Summary of Consolidated Financial Statement
for the Fiscal Year Ended September 30, 2017 [IFRS]
November 9, 2017
Listed Market: TSE

SEPTENI HOLDINGS CO., LTD.
Stock Code: 4293 URL: http://www.septeni-holdings.co.jp/en
Representative:
Representative Director, Group President and Chief Executive Officer Koki Sato
Contact Person:
Director, Executive Officer Shintaro Karaki Telephone: +81-3-6857-7258
Anticipated General Annual Shareholder Meeting Date: December 21, 2017
Anticipated Dividend Payment Date:
December 1, 2017
Anticipated Financial Report Filing Date:
December 21, 2017
Supplemental Earnings Presentation Materials:
Available
Earnings Presentation Meeting:
Held for institutional investors, analysts, media(All figures of less than 1 million yen are rounded down to the nearest digit)

1. Consolidated Financial Results for the Fiscal Year Ended September 30, 2017 (From October 1, 2016 to September 30,
2017)(1) Consolidated Earnings(% figures represent year-over-year change)
Revenue

Operating Profit

Million Yen

FY9/17
FY9/16% Million Yen

14,702
13,862

6.1
－

2,248
4,154

Profit before tax% Million Yen

-45.9
－

2,448
4,281

Profit for theperiod attributableto owners of theparentTotal
comprehensive
income%Million Yen%

Million Yen

%

-2.0
-2.1

2,211
2,519

-12.2
7.1

2,636
2,431

8.4
5.3

Profitfor the period% Million Yen

-42.8
－

2,206
2,252

(Note) 1. Non-GAAP operating profit: ¥2,325 million in FY9/17 (-43.9%), ¥4,147 million in FY9/16 (―)
2. Revenue, operating profit, Non-GAAP operating profit and profit before tax are indicated the amount of continuing operations excluded
discontinued operations. Because earnings results of AXEL MARK INC. and its subsidiary are presented after they are reclassified as
discontinued operations. Furthermore, as the earning results of FY2015 is not rearranged, year-over-year change of 2016 is not mentioned.

Diluted earnings per
share

Basic earnings per share
FY9/17
FY9/16

Yen

Yen

17.38
19.43

17.29
19.30

ROE

Revenue
Operating Margin

ROA
%
15.1
19.8

%
7.8
15.4

%
15.3
30.0

Equity attributable toowners of the parent

Ratio of equity
attributable to ownersof the parent to total
assetsEquity attributable toowners of parent per share(2) Consolidated Financial Position
Total Assets

FY9/17
FY9/16

Total Equity

Million Yen

Million Yen

Million Yen%

Yen

32,92929,981

15,224
15,04615,172
14,15646.1
47.2

120.08109.13

Cash flows from (used in)financing activities

Cash and cash equivalents
at end of year

(3) Consolidated Cash Flow Information
Cash flows from (used in)operating activities

FY9/17
FY9/16

Cash flows from (used in)investing activities

Million Yen

Million Yen

Million Yen

Million Yen

-808
3,209

-1,706
-109

2,457
801

15,51915,481

2. Dividend Conditions
Dividends

FY9/16
FY9/17
FY9/18Estimate

Term-end

Total Value of
Dividends(Total)

Total

Dividend on equity
attributable toowners of theparent(Consolidated)

Dividend Payout
Ratio(Consolidated)

End of 1Q

End of 2Q

End of 3Q

Yen

Yen

Yen

Yen

Yen

Million Yen

%

%

―
―

―
―

―
―

16.00
3.20

16.00
3.20

415
410

16.5
18.4

3.3
2.8

―

―

―

―

―

―

(Note) 1. Estimates for dividends in the fiscal year ending September 30, 2018 have yet to be decided.
2. The Company implemented a 5-for-1 stock split for its common stock on October 1, 2016. The figures for the fiscal year ended
September 30, 2016 are stated based on the number of shares before the stock split.

3. Consolidated Financial Results Forecast for the Six Months Ending March 31, 2018 (From October 1, 2017 to March
31, 2018)(% figures represent year-over-year change)
Profit for the period
Non-GAAP Operating profit attributable to owners of the
Basic earnings per shareparentRevenueFirst half

Million Yen%

Million Yen%

Million Yen

%

Yen

8,000

9.5

1,000

-25.5

600

-65.6

4.75

(Note) Instead of full-year earnings estimates, the Company discloses its earnings estimates for the next half year.

