CorporateVision

To become one of Japan’s preeminentinternet companies

MissionWe embrace challenges in order to create value
and contribute to society.

12AgendaPage

1Financial Highlights of H1 FY03/20

32Performance by Segment in H1 FY03/20

83Forecast

20

4

Appendix26

This presentation contains statements describing future plans, strategies, and performance forecasts of United and its affiliated companies. These statements
reflect forecasts based on management’s assumptions and beliefs using information available as of the date of this presentation. The accuracy of this information
is not guaranteed. Actual performance may differ substantially due to unforeseen circumstances in the operating environment. Company names and productnames are trademarks or registered trademarks of their respective companies.
3

Financial Highlights of H1 FY03/20

Consolidated
OperatingPerformance

Ad TechnologySegment
Game Segment

Sales:¥11,305 million (-40% YoY)
Operating income: ¥2,628 million (-78% YoY)
Excluding the Investment Segment*:
Sales:¥7,101 million (+22% YoY)
Operating loss: ¥1,250 million(¥564 million greater loss than in H1 FY03/19)
Profitability improved, thanks to successful measures to boost the gross margin.
Sales:¥3,177 million (+6% YoY)
Operating income: ¥214 million (+¥247 million YoY)

Inclusion of TriFort as a consolidated subsidiary caused sales to increase, while sluggish
performance of new titles lowered income.
Sales:
Operating loss:¥1,196 million (+50% YoY)¥622 million (-¥701 million YoY)

Up-front investments continued through H1.

Content Segment
Investment
Segment

Sales:
Operating loss:¥2,767 million (+35% YoY)¥329 million (-¥331 million YoY)

We disposed of operating investment securities, including the shares ofCyberBuzz, Inc., which listed in September.
Sales:¥4,204 million (-68% YoY)
Operating income: ¥3,878 million (-70% YoY)
* Total for the Ad Technology, Game, and Content segments, and headquarters expenses and other items
4

Consolidated Sales
Excluding the Investment Segment*1, quarterly sales were up 20% YoY, due mainly to theaddition of consolidated subsidiaries.
(Millions of yen)

15,662+20%YoY,Ad Technology, Game, Content

excluding theInvestment Segment

Investment*2

12,901
6,083
5,221
4,659
3,644
241

3,575513,210

3,402

Q1

Q2

3,254
44

3,969

3,195614

142

3,523

3,355

2,760

3,052

Q3Q4Q1Q2

FY03/18

4,062
10831

4,051

3,828

Q3

Q4

FY03/19

2,637

1,566

3,445

3,655

Q1Q2
FY03/20*1 Total sales for the Ad Technology, Game, and Content segments*2 Due mainly to capital gain from the IPO of Mercari, an investee

5Quarterly Operating Income, by Segment
This corresponds to the “focusing period” of the medium-term management plan, a time topursue concentration in areas of core competence. We are improving on operating losses in theGame and Content segments. From H2, we will step up efforts to identify segments with thepotential for growth and profitability.
12,777(Millions of yen)

1,960
820

799

490
30
156
117
185

179

12,791

219
401

203

2,491

588

169
204

125

1,386

586

108

172

175
150
54
26

(1)
Investment

69(49)(33)

9113
35(555)(28)

108(185)

17(367)Game(154)

Ad Technology

(340)

(437)

Q3
FY03/18

Q4

Q1

Q2

Q3
FY03/19(141)

(175)
(188)

(4)
Q2

119

94

ContentQ1

1,179

Q4

Q1

Q2
FY03/20

Note: Operating income indicates totals for the Ad Technology, Game, and Content segments. Headquarters
expenses and other items are excluded.

