Application Revenue Trend

450

The number of monthly PV (bn)400

Total number of DL:2.3x
The number of monthly PV:
2.9x year on year

350

6

300

5

250

4

1.35

8.95

200

(
4

3

1

50

0.5

0

0

0

Oct.2017

445

2

1

Oct.2016

YonY

2.5

100

3.97

※Volumes in 1Q/2016=100

Approx. 4.5x

1.5

2

)

3.5

150

3

Total revenue of GANMA!
in terms of advertising and in-app billing100
FY2016FY2017©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

25

FY2017 Dividend Policy
The continuous and stable payment of dividends is taken into accountunder the basic policy of appropriate profit distribution in proportion to business expansion.
The payment of dividends has been made at a payout ratio of approximately 15%of the profit for the period attributable to owners of the parent.

Dividends have not been reduced since listing in 2001, and the year-end dividend for
FY9/17 is expected to be the same as the previous year.
Dividend per share(yen)

18.4%

Payout ratio

3.0

18.0%

16.5%

17.0%

2.5

2.0

19.0%

14.6%

14.7%

15.…

16.0%
15.0%

3.2

1.5

2.8

3.2

14.0%

13.0%

1.0

1.8
1.4

12.0%

0.5

11.0%

0.0

10.0%
FY9/13

FY9/14

FY9/15

FY9/16

FY9/17※A 1-for-200 stock split was implemented on October 1, 2013, and a 1-for-5 stock split was implemented on October 1, 2016.
For dividends per share in previous years in the above graph, comparisons are made through the calculation of adjustments for the splits.
©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

26

５．Policies for FY9/18 andEarnings Estimates for 1H FY9/18©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

27

Policies for FY9/18
Expansion the revenue of the Internet Marketing Business steadily, including overseas

Continuing to invest in the Manga Content Business aim to expand media scaleInternet Marketing BusinessMedia Content Business“Improvement of profitability andexpansion of market share”“Expansion of media scale”-

Accelerate growth in the domestic market
again through video ad and sales focused on
the Company’s own media--

Improvement of profitability through theenhancement of the client and the productmix-

Development of markets mainly in Asia

×-

Expansion of the user base throughthe implementation of effective
prior investments

Strengthening of efforts to develop
the brand advertising market

Management base “Strengthening of competiveness through continuous
investments in human resources”-

Starting from October 2017, further efforts will be made to develop human resources andstrengthen competitiveness through the revision of the HR system.

-

Costs are expected to rise due to active investments for the development of human resources,a source of growth, as well as the implementation of performance-linked bonuses.

©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

28

[Reference] External evaluations for the human resources development policy
and the development of human resources

Corporate value improved and sustainable growth was achieved through active investmentsin persons with a good sense of ownership and a strong entrepreneurial spirit.
To maximize the performance of each employee, a unique machine-learning oriented human resource
development engine was created and managed based on a huge amount of accumulated data of humanresources.

“Great Place to Work (in Japan)” rankings(surveyed by the Great Place to Work® Institute Japan)

Selected as one of the best companies<for the 6th straight year>

The 2nd HR Technology Awards“The 6th Japan HR Challenge Awards”(Supported by the Ministry of Health, Labour and Welfare,Toyo Keizai, Inc., etc.)

Received an Prize for Encouragement(Supported by the Ministry of Economy, Trade andIndustry, Toyo Keizai, Inc., etc.)

Management System Division, Received an

excellence award＜for the 2nd consecutive year＞©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

29

[Reference] Summary of the revision of the HR system (revised in October 2017)

The HR system will be revised in October 2017 to implement aggressive investments for thedevelopment of human resources, a source of sustainable growth, strengthen competitiveness for midto long-term, and recruit as many capable people as possible. This revision is expected to makeemployees work-ready as soon as possible and contribute to the improvement of business performance.

Examples of efforts
Systemization of recruitment
and development of humanresources

Implementation
schedule

Summary
Recruitment and development utilizing
quantitative information and statistical techniques

Research anddevelopment
commenced in 2012

Replacement of current annual salary by the payment of
fixed pay and new performance-linked bonuses.
(Each employee’s bonus is to be determined depending on the
merit rating.)
NEW

Enhancement ofsalary levels

Previously

Fixed pay

Bonus

October 2017 ~Performancelinked bonus

In and after
Oct. 2017

Fixed pay

Introduction of a flextime
systemEffective work styles without any constraints on time will bepromoted.

October 2016 ~Improvement of
remote work environments

Diverse work styles without any constraints on location will
be realized.

January 2018 ~Engaging in side businesses will be permitted to an approved
extent for the improvement of individual skills.