* Annotation(1) Important changes in subsidiaries, including changes in the scope of consolidation: None
(2) Changes in accounting methods, procedures, presentation methods
Changes in accounting policies required by IFRSs:
Other changes in accounting methods:
Changes in accounting estimates:(3) Shares issued (common stock)
Shares issued as of term-end (incl. Treasury stock): FY9/17
Treasury stock as of tem-end:
FY9/17
Average number of shares outstanding:
FY9/17

None
None
None

138,819,000 FY9/16
12,463,355 FY9/16
127,193,039 FY9/16

138,641,500
8,924,155
129,661,912

(Reference) Non-Consolidated Earnings Overview
1. Non-Consolidated Earnings for the Fiscal Year Ended September 2017 (October 1, 2016 – September 30, 2017)(1) Non-Consolidated Earnings(% figures represent year-over-year change)
Net Sales
Operating Income
Ordinary Income
Net Income
FY9/17
FY9/16

Million Yen%

Million Yen%

Million Yen%

Million Yen

%

3,800
2,630

44.5
△7.5

2,015
1,023

97.0
△19.9

2,248
964

133.3
△35.9

1,581
1,094

44.6
△46.2

EPS
FY9/17
FY9/16

Fully Diluted EPS
Yen

Yen

12.43
8.44

12.36
8.38

(2) Non-Consolidated Financial Position
Total Assets
Million Yen

FY9/17
FY9/16

Net Assets

Net Asset Ratio

Million Yen

15,562
11,0689,990
10,028Book Value per Share
%

Yen

64.1
90.1

78.90
76.88

(Reference) Capital: ¥9,970 million in FY9/17, ¥9,972 million in FY9/16* Cautionary note about the use of results forecasts and other special notes(1) Stock split
The Company implemented a 5-for-1 stock split for its common stock on October 1, 2016. The shares issued (common stock)were calculated on the assumption that the stock split was implemented at the beginning of the previous fiscal year. BPS, Diluted
earnings per share, Equity attributable to owners of parent per share and shares issued as of term-end are calculated on theassumption that the stock split was implemented at the beginning of the previous fiscal year.

－

1 －Index
1. Overview of Earnings Performance, Etc. ……………………………………………………………………
(1) Earnings Performance Analysis………………………………………………………………………………
(2) Financial Conditions Analysis ………………………………………………………………………………
(3) Basic Policy Regarding the Distribution of Profits, and Dividends in the Current and Next Terms ………
2. Corporate Structure ……………………………………………………………………………………………
3. Basic Stance on the Choice of Accounting Standards …………………………………………………………
4. Consolidated Financial Statements ……………………………………………………………………………
Consolidated Statement of Financial Position …………………………………………………………………
Consolidated Statement of Profit or Loss………………………………………………………………………
Consolidated Statement of Comprehensive Income……………………………………………………………
Consolidated Statement of Changes in Equity …………………………………………………………………
Consolidated cash flow statement………………………………………………………………………………
(Segment information) ……………………………………………………………………………………
(Per-share information) ……………………………………………………………………………………

－

2 －

３
３
５
６
７
８
９
９
11
12
13
14
15
17

1. Overview of Earnings Performance, Etc.
(1) Earnings Performance Analysis(Earnings for the current term)
In 2016, the individual smartphone ownership rate in Japan grew to 56.8% and exceeded 80% among young
people in their 10’s to 30’s, showing that the quantitative expansion is progressing particularly in the young adultsegment. In addition, the time spent on smartphone per owner also increased substantially along with the risingutilization rate of SNS (social networking services), suggesting a marked qualitative change as well (Source: “White
Paper 2017 Information and Communications in Japan” of the Ministry of Internal Affairs and Communications). As
such, the smartphone has become a mainstream device for accessing the Internet, and the market for advertising anddiverse services and content corresponding to this trend is expanding. In addition, the power of social media, led bySNS, is increasing still further, and this is consequently prompting greater demand for marketing support that makes
use of the characteristics of social media.
In this environment, the SEPTENI Group has been focusing on smartphone advertising and strengthening the
production and sales system of video advertising, which shows marked growth even in smartphone advertising. At
the same time, the Group has also been working to expand revenue in Southeast Asia by pressing forward withbusiness expansion overseas.
In addition, to strengthen its competitiveness over the medium to long term, the Group stepped up the recruitment
and cultivation of human resources, taking advantage of its AI-type personnel system centered on machine learning,and made prior investments in expanding the user base of GANMA!, a manga content app in the Media Content
Business.
As a result, revenue increased to ¥14,702 million (up 6.1% year on year), non-GAAP operating profit declined to¥2,325 million (down 43.9% year on year), operating profit fell to ¥2,248 million (down 45.9% year on year) andprofit attributable to owners of parent totaled ¥2,211 million (down 12.2% year on year), with revenue practicallyhitting a record high for the sixth straight fiscal year.
On November 10, 2016, the Company sold some of the holding in AXEL MARK INC. and excluded the company
and its subsidiaries from the scope of consolidation. As a result, profits and losses of the company and its
subsidiaries and profits and losses related to the sales of the shares were separated from continued operations andreclassified into discontinued operations.
Operating results by reporting segment are as follows:(i) Internet Marketing Business
The Internet Marketing Business provides comprehensive marketing support services for companies, using theInternet. The Group sells Internet advertising and operates its own services, including cloud-based CRM services
and marketing platforms such as affiliate networks.
In the fiscal year under review, against a backdrop of the expanding market of Internet advertising, primarily
performance-based advertising for smartphones, the Group expanded its operations by actively conducting sales
activities. Backed by diversifying advertising products and enriched advertising expressions along with theincreasing demand, the ratio of smartphone advertising to sales in this segment remained high. Above all, sales ofvideo advertising, a focus for the Group, grew substantially. Meanwhile, a decline in advertising for certain existinglarge-scale projects had an impact, but revenue in the overseas business remained steady, mainly helped by Lion
Digital Global LTD that engages in the Internet advertising agency business in Southeast Asia and became aconsolidated subsidiary of the Group in October 2016, contributing to the revenue expansion in the Internet
Marketing Business.
Overall, revenue in this segment stood at 13,833 million yen (up 3.2% year on year). Non-GAAP operating profit
was 4,255 million yen (down 20.2%).