6

SG&A expenses rose ¥499 million YoY in line with the addition of consolidated subsidiaries,
owing to higher goodwill amortization (+¥383 million YoY) and HR costs (+¥84 million).
FY03/19 H1(Millions of yen)

Goodwill amortization*2*1*1 Refers to net income attributable to owners of parent*2 Of which, ¥147 million was for TriFort’s software impairment loss and contribution to the payment of obligations (posted in Q1)
7Agenda
Page

1Financial Highlights of 1H FY03/20

32

Performance by Segment in H1 FY03/20

83Forecast

204Appendix

268

Ad Technology Segment: Sales
Sales of app install ads were down QoQ, mainly due to reduced budgets for game ads.
For web ads, sales grew QoQ, thanks to successful efforts to strengthen links between products.
(Millions of yen)

FY03/18

FY03/19

FY03/209Ad Technology Segment: Gross Margin and Operating Income
By strengthening links between products and managing purchases of ad space more thoroughly,
we continued to improve the gross margin, and operating income rose 599% YoY.

Operating Income

Gross Margin(Unit:)(Millions of yen)

+599% YoY

FY03/18

FY03/19

FY03/20

FY03/18

FY03/19

FY03/2010Ad Technology Segment: Strategy
In the short term, we will focus on profitability. In the medium term, we aim to expand earnings byforging alliances with large advertising platforms and developing new products.

Short Term

Apps

Transition to operations that focus
on profitability.

Medium Term

While maintaining profitability in existing
fields, we will forge alliances with large
Shared advertising platforms and cultivate newWeb

Continue with measures toimprove profitability.

fields by developing products that leverage
our existing technologies and expertise.

11

Ad Technology: Topics
We introduced multiple initiatives, including ad distribution and a monetization support service
through an alliance with a large advertising platform.
Began connecting with ByteDance Inc., which
operates the TikTok Audience Network

Began a service to help media monetize theirapp by leveraging Google’s AdMob(July 18, 2019 press release)

Allows ads distributed on TikTok to be
distributed to app media that use adstir viathe TikTok Audience Network(September 25, 2019 press release)

Certified as an operator providing a monetization
support service for app media using AdMob
Service types

Helps boost earnings of media that use adstir

Introduction
supportOperational
supportConsultation on
expandingearnings

About the TikTok Audience Network

About AdMob

This movie ad platform uses behavioral data from users of the TikTok
and BuzzVideo short-movie apps to enable the targeted distribution ofads.

This is an earnings management service for app media provided byGoogle. This service provides optimal ad delivery methods to maximizeadvertising revenue for app media.

12Game Segment: Sales and Operating Income before Goodwill Amortization
United’s game titles generated lower sales due to the reduced operation of Tokyo Conception.
By converting to a contracted development segment, TriFort significantly reduced its losses
QoQ.
+¥252

(Millions of yen)million QoQ+6% QoQ

United’s existing titles

United’s new titles
TriFort (excluding goodwill amortization)

FY03/18

FY03/19

FY03/20

FY03/18

FY03/19

Move into
the black

FY03/20

Note: TriFort’s goodwill amortization totaled ¥164 million in H1 FY03/20.
13

Game Segment: FY03/20 Strategies and Progress through Q2
In light of changes in the market environment, we introduced various measures based on adevelopment and operational policy of minimizing risks.

FY03/20 Strategies(As indicated in Q1 earnings presentation)

Progress through Q2•United••••TriFort

Optimize operating costs of Tokyo Conception
Plan to release one new title in 2019 carefully
selected from development pipeline
Maintain profitability of existing titles

Focus on contracted development byleveraging TriFort’s strong gamedevelopment capabilities•••

Based on Tokyo Conception’s performance,
decided to transfer the segment*
Plan to release one new title in FY03/20
Profitability on existing titles progressing
according to expectations

By transforming the segment to concentrate on
contract development, achieved positive
operating income before goodwill amortization* Transferred business to Spark, Inc. on September 30, 201914

Content Segment: Sales and Operating Income before Goodwill Amortization
We continued making up-front investments through H1. From H2, we plan to acceleratebusiness growth by concentrating our investment of resource on businesses with high growthpotential.