October 2017 ~

NEW

NEW

Introduction of aside businessapproval scheme©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

30

First half (Oct-Mar) Consolidated Earnings Estimates
The Internet Marketing Business is expected to achieve an increase in revenue due to steady topline growth.
The Media Content Business should see substantially increased revenue, mainly from advertising.
Non-GAAP operating loss of this business is expected to decrease while marketing investment is
continued.
SG&A expenses are expected to increase given an investment in human resources development
designed to deliver medium- and long-term improvements in competitiveness.
Profit for the period attributable to owners of parent is expected to decrease significantly due to the absenceof profit for the period from discontinued operations, which was posted in the same period of the previous
fiscal year due to the sale of the shares of AXEL MARK Inc.
（units：¥mn）

Earnings
in 1H FY9/17

Earnings Estimates for
1H FY9/18

Expected
growth rate

Revenue

7,309

8,000

＋9.5％

Non-GAAP
Operating profit

1,343

1,000

－25.5％【Reference】Profit for the period
from continuing operations

855

-

-

Profit for the period attributable toowners of the parent

1,743

600

－65.6％【Reference】Net Sales

37,26837,500＋0.6％- Starting from FY9/18, we will change the disclosure policy with regard to earnings estimates. While we will continue to see unpredictable factors that
may contribute to fluctuations of market environments, we are better positioned at present to forecast the future outlook to some extent. In
comprehensive consideration of such situations, we have decided to change our disclosure policy on earnings estimates from the previous policy of
disclosing earnings estimates or the next quarter on a quarterly basis to the policy of disclosing earnings estimates every six months.
©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

31

1H(Oct-Mar) FY9/18 Earnings Estimates by Business Segment
Non-GAAP Operating profit

Revenue

Earnings
in 1H FY9/17

Earnings
Estimates for
1H FY9/18

＋6.0％

2,430

2,650

－12.8％

800＋61.6%

-805

－570

＋184

－141

－170

（－29）

-282

－1,080

－140

7,309

8,000

＋9.5%

1,343

1,000

－25.5%

Earnings
in 1H FY9/17

Earnings
Estimates for
1H FY9/18

Internet Marketing
Business

6,955

7,370

Media Content
Business

495

Eliminationor corporate

Total（units：¥mn）

YY
ChangeYY
Change-Regarding the corporate expenses which have been allocated to each segment, we plan to change the policy for not allocatingthem from FY9/18. Reflecting this change, the above values for Non-GAAP operating profit of each segment have been
calculated based on the new policy, under which the expenses are not allotted to the segments, and the results for the same
period of the previous fiscal year have also been corrected retroactively.

Main factors contributing to change in 2Q cumulative total non-GAAP operating profit (year on year)
Personnel expenses
associated with the revision
Advertising expensesof the HR system

＋0.10

1.34

1H FY9/17

Stoppage of TV
commercials that had
been implemented in
FY9/17 in the Manga
Content Business

Othersｰ0.24
Payment ofbonuses linked to
the level of theachievement of
the performancetargets

ｰ0.20

1.00

1H FY9/18(Estimate) ©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

32

Midterm Business Policies（FY9/2017～)

Earnings target

Non-GAAP Operating Income：¥10bn
Basic policies

Expand advertising business globally
Enhance our own media

Invest in what comes after the smartphone©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

33

Midterm Business Policies（FY9/2017～)
Stance of each business

Expand advertising business globally

Internet
MarketingBusiness[Recognition of the environment in the market
for smartphone advertisements]
The domestic market is gradually going to mature.
Strong growth continues globally with an improved ecosystem.
[Domestic market]
By strengthening the position established in the field of smartphones/social media, the share will be expanded and profitability will be increased.
[Overseas market]
Both organic business growth and M&A will be the engine
for subsequent growth.

Enhance our own media
Media
Contents
Business

Development of GANMA! as the company's own medium that constitutes
the primary revenue sources of the group.
By expanding the scale of the company's own media, powerfulsegmental synergy with the Internet marketing business will be
generated.
©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

29

Thank you for your interest!
Contact Information
SEPTENI HOLDINGS CO., LTD.
www.septeni-holdings.co.jp/en/
Corporate Planning, IR Division
TEL: +813-6857-7258 E-mail: ir@septeni-holdings.co.jp

All estimates, opinions and plans provided in this document are based on the best information available at the timeof the creation of this document on November 9, 2017 and we do not guarantee their accuracy. Therefore our actual
results may differ due to various unforeseen risk factors and changes in global economies.

©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

35

6．Appendix©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

36

Company Overview
As of September 30, 2017
Company NameSEPTENI HOLDINGS CO., LTD.

Representative

Representative Director, Group President and Chief Executive Officer
Koki Sato

Headquarters

Sumitomo Fudosan Shinjuku Grand Tower, 8-17-1 Nishishinjuku,
Shinjuku-ku, Tokyo

Securities Code4293 (JASDAQ)

Business Realm

The holding company for a group of companies conducting primarily
Internet-related and other businesses

Established

October 29, 1990

Capitalization¥2,113 million

Shares Issued

138,819,000 shares (Including 10,724,155 treasury shares)

Consolidated
Workforce

1,083 full time employees, 1,306 full time and contracted employees*On the consolidated balance sheet, in addition to the shares stated above, the shares of the Company held by the Board Incentive Plan (BIP)
trust (1,739,200 shares) are treated as treasury stock.
©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

37

Main Group Companies by Business Segment
Holding Company
SEPTENI HOLDINGS CO., LTD

November 9, 2017

Internet Marketing Business
SEPTENI CO., LTD

Internet ad agency/Providing
assistance for overallpromotions on internet

Septeni Asia Pacific Pte. Ltd.

