CyberAgent : FY2019 Consolidated Financial Results

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

FY2019 Consolidated Financial Results [Japanese GAAP]

					October 30, 2019
Listed company name: CyberAgent, Inc.				Listed stock exchange: TSE 1st section
Code No.:	4751			URL	https://www.cyberagent.co.jp/ en/
Representative:	President		Susumu Fujita
Inquiries:	Managing Director		Go Nakayama	Tel [phone]
Scheduled date of the Annual General Meeting of Shareholders:	December 13, 2019
Scheduled date of dividend payment start:	December 16, 2019
Scheduled filing date of the Annual Securities Report:	December 20, 2019
Preparation of supplementary references regarding financial results:	Yes
Holding the briefing of financial results:	Yes (For securities analysts and institutional investors)
				(Amounts less than ¥1 million rounded down)

1. Consolidated Financial Results for the Year Ended September 30, 2019 (October 1, 2018 - September 30, 2019)

1. Consolidated Results of Operations

	Net sales		Operating income	Ordinary income	Profit attributable to
		shareholders of parent
	¥ million		%	¥ million	%	¥ million	%	¥ million	%
FY2019	453,611		8.1	30,825	2.2	30,493	6.8	1,694	(65.1)
FY2018	419,512		13.0	30,163	(1.8)	28,565	(0.6)	4,849	20.5

(Note) Comprehensive income FY2019: ¥5,670 million (-50.3%)	FY2018: ¥11,416 million (-21.3%)
	Basic earnings	Diluted earnings			Return on					Operating income
		shareholders'		Return on assets
	per share		per share				margin
				equity
	¥		¥			%		%		%
FY2019	13.45		12.21			2.1		13.5		6.8
FY2018	38.54		36.86			6.0		14.7		7.2
(Reference) Equity in earnings of affiliates FY2019: ¥-605 million			FY 2018: ¥-1,773 million
(2) Consolidated Financial Position
	Total assets		Net assets		Shareholders'		Net assets
			equity ratio			per share
	¥ million			¥ million		%			¥
FY2019	224,876		110,352		35.2			628.36
FY2018	225,484		109,250		36.2			648.10

(Reference) Equity capital: As of September 30, 2019 ¥79,169 million, as of September 30, 2018:¥81,556 million (Note) "Partial Amendments to Accounting Standard for Tax Effect Accounting"(Accounting Standards Board of Japan (ASBJ) Statement No.28, February 16, 2018) has been applied from the beginning of this fiscal year.

These figures include the effect of retrospective application for the previous fiscal year.

(3) Consolidated Cash Flows

	Cash flow from			Cash flow from	Cash flow from	Cash and cash
			equivalents at the end
	operating activities			investing activities	financing activities
				of the period
		¥ million			¥million		¥ million			¥ million
FY2019		14,917			(18,000)		(4,662)		84,563
FY2018		28,394			(22,410)		39,748		92,379
2. Dividends
		Dividends per share			Amount of	Dividend ratio		Dividend on
									dividends		equity
	1Q	2Q		3Q	Year-	Annual		(Consolidated)
			(Total)		(Consolidated)
		End
	¥	¥		¥	¥	¥		¥ million		%		%
FY 2018	－	0.00		－	32.00	32.00		4,026		83.0		5.0
FY 2019	－	0.00		－	33.00	33.00		4,157		245.2		5.2
FY 2020	－	0.00		－	33.00	33.00				－
(forecast)

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

3. Forecast of the Consolidated Results for the Fiscal Year Ending September 30, 2020 (October 1, 2019 - September 30, 2020)

(% = Year-on-Year Change)

								Profit attributable to	Basic
	Net sales		Operating income	Ordinary income	shareholders of	earnings per
								parent	share
	¥ million		%	¥ million	%	¥ million	%	¥ million	%	¥
Full year	465,000		2.5	28,000	(9.2)	28,000	(8.2)	8,000	372.1	63.49
	~32,000	~3.8	~32,000	~4.9	~10,000	~490.1	~79.36

(Note) Consolidated earnings forecasts for the fiscal year ending September 30, 2020 is disclosed as range of estimates. For details, please see "(4) Forecast" under "1. Results of Operations" on page 3.

* Notes

(1) Changes in Significant Subsidiaries during the Period: Yes

(Changes in specified subsidiaries due to changes in the scope of consolidation) New : 1 company(Zelvia Co., Ltd)

Excluded : －

1. Changes in accounting policies, changes in accounting estimates, restatements
2. 1. Changes associated with revisions of accounting standards: None
   2. Changes other than those included in i) : None
   3. Changes in accounting estimates: None
   4. Restatements: None
3. Number of shares issued (common stock)

1. Number of shares issued and outstanding at end of period (including treasury stock)

FY2019: 126,426,600	FY2018: 126,426,600

(2) Number of shares of treasury stock issued and outstanding at end of period

FY2019: 434,142	FY2018: 587,542

(3) Average number of shares during the period (cumulative period)