－

3 －(ii) Media Content Business
The Manga Content Business engages in the cultivation and support of Manga artists for the purpose of planningand developing the Group’s own intellectual property (IP) and operates GANMA!, a manga content app consisting
mainly of the original works of house artists, as in-house media. In addition, the Media Content Business develops
new businesses born from intrapreneurship, including the recruiting platform business, social contribution platformbusiness, and medical platform business.
In the Manga Content Business, the Group actively made marketing investments including TVCM in the fiscal
year under review to expand the scale of GANMA!, a manga content app. As a result, despite an increase in selling
and administrative expenses, particularly advertising expenses, the number of GANMA! users increased
significantly, and cumulative downloads of the app as of September 30, 2017 stood at 8.59 million, about 2.2 times
the number at the end of the previous fiscal year. In addition, sales of advertising in GANMA! also remained steady,and app revenue centering on advertising revenue increased significantly.
As a result, revenue in this segment came to 1,163 million yen (up 93.5% year on year). The non-GAAP operating
loss was 1,420 million yen (non-GAAP operating loss of 718 million yen in the previous fiscal year).

(Outlook for Next Fiscal Year)(i) Policy
In the fiscal year ending September 30, 2018, the Group aims to increase profitability on a consolidated basis
through the sustainable growth of the Internet Marketing Business, while at the same time continuing to makeeffective investments in the Media Content Business to expand the scale of media.
In the Internet Marketing Business, the Group will increase its growth potential in the Japanese market by
improving profitability through a focus on sales of video advertising and in-house media and efforts to improve theclient mix and the product mix. In overseas markets, the Group aims to expand its share by promoting active market
development mainly in Asia.
In the Media Content Business, the Group will expand the user base of GANMA! to further expand the scale ofmedia by continuously making marketing investments, mainly in online advertising. At the same time, the Groupaims to increase app revenue centered on advertising revenue by further promoting sales of advertising in GANMA!
through the enhanced development of the brand advertising market.
In addition, to strengthen our competitiveness over the medium to long term and make sustainable growth, we will
actively invest in the development of human resources, the source of our growth. We have revised the personnel
system in October 2017 by using the AI-type personnel system centered on machine learning which the Company
has been developing and operating on its own for the purpose of recruiting more excellent human resources to usethem as an operational force early and contribute to earnings. For the fiscal year ending September 30, 2018, we
have factored in an increase in selling and administrative expenses mainly due to the payment of performance-based
bonuses.
(ii) Earnings estimates for the first half
The Company will change its policy on the disclosure of earnings estimates in the fiscal year ending September
30, 2018. In the Internet marketing market, which continues to grow in a rapidly changing environment, the periodof smartphone proliferation has run its course, and sales of advertising through smartphones remain high in the
Company, accounting for more than 80% of its revenue. In this environment, while unpredictable factors that can
produce fluctuations in the market environment still exist, it has become somewhat easier to make future forecasts,in comparison to recent years. Therefore, we will change our policy on the disclosure of earnings estimates fromannouncing earnings estimates for the next quarter to making earnings estimates semiannually.
For the six months of the fiscal year ending September 30, 2018, revenue is expected to increase year on year,
thanks to the solid performance of the Internet Marketing Business. In the Media Content Business, revenue is
expected to increase significantly year on year mainly due to the expansion of advertising revenue, and the operating
loss in this segment on a stand-alone basis is expected to contract, despite continued marketing investments in
GANMA!. However, because we have factored in an increase in selling and administrative expenses, particularly
personnel expenses, due to investments we will make in human resources to strengthen our competitiveness over the
medium to long term, as we mentioned earlier, we anticipate an increase in revenue but a decline in profit on aconsolidated basis.