Internet ad agency in Asia andPacific Ocean region

MANGO Inc.

SEM Operation Business

Septeni America, Inc.

Internet ad agency based in
North America region

HighScore, Inc.

Social Media Marketing Support
Business

Septeni Europe Co.,Ltd

Internet ad agency based inEurope region

Septeni Original,Inc.

Planning and development of
web service

SEPTENI China Limited

Internet ad agency based in
China

Septeni Ad Creative,Inc.

Planning and production ofInternet ads creative

SEPTENI TECHNOLOGY CO., LTD.

Web service development

SETPENI CROSSGATE CO., LTD.

Ad Network and Platform
BusinessJNJ INTERACTIVE INC.

Internet ad agency in South
Korea

Tricorn Corporation

CRM Service Business

Lion Digital Global LTD

Internet ad agency based inSoutheast Asia

Media Content Business
COMICSMART INC.

Manga Content Businessgooddo, Inc.

Platform business of social
contribution

ViViVit Inc.

Recruitment platform businessPharmarket, Inc.

Medical platform business

New Business Development
SEPTENI VENTURES Co., Ltd.

©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

38

Business Model for the Internet Marketing BusinessComprehensive marketing support services are implemented through theutilization of the Internet.
The operation of marketing platforms such as cloud-based CRM services andaffiliate networks is undertaken as the Company’s own services, in addition to
the sale of smartphone-based Internet advertising.
Internet Marketing Business
Advertising Agency Sales

Advertising
Sales
Clients

Service
Provision・Design of campaign structure
・Consulting
・Operation of advertisements
・Establishment of creative
content
etc

Advertising
Purchases

Internet Media Advertising

Distribution,
Display

Users
Campaign Implementation,
Operation, Effectiveness Measurement

In-house services
・Cloud-based CRM services
・Affiliate networks

Information Dispatch

・Internet media
etc©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

39

Business Model for the Media Content BusinessIn the Manga Content Business, efforts are being made to nurture and support manga artists
for the purpose of planning and developing the Company’s own intellectual property (IP).
At the same time, GANMA! manga applications, which consist of original products bydedicated artists, are operated as the Company’s own media.
In addition, the business develops platform-type businesses related to “recruitment,” “social
contribution” and “medical services” as a new business born from intrapreneurship.
Media Content Business

Manga Artists
Cultivation
Providing Works

Corporation/
Group/
Medicalinstitutions

Manga Content Business
Management of Manga Artists

Advertising
Sales

Manga content app（GANMA!)

Provision of
information on job
seekers

Recruitment platform business

Activity support

Distribution

Users
Registration of
information

ViViViTSocial contribution platform businessSupport action
on the Internet

gooddoProvision of solutions
for medical
institutions

Medical platform businessPharmarket©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

40

Consolidated Statement of Financial Position
End FY9/17

End FY9/16

Change26,272

26,268+4

Main Changes（units：¥mn）

Current Assets
Non-current
Assets

6,656

3,712

+2,944

Total Assets

32,92929,981+2,948Current Liabilities

13,387

14,191－805

Non-current
Liabilities

4,319

744

+3,575

Total Liabilities

17,705

14,935+2,770Total Capital

15,224

15,046＋178

Total Liabilities andCapital32,92929,981+2,948Goodwill:+1,670
Investments accounted for using theequity method:+1,332

Other Financial liabilities:+3,567

Treasury stock:＋1,206
Changes in ownership interest in
subsidiaries that result in a loss ofcontrol:-641
Posting of net profit:+2,206©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

41

Consolidated Statement of Cash Flows（units：¥mn）

Cash Flows fromOperating Activities

Cash Flows from
Investing Activities

Cash Flows from
Financing Activities

End FY9/17

Main Changes

FY9/16－808

Profit before taxes from continuing operations:＋2,448
Payment of corporate income tax:-2,682
Working Capital:-495

3,209－1,706

Purchase and proceeds from sales ofinvestment securities:+403
Outlays for acquisition of the shares ofsubsidiaries resulting in a loss of control:-1,374

－109

2,457

Cash dividends paid:-415
Treasury Stock:-1,206
Proceeds from long-term loans payable:＋4,792

801

Effect of Exchange Rate
Changes on Cash andCash Equivalents

95

－114

Net Increase (Decrease)in Cash and Equivalents

39

3,786

Cash and Equivalents at
Term End

15,51915,481©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

42

SEPTENI Group Workforce Number Trend（単位：人）

1,163

1200

1000

1012

90
58

1,329

1,306

97
68

93
68

1,164

1,145

17/3Q

17/4Q

1,203
88
60

88
58

800

600

400

1,015

1,055

17/1Q

17/2Q

866

200

0

16/4Q

Internet Marketing BusinessMedia Content BusinessHolding Company*The number of employees at the non-core business (Axel Mark) is excluded, starting retroactively from 16/4Q.
©SEPTENI HOLDINGS CO.,LTD. ALL RIGHTS RESERVED.

43