Carta : Financial Results for the Fiscal Year Ending December 31, 2021 (Consolidated)

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.

Financial Results for the Fiscal Year Ending December 31, 2021 〔Japanese Standards〕（Consolidated）

Listed company name:	CARTA HOLDINGS, Inc.
Stock Code No.:	3688		URL:
Representative:	Title	Chairman	Name:
Contact:	Title	Director and CFO	Name:

Scheduled date of Annual General Meeting of Shareholders: Scheduled starting date of dividend payments:

Scheduled date to file Securities Report: Availability of supplementary information Holding investors' meeting:

	Feb 14, 2022
Listed stock exchange:	TSE first section
https://cartaholdings.co.jp/en/ir/
Shinsuke Usami
Hidenori Nagaoka	TEL [phone]

Mar 26, 2022

Mar 14, 2022

Mar 28, 2022

Yes

Yes

(For security analysts and institutional investors）

（Rounded down to million yen）

1. Consolidated Financial Results for fiscal year ended December 31, 2021 (January 1, 2021 - December 31, 2021)

(1)Consolidated results of operations (cumulative total)								（The percentage indicates year-on-year change）
	Net sales			Operating income		Ordinary income	Net income
	¥million			％		¥million			％			¥million			％	¥million	％
Year ended December 31, 2021	25,821			14.8		4,973		43.6		5,614			68.3	3,104	74.3
Year ended December 31, 2020	22,487			―		3,463			―		3,355			―	1,781	―
（Note）Comprehensive Income:	Year ended December 31, 2021: ¥4,113 million 152.8％
	Year ended December 31, 2020: ¥1,627 million ―％
	Net income		Diluted net							Return on	Ordinary	Operating
		income per			EBITDA			income to	income to
	per share						equity
		share							total assets	net sales
	¥			¥		¥million		%		%		%		%
Year ended December 31, 2021	122.68			121.32		6,703		48.1		12.0		10.7		19.3
Year ended December 31, 2020	70.57			70.21		4,527			―		7.5		6.7		15.4
（Reference）Equity in net losses of affiliated companies:			Year ended December 31, 2021: ¥(27) million
							Year ended December 31, 2020: ¥(44) million

(Note) The fiscal year ended December 31, 2019 was a transitional period for the change in accounting period and was an irregular accounting period that covered 15 months (October 1, 2018 to December 31, 2019). Consequently, the periods to be compared differ, and as such, the year-on-year change rate for the fiscal year ended December 31, 2020 is not stated.

• EBITDA noted above (earnings before interest, tax, depreciation, and amortization) is calculated by adding interest expenses, depreciation, amortization, amortization of goodwill, loss on retirement of non-current assets, and impairment loss to the Company's profit before income taxes. The definition of EBITDA has been changed to include loss on retirement of non-current assets and impairment loss from FY2021 in order to improve the effectiveness of the indicator. Based on the previous definition, EBITDA for the fiscal year ended December 31, 2020, would be ¥4,131 million.

(2) Consolidated financial position

	Total assets	Net assets	Shareholders'	Net assets
	equity ratio	per share
		¥million	¥million	％	Yen
December 31, 2021		55,376	27,757	49.6	1,070.34
December 31, 2020		49,259	24,553	49.5	967.47
（Reference）Owned capital: December 31, 2021	¥27,444 million
December 31, 2020	¥24,376 million

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(3) Consolidated cash flows

	Net cash flows	Net cash flows	Net cash flows	Cash and cash
	from (used in)	from (used in)	from (used in)	equivalents at the
	operating activities	investing activities