(Millions of yen)

FY03/18(Millions of yen)

FY03/19

FY03/20

FY03/18

FY03/19

FY03/20

Note: Goodwill amortization in the Content segment totaled ¥98 million in H1 FY03/20.
15

Content Segment: KiRAMEX Co.
KiRAMEX has grown since becoming a consolidated subsidiary in April 2016, driven byTechAcademy, an online school for learning programming.
Sales

Number of Students

Business Overview*+400%or more*+1,150%
An online school for learning programming and appdevelopment

Move intothe black•Provides a concentrated, short-term program thatcan be completed entirely online•Going forward, plans to roll out programming
instructional content and operate programming
schools for elementary, junior high, and high school
students, as well
Courses for adults:
Web application courses, web design courses, firsttime programming courses, AI courses, blockchaincourses, others

03/17

03/18

03/19
(09/19

09/16

09/17

09/18

09/19

indicates FY03/20 target)* Indexed to 03/17 = 100 (for sales) and 09/16 = 100 (for number of students)
16

Investment Segment: Sales and Breakdown of Operating Investment Securities
We generated sales of ¥1,566 million through the disposal of shares in CyberBuzz, which listed
in September, and other operating investment securities. As of end-Q2, operating investment
securities totaled ¥28,853 million*1,*2.
Quarterly Sales Trend

Breakdown of Operational Investment Securities

12,901

FY03/18

FY03/19

InvestedCompanies

As at Sep. 2019
(amount on BS)

Listedshares

Mercari, inc.
SOCIALWIRE Co., LTD.
CyberBuzz, Inc.

Approx. ¥24.9 Bn

PrivatesharesMore than
50 companies

Approx. ¥2.1 Bn

Invested
funds as LP

More than
25 funds

Approx. ¥1.7 Bn

FY03/20*1 Of this amount, operating investment securities related to Mercari: ¥24,084 million (5.9% of voting rights held, asof September 30, 2019)17*2 Unlisted shares are valued at investment book value; listed shares are marked to market.

Investment Segment: IPO of CyberBuzz, Inc.

Sale at listingand status ofcontinued
shareholding• Listing on September 19; market capitalization at the time of public
offering was ¥7,869 million.
• Due to the sale of shares at listing, United generated sales of ¥243
million and operating income of ¥145 million*1.

• At the end of H1, United held a 3.9% stake in CyberBuzz, with amarket value of ¥592 million.

Overview of CyberBuzz, Inc.
Results*2

Sales of ¥2,446 million, ordinary income of ¥234 million(results for FY09/18)

Lines ofbusiness

Influencer marketing, social media account operation, agency sales ofadvertising, marketing support leveraging Instagram, others*1 CyberBuzz’s market capitalization at end-H1 was ¥15,020 million.
*2 Source: “Annual Securities Report for New Stock Market Listing Application (Section I)”
18Investment Segment: Investment Portfolio

Major Directly Invested Start-ups

Post IPO

Major Invested Funds as LP

Seed ~ EarlyMiddle ~ Later

19

AgendaPage

1Financial Highlights of H1 FY03/20

32Performance by Segment in H1 FY03/20

83Forecast

20

4Appendix

2620

Source: First Quarter, Fiscal Year Ending
March 2020 Consolidated Financial Results

21Positioning of FY02/20 in the Medium-Term
Management Plan

Source: First Quarter, Fiscal Year Ending
March 2020 Consolidated Financial Results

In the medium-term management plan ending in FY03/22, FY03/20 is positioned as a “focusingperiod” for reaching operating income targets. We are continuing to invest in businesses
identified as likely to grow.