－

4 －Earnings estimates for the first half of the fiscal year ending September 30, 2018 (from October 1, 2017 to March
31, 2018)
Revenue
8,000 million yen
Non-GAAP operating profit
1,000 million yen
Profit attributable to owners of parent
600 million yen
The estimates above are based on information available at the time of publication of this summary and involve
uncertain factors. Actual results may differ from them for a variety of reasons.

(2) Financial Conditions Analysis
Total assets at the end of the fiscal year under review increased 2,948 million yen from the end of the previous
fiscal year to 32,929 million yen. This was primarily attributable to an increase of 1,670 million yen in goodwill andan increase of 1,332 million yen in investments accounted for using the equity method. The increase in goodwill was
due to the posting of goodwill associated with the acquisition of Lion Digital Global LTD as a result of our acquiring
96.01% of its shares in cash. The increase in investments accounted for using the equity method was mainly due tothe conversion of AXEL MARK INC. and its subsidiaries into equity-method affiliates as a result of their exclusionfrom the scope of consolidation due to the sales of some of the shares in AXEL MARK INC. which the Company
had held.
Total liabilities rose 2,770 million yen, to 17,705 million yen, chiefly due to an increase of 3,567 million yen inother financial liabilities. The increase in other financial liabilities was mainly due to non-current borrowings.
Equity increased 178 million yen, to 15,224 million yen, chiefly reflecting the acquisition of treasury shares of
1,206 million yen (including the Company’s shares acquired by the BIP (Board Incentive Plan) Trust), a decrease of
641 million yen in changes in ownership interests in subsidiaries that result in loss of control and the posting of
profit for the period of 2,206 million yen.
(Cash flows)
Cash and cash equivalents in the fiscal year under review rose 38 million yen from the end of the previous fiscal
year to 15,519 million yen.
The following is a description of the situation and factors of each category of cash flow in the fiscal year underreview.
(i) Cash flows from (used in) operating activities
Cash flows used in operating activities stood at 808 million yen (cash-in of 3,209 million yen in the previous
fiscal year).
This reflected outflows such as income taxes paid of 2,682 million yen and a decrease in working capital of 495
million yen, offsetting inflows such as a profit before tax from continuing operations of 2,448 million yen.
(ii) Cash flows from (used in) investing activities
Cash flows used in investing activities came to 1,706 million yen (cash-out of 109 million yen in the previous
fiscal year).
This result was mainly attributable to a net cash inflow of 403 million yen from the purchase of securities andproceeds from sales of securities (purchase of securities of 246 million yen and proceeds from sales of securities of
649 million yen), while there was an outflow of 1,374 million yen due to the purchase of shares of subsidiaries that
result in acquisition of control.
(iii) Cash flows from (used in) financing activities
Cash flows from financing activities stood at 2,457 million yen (cash-in of 801 million yen in the previous fiscal
year).
This was largely a reflection of outflows due to dividends paid of 415 million yen and the purchase of treasury
shares of 1,206 million yen, as well as a net cash inflow of 4,792 million yen due to non-current borrowings(repayments of non-current borrowings of 208 million yen and proceeds from non-current borrowings of 5,000
million yen).
－

5 －(Reference) Trends in Cash Flow-Related Indicators
FY9/15

FY9/16

FY9/17

Ratio of equity attributable to owners of parent to total assets (%)

44.1

47.2

46.1

Ratio of equity attributable to owners of parent to total assets,market capitalization based (%)

217.2

194.7

118.6

Interest-bearing debt to cash flow ratio (%)

67.3

48.1

－

Interest coverage ratio

433.3

330.0

－

Ratio of equity attributable to owners of parent to total assets: Equity attributable to owners of parent/ Total assets
Ratio of equity attributable to owners of parent to total assets, market capitalization based: Market capitalization/ Total assets
Interest-bearing debt to cash flow ratio: Interest-bearing debt/ Cash flows from operating activities
Interest coverage ratio: Cash flows from operating activities/ Interest payments(Notes) 1. Each number above is calculated from consolidated financial data.
2. The market capitalization is the closing stock price at the end of the fiscal year multiplied by the number of shares
outstanding (excluding treasury stock).
3. The cash flows are cash flows from (used in) operating activities.
4. Interest-bearing debt is all the debt on which interest is paid that is posted in the statement of financial position.
5. The date of transition to IFRS was October 1, 2014. The Company is applying IFRS from the fiscal year ending
September 30, 2016. Data for fiscal years up to the fiscal year ended September 30, 2014 are thus not described.
6. The cash flow to interest-bearing debt ratio and the interest coverage ratio for the fiscal year ended September 30, 2017
are not stated because cash flows from operating activities were negative.

(3) Basic Policy Regarding the Distribution of Profits, and Dividends in the Current and Next Terms
We recognize that returning profits to our shareholders is a key management issue, and will flexibly implement
the policy outlined below regarding the appropriate distribution of profits.
With regard to the distribution of retained earnings, we will consider our consolidated earnings performance ineach fiscal year, the need to fortify our financial position, and the Group business strategies, etc., and distributeprofits to maintain a dividend payout ratio of around 15% based on profit attributable to owners of parent.
Furthermore, we have established a minimum full-year dividend target level of ¥2 per share, and seek to strike abalance between stable dividends and an appropriate level of profit distribution to allow us to grow our earnings. In
addition, we will endeavor to utilize our retained earnings for investments in training personnel, optimizing andreinvigorating our existing businesses, and capturing new business areas that have the potential for high growth andprofitability.
Based on these policies, we expect to pay a ¥3.2 dividend per share during the current fiscal year as a year-end
dividend.
Furthermore, with regard to dividends in the next term, we expect to pay dividends in accordance with the above
mentioned policy, and will announce the specific value for our dividend estimate as soon as we announce earnings
estimates for the full year.

－

6 －2. Corporate Structure
As of September 30, 2017, the SEPTENI Group comprises the holding company SEPTENI HOLDINGS, 33
consolidated subsidiaries, and 11 equity accounting method held affiliates (included one union) and is engaged inInternet marketing, media content.
AXEL MARK INC. and its subsidiaries have been converted to equity-method affiliates because they were excluded
from the scope of consolidation as a result of our selling some of its shares on November 11, 2016.
Below is description of businesses and a breakdown of the companies that belong to each of the Group’s businesssegments.
Business Segment

Internet Marketing BusinessMedia Content BusinessBusiness Description
Internet advertising sales, Web solutions (website
creation, operation, SEO services), marketing
platform operations for ad networks, cloud-based
CRM services, Internet marketing support
services for corporations
The digital media content distribution businesssegment and platform business segment, including
the manga content business, recruitment platformbusiness, social contribution platform business,and medical platform business－

7 －Main Consolidated Subsidiaries

SEPTENI CO., LTD.
Tricorn Corporation

COMICSMART, Inc.

SEPTENI’s Corporate Structure
Capital Participation
Management Leadership,
Supervision

Service, Product
Provision

Internet Marketing Business
Internet Advertising Agency

SEPTENI CO., LTD.
Cloud-based CRM Services

Tricorn Corporation

Media Content Business
Manga content

COMICSMART INC.
Recruitment platform

ViViVit, Inc.

Clients (Companies, Individual Users)

SEPTENI HOLDINGS CO., LTD.

25 other companies

Social contribution platform
gooddo Inc.
Medical platform
Pharmarket Co.,Ltd.
2 other company

3. Basic Stance on the Choice of Accounting Standards
The Group promotes the development of global operations and is applying IFRS from the fiscal year ended September
30, 2016 to improve the quality of business administration through the unification of accounting procedures within theGroup and to improve the convenience of stakeholders, including shareholders and investors in Japan and overseas, byincreasing the international comparability of financial information in capital markets.

－

8 －4. Consolidated Financial Statements(1) Consolidated Statement of Financial Position（Thousand yen）
Previous Term(Ended September 30,2016)

Current Term（Ended September 30, 2017）

AssetsCurrent assets
Cash and cash equivalents

15,480,970

15,519,366

Operating receivables
Inventories
Other financial assets
Other current assets

9,982,708
118,517443,788242,480

9,988,192
9,794
209,252
545,80926,268,463

26,272,413

Total current assets
Non-current assets
Property, plant and equipment

363,519

333,676

Goodwill

147,491

1,817,632

Other non-current assets

232,261
611,991
1,673,251
3,743

169,005
1,943,739
1,657,054
7,024

Deferred tax assets
Total non-current assets
Total assets

680,225
3,712,481
29,980,944

728,192
6,656,322
32,928,735

Intangible assets
Investments accounted for using equity method
Other financial assets－

9 －（Thousand yen）
Previous Term(Ended September 30,2016)

Current Term（Ended September 30, 2017）

Liabilities and Equity
Liabilities
Current liabilities
Operating payables

9,652,601

9,349,155

Other financial liabilities
Current income taxes payable

1,728,525
1,236,846
1,573,264

1,931,391
309,710
1,796,410

14,191,236

13,386,666

Other financial liabilities

654,867

4,018,845

Provisions

Other current liabilities
Total current liabilities
Non-current liabilities

88,454

82,821Other non-current liabilities

518

1,140

Deferred tax liabilities－

215,731

Total non-current liabilities

743,839

4,318,537

14,935,075

17,705,203

2,085,004
3,617,269-485,685
8,815,259
123,875

2,113,611
3,647,815-1,691,818
11,018,315
84,355

Total equity attributable to owners of parent
Non-controlling interests

14,155,722
890,147

15,172,278
51,254

Total equity

15,045,869

15,223,532

29,980,944

32,928,735

Total liabilities
EquityEquity attributable to owners of parent
Share capital
Share premium
Treasury shares
Retained earnings
Other components of equity

Total liabilities and equity－ 10 －

(2) Consolidated Statement of Profit or Loss(Thousand yen)Previous Term(Ended September 30,2015)

Current Term(Ended September 30, 2016)

13,861,870

14,702,191

Continuing operations
Revenue
Cost of sales

1,383,668

1,713,539

Gross profit
Selling, general and administrative expense

12,478,202
8,350,253

12,988,652
10,651,666

46,044

14,949Other income
Other expense

19,547104,127

Operating profit
Finance income

4,154,446
111,387
94,6992,247,808
277,030
113,963

109,755

36,7724,280,889
1,563,685

2,447,647
1,109,365

Profit from continuing operations
Discontinued operations
Profit from discontinued operations

2,717,204

1,338,282-465,195

868,070

Profit2,252,009

2,206,352

Profit attributable to:
Owners of parent
Non-controlling interests

2,519,007-266,998

2,210,604-4,252

2,252,009

2,206,352

20.81
-1.38

10.47
6.91

19.43

17.38

20.68
-1.38

10.42
6.87

19.30

17.29

73,203,044

72,375,144

Finance costs
Share of profit from investments accounted
for using equity method
Profit before tax
Income tax expense

Total
Earnings per share
Basic earnings per share (Yen)Continuing operations
Discontinued operations
Total
Diluted earnings per share (Yen)Continuing operations
Discontinued operations
Total
Net sales
Reconciliation from operating profit to non-GAAP operating profit (Reference)(Thousand yen)Previous Term(Ended September 30,2015)

Current Term(Ended September 30, 2016)

Other income

4,154,446
20,0002,247,808
960

Other expense

12,30577,7044,146,751

2,324,552

Operating profit

Non-GAAP operating profit－ 11 －

(3) Consolidated Statement of Comprehensive Income（Thousand yen）
Previous Term(Ended September 30,2015)

Current Term(Ended September 30, 2016)

2,252,009

2,206,352

298,883

183,719-114,119

258,466-5,511

13,770－1,514

179,253

429,929

Total comprehensive income

2,431,262

2,636,281

Comprehensive income attributable to:
Owners of parent

2,734,220

2,617,876

ProfitOther comprehensive income
Items that will not be reclassified to profit or loss
Net changes in financial assets measured at fairvalue through other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translating foreign
operations
Cash flow hedges
Share of other comprehensive income ofassociates accounted for using equity method
Total other comprehensive income, net of tax

Non-controlling interests-302,958

18,405Comprehensive income

2,431,262

2,636,281－ 12 －

(4) Consolidated Statement of Changes in Equity（Thousand yen）
Equity attributable to owners of parent

Balance at October 1, 2015

SharecapitalSharepremium

TreasurysharesRetainedearnings

Other
componentsof equity

Total

Noncontrollinginterests

Total equity

2,070,160

3,160,951-485,012

6,495,103

65,966

11,307,168

984,604

12,291,772

Profit－－－2,519,007－

2,519,007-266,998

2,252,009

Other comprehensive income

－

－

－

－

215,213215,213-35,960

179,253

Total comprehensive income

－

－

－

2,519,007

215,2132,734,220-302,958

2,431,262

Issue of new shares
Dividends of surplus
Purchase and disposal oftreasury shares
Changes in ownership interestsin subsidiaries that do not resultin loss of control
Changes in ownership interestsin subsidiaries that result in lossof control
Other