FY2019: 125,938,289				FY2018: 125,806,863
(Reference)
Non-consolidated Results for the Fiscal Year Ended September 30, 2019
(October 1, 2018 - September 30, 2019)
(1) Non-consolidated Results of Operations
												(% = Year-on-Year Change)
	Net sales	Operating income		Ordinary income		Net income
	¥ million	%		¥ million	%		¥ million	%		¥ million	%
FY2019	245,910	7.7		14,698	1.9			23,765	-6.3		16,131	4.0
FY2018	228,248	18.7		14,420	14.6			25,361	44.7		15,514	42.3
	Basic earnings per	Diluted earnings
	share	per share
		¥			¥
FY2019		128.08				120.88
FY2018		123.32				118.66
(2) Non-consolidated Financial Position
	Total assets		Net assets		Shareholders'		Net assets
			equity ratio		per share
		¥ million			¥ million			%			¥
FY2019		164,337				89,029				53.6		699.30
FY2018		154,084				75,755				48.5		594.18

(Reference) Equity capital: As of September 30, 2019: ¥88,107 million, as of September 30, 2018: ¥74,771 million (Note) "Partial Amendments to Accounting Standard for Tax Effect Accounting"(Accounting Standards Board of Japan (ASBJ) Statement No.28, February 16, 2018) has been applied from the beginning of this fiscal year.

These figures include the effect of retrospective application for the previous fiscal year

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

• The Consolidated Financial Results is not subject to audit by independent auditors.
• Appropriate Use of Earnings Forecast and Other Matters

This forecast of performance is based on our expectations and assumptions as of the date the forecast was made. Our actual results could differ materially from those listed in this forecast because of various risks and uncertainties. For information related to the forecast indicated above, please refer to "1. Results of Operations (4) Forecast" on page 3.

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

Table of Contents

1. Results of Operations...............................................................................................................................................	2
(1)	Overview of Consolidated Financial Results........................................................................................................	2
(2)	Overview of Consolidated Financial Position.......................................................................................................	3
(3)	Overview of Consolidated Cash Flow..................................................................................................................	3
(4)	Forecast...............................................................................................................................................................	3
2. Basic Policy for the Selection of Accounting Standards ............................................................................................	3
3. Consolidated Financial Statements and Key Notes ..................................................................................................	4
(1)	Consolidated Balance Sheets. .............................................................................................................................	4
(2)	Consolidated Statements of Income and Consolidated Statements of Comprehensive Income. ........................	6
(3)	Consolidated Statements of Changes in Shareholders' Equity ...........................................................................	8
(4)	Consolidated Statements of Cash Flows. ...........................................................................................................	10
(5)	Notes to Consolidated Financial Statements. .....................................................................................................	11
	(Notes Regarding the Going Concern Assumption) .............................................................................................	11
	(Changes in Presentation Method) .......................................................................................................................	11
	(Segment Information) .........................................................................................................................................	12
	(Information on Value per Share) ..........................................................................................................................	16
	(Significant Subsequent Events) ...........................................................................................................................	16

1

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

1. Results of Operations

(1) Overview of Results of Operations

The scale of the video ad market focusing on smartphones is estimated to increase steadily by 25.4% to 231.2 billion yen in 2019, and will reach 495.7 billion yen by 2024 (Note).

Seizing on this trend, the CyberAgent Group has taken advantage of the growth of the smartphone market. At the same time, the group has increased up-front investments in the video business, such as "AbemaTV" continuously from the previous year, to grow it in the medium to long-term mainstay.

As a result, during this consolidated fiscal year, net sales grew 8.1% year on year to ¥453,611 million, and operating income amounted to ¥30,825 million (2.2% increase). Ordinary income amounted to ¥30,493 million (6.8% increase), and profit attributable to shareholders of parent decreased 65.1% to ¥1,694 million.

(Note) Source: CyberAgent/ Digital Infact, The Survey on Japanese video advertising market trends Earnings by business segment are discussed below.

(a) Media Business

The Media Business includes "AbemaTV", "Ameba" and "Tapple", etc. While continuing the up-front investment for "Abema TV" from the previous fiscal year, net sales grew and amounted to ¥37,304 million for the period, a 18.5% year-on-year increase. Operating loss amounted to ¥17,838 million, compared to operating loss of ¥17,764 million for the same period in the prior fiscal year.

(b) Game Business

The Game Business includes Cygames, Inc., Sumzap, Inc., Craft Egg, Inc., etc.

Major existing titles remained strong, it reported net sales amounting to ¥152,224 million, a 3.9% year-on-year increase. Operating income increased 2.9% to ¥26,040 million.

(c) Internet Advertisement Business

The Group's Internet Advertisement Business includes Internet Advertising Division, and CyberZ, Inc., etc. Focusing on developing new advertisers, this segment recorded ¥260,212 million in net sales, up 7.8% year on

year. Operating income lost 3.4%, reaching ¥20,609 million.

(d) Investment Development Business

The Investment Development Business consists of the CyberAgent corporate venture capital business and the fund operations of CyberAgent Capital, Inc.

The Investment Development Business recorded net sales of ¥6,428 million, a 50.8% year-on-year increase, and operating income of ¥4,593 million, a 74.6% year-on-year increase compared to the previous fiscal year.

(e) Other Businesses

The Other Businesses segment includes CAM, Inc., Wedding Park, Ltd., Makuake, Inc. and others.

This segment reported net sales of ¥18,947 million, a 7.7% year-on-year increase. Operating income amounted to ¥907 million, a year-on-year decrease of 50.1%.

2