Mercari
Operating income before amortization exluding capital gain related to Mercari0
FY03/19

Proactively prioritize up-front
investment rather thanpursuing short-term profit

FY03/20

FY03/21Significant profit growth
A period when profitable andunprofitable businesses both exist; in multiple businesses
continue to invest in high-growthbusinesses

FY03/22

Aim to maximize profits in eachbusiness and meet targets22

Consolidated Forecast for FY03/20

Business Policy• Select and concentrate the investment of management resources inhigh-growth, highly profitable businesses• Implement drastic measures at unprofitable businesses

Growth businesses involve numerous uncertainties, reasonably
estimating the impact of measures to address unprofitable businesses
is difficult. For this reason, at this point we are not releasing a full-year

consolidating operating performance forecast.

23

Interim Dividend for FY03/20
We have decided on an interim dividend of ¥11, based on our policy of maintaining a
consolidated dividend payout ratio of 20%.

Details of Annual Dividends
FY03/20

FY03/19

InterimYear-end (E)InterimYear-end

Record date

Sep.30, 2019

Mar.31, 2020

Sep.30, 2018

Mar.31, 2019

Dividend per
share
Total annualdividends
Payout ratio(annual)

11 yenNot yet determined

24 yen37 yen245 million yen-552 million yen

852 million yen

20% (E)

20%24

FY03/20: Forecast by Segment

Consolidated

Ad TechnologySegment•Target operating income of ¥5.0 billion or more

•Planning for YoY sales and income growth, excluding theInvestment Segment•Introduce drastic measures targeting unprofitable businesses•

Aim to improve profitability, expect YoY increases in sales andprofit•

Aim to become profitable on a quarterly basis during FY03/20 bymaintaining profitability of existing titles and transforming
TriFort’s business policy•Continue to invest management resources in high-growthbusinesses•Continue to sell operating investment securities and make newinvestments

Game Segment

Content Segment

Investment
Segment

25

AgendaPage

1

Financial Highlights of H1 FY03/20

3

2

Performance by Segment in H1 FY03/20

83

Forecast20

4Appendix

26

26

Source: Medium-term management plan27

Leveraging UEP to Achieve Quantitative Targets

Source: Medium-term management plan

Major strategic priorities:

Enhance new-business creation
Accelerate growth of existing businesses
During the period of the current medium-term management plan, invest
thoroughly in the three priorities mentioned above under the UNITED 2.0
slogan and move to a new growth trajectory28

Refers to net income attributable to owners of parent29

*1 Includes the disposal of operating investment securities in March, April, and September 2019 (+¥4,844 million), operating cash flows other than from thoseindicated at left [excluding income tax payments] (-¥1,205 million), income tax payments (-¥3,711 million), purchases of treasury stock (-¥992 million), year-end
dividend payments (-¥849 million), and the impact of excluding consolidated subsidiaries from the scope of consolidation (-¥309 million).
*2 Impact of marking to market and disposal of listed operating investment securities:
Operating investment securities (-¥10,523 million), deferred tax liabilities (-¥3,184 million), valuation difference on available-for-sale securities (-¥7,216 million)30

*1

Cash Flow from Operating Activities

Cash Flow from Investing Activities*2

Cash Flow from Financing Activities

Cash and Cash Equivalents atEnd of Period*1 Of which, ¥12,892 million from the disposal of operating investment securities through the listing of investees*2 Of which, -¥992 million in payments for the acquisition of treasury stock and -¥849 million for the payment of year-end dividends

31Consolidated Sales and Operating Income in Previous Fiscal Years(Millions of yen)

32

33

Content Segment: Group CompaniesKiRAMEX Co.

Smarprise, Inc.

Operates TechAcademy, whichteaches programming online

Plans and operates media for F2P
game players, as well as VTuberand others

Fogg, inc.

International Sports Marketing Co., Ltd.

Operates CHEERZ, a service tohelp invigorate artists’ activities

Produces sports-related websites
and plans and develops media

ALAN•PRODUCTS, Inc.

TREiS, inc.

Runs multiple media businesses
and develops new businesses

Plans and operates Dream Mail,a sweepstakes and gift site34

FY03/18

FY03/19

FY03/2035