14,844－

14,844
－

－

－

－

193

-362,825-29,495－

193－-362,825－-362,825

－

－

-673

－

－

-673

－

-673

－

441,060－－－

441,060

204,114645,174

－

－

－

－

－

－

－

－

－

414

－

163,974-127,809

36,5794,387

40,966

Total amount of transactions
with owners

14,844456,318-673-198,851-157,304

114,334

208,501

322,835

Balance at September 30, 2016

2,085,004

3,617,269-485,685

8,815,259

123,875

14,155,722

890,147

15,045,869（Thousand yen）
Equity attributable to owners of parent

Balance at October 1, 2016

SharecapitalSharepremium

TreasurysharesRetainedearnings

Other
componentsof equity

Total equity

Total

Noncontrollinginterests

2,085,004

3,617,269-485,685

8,815,259

123,875

14,155,722

890,147

15,045,869

Profit－－－2,210,604－

2,210,604-4,252

2,206,352

Other comprehensive income

－

－

－

－

407,272

407,272

22,657429,929

Total comprehensive income

－

－

－

2,210,604

407,272

2,617,876

18,4052,636,281

28,607－28,606
－

－

－

－

1,243

-415,096-55,970
－

1,243

－

-415,096－-415,096－－-1,206,133－－-1,206,133－-1,206,133

－

1,940

－

－

－

1,940

-218,024-216,084

－

－

－

－

-2,873-2,873-638,394-641,267

Issue of new shares
Dividends of surplus
Purchase and disposal oftreasury shares
Changes in ownership interestsin subsidiaries that do not resultin loss of control
Changes in ownership interestsin subsidiaries that result in lossof control
Other

－

－

－

407,548-387,949

19,599-880

18,719Total amount of transactions
with owners

28,60730,546-1,206,133-7,548-446,792-1,601,320-857,298-2,458,618

Balance at September 30, 2017

2,113,611

3,647,815-1,691,818

11,018,315

84,355

15,172,278

51,254

15,223,532－ 13 －

(5) Consolidated cash flow statement（Thousand yen）
Previous Term(Ended September 30,2016)

Current Term(Ended September 30, 2017)

Profit before tax from continuing operations

4,280,889

2,447,647

Profit before tax from discontinued operations
Adjustments:
Depreciation and amortization expense-433,934

1,259,841

221,164

212,985

Impairment loss

176,662

20,179Interest income and dividend income-7,313-4,951

9,863

12,93981,269-36,772－
134,093-1,330,257-238,318-164,672-109,916
449,566
293,739
4,768,872
7,313-9,72339,258-1,596,915
3,208,805-234,428-9,310-382,803
131,361
1,848,113
37,587-11,918－-2,681,912-808,130276,630-196,762-153,148-262,189

648,567-245,790-141,528-23,337－-585,149－-1,374,449

226,332-109,137

16,080-1,705,606-244,068-497,267

700,000
185,906-362,825

5,000,000-208,328-415,096

884,064－－-216,084-2,456-673
12,778800,914-880-1,206,133
1,243
2,457,455-114,119

94,677

3,786,463
11,694,507
15,480,970

38,396
15,480,970
15,519,366

Cash flows from (used in) operating activities

Interest expenses
Share of (profit) loss of entities accounted for using
equity method(Profit) Loss related loss of control
Other
Increase or decrease in working capital
Decrease (increase) in operating receivables
Decrease (increase) in inventories
Increase (decrease) in operating payables
Other
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes refund
Income taxes paid
Cash flows from (used in) operating activities
Cash flows from (used in) investing activities
Proceeds from sales of securities
Purchase of securities
Purchase of property, plant and equipment
Purchase of intangible assets
Payments for sales of investments in subsidiaries
with loss of control (after deducting Cash ofdisposed subsidiary)
Purchase of investments in subsidiaries with loss ofcontrol (after deducting Cash of acquired subsidiary )OtherCash flows from (used in) investing activities
Cash flows from (used in) financing activities
Net increase (decrease) in current borrowings
Proceeds from non-current borrowings
Repayments of non-current borrowings
Cash dividends paid
Proceeds from changes in interests in subsidiaries
without loss of control
Purchases from changes in interests in subsidiaries
without loss of control
Dividends paid to non-controlling interests
Purchase of treasury shares
Other
Cash flows from (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period－ 14 －

(Segment information)
1. Overview of reportable segments
The Group has a holding company structure where the Company is a holding company and its subsidiaries (or theirgroups) are business units. Activities directly related to revenue generation are conducted solely by business units,
which consist of the Company’s subsidiaries (or their groups).
The Group’s reportable segments are based on business segments for which separate financial information isavailable and that the highest decision-maker examines on a regular basis to determine the distribution ofmanagement resources and evaluate the results. In consideration of similarities among the economic characteristics
of each business segment and their quantitative importance and for the purpose of enabling the users of thefinancial statements to appropriately evaluate the Group’s businesses and the economic circumstances for thebusinesses and their effects on the businesses, the Group discloses information on two reportable segments: theInternet Marketing Business and the Media Content Businessi. Internet Marketing Business
The Internet Marketing Business is a single business segment engaging in comprehensive Internet marketing
support services for corporations, including sales of Internet advertising and the operation of marketing
platforms such as cloud-based CRM services and affiliate networks.
ii. Media Content Business
The Media Content Business consists of several business segments, including the manga content business,
recruitment platform business, social contribution platform business, and medical platform business. The Media
Content Business includes business units that have commenced operation in recent years and have not made aprofit due to prior investment for revenue generation. The highest decision-maker makes decisions on the
distribution of management resources to those business units and evaluates their results, assuming risks andeconomic value that allow the Group to recover the investment costs through future revenue generation.
AXEL MARK INC. and its subsidiaries have been converted to equity-method affiliates because they were
excluded from the scope of consolidation as a result of our selling some of its shares on November 11, 2016.
The Non-core Business is operated by AXEL MARK INC. and its subsidiaries as an independent business area.
Because its earnings performance was presented as discontinued operations in the previous fiscal year andduring the period from October 1, 2016 to the date of losing control, the disclosure requirements of IFRS 8(operating segments) do not apply.
2. Measurement of reportable segments’ profits and losses
Segment profit is non-GAAP operating income, which is the sum of operating income in compliance with IFRS andtemporary factors, including impairment losses and gains (losses) on sales of property, plant and equipment.
The Group voluntarily discloses the total amount of all transactions as net sales. The disclosure of net sales is notdisclosure in accordance with IFRS. The management believes, however, that sales are useful information for usersof the financial statements, and voluntarily discloses sales in its consolidated net profit-and-loss statement andsegment information as reference information.
The prices of inter-segment transactions are determined based on the prices of transactions with external customers.

－ 15 －

3. Information on reportable segments’ profits and losses
Previous consolidated fiscal year (from October 1, 2015 to September 30, 2016)（Thousand yen）
Internet Marketing

Media Content

13,408,863

600,835

Segment profit (loss) *5,331,011

Segment sales

73,158,755

Segment revenue

Total

Adjustment

Consolidated

14,009,698△147,828△717,535

4,613,476△466,725

4,146,751

600,835

73,759,590△556,546

73,203,044

13,861,870(Notes) 1. The segment profit is non-GAAP operating profit.
2. Adjustment includes the elimination of profit and loss transactions between reportable segments and expenses for theoperation of the holding company not attributable to reportable segments.
Fiscal Year Ended September 30, 2016 (from October 1, 2016 to September 30, 2017
（Thousand yen）
Internet Marketing

Media Content

Total

Adjustment

Consolidated

Segment revenue

13,833,160

1,162,677

14,995,837-293,646

14,702,191

Segment profit (loss) *4,255,249-1,420,305

2,834,944-510,392

2,324,552

Segment sales

72,548,784

1,162,677

73,711,461-1,336,317

72,375,144(Notes) 1. The segment profit is non-GAAP operating profit.
2. Adjustment includes the elimination of profit and loss transactions between reportable segments and expenses for theoperation of the holding company not attributable to reportable segments.
Reconciliation of segment profit (loss) and profit before tax（Thousand yen）
Previous Term(Ended September 30,2016)

Current Term(Ended September 30, 2017)

Segment profit (non-GAAP operating income)
Other profit (loss) (net)
Financial profit (loss) (net)Share of profit of entities accounted for using equity method

4,146,751
7,695
16,688109,755

2,324,552-76,744
163,067
36,772

Profit before tax

4,280,889

2,447,647－ 16 －

(Per-share information)
The basis of the calculation of earnings per share is shown in the table below.
Previous Term(Ended September 30,2016)

Current Term(Ended September 30, 2017)

Profit attributable to owners of parent (thousand yen)
Continuing operations

2,698,776

1,332,054-179,769

878,550

2,519,007

2,210,604

129,662

127,193

841

695

130,503

127,888

Continuing operations

20.81

10.47

Discontinued operations

-1.38

6.91

Total

19.43

17.38

Diluted earnings per share (yen)Continuing operations
Discontinued operations

20.68
-1.38

10.42
6.87

Total

19.30

17.29

Discontinued operations
Total
Average number of ordinary shares outstanding during the
fiscal year (thousand shares)
Number of potential shares with dilutive effects
Number of warrants (thousand shares)
Average number of shares outstanding in consideration of thenumber of potential shares with dilutive effects (thousand
shares)Basic earnings per share (yen)(Notes) The Company implemented a 5-for-1 stock split for its common stock on October 1, 2016. The shares issued (common stock)were calculated on the assumption that the stock split was implemented at the beginning of the previous fiscal year. BPS and
Diluted earnings per share of the previous fiscal year are calculated on the assumption that the stock split was implemented
at the beginning of the previous fiscal year.

－ 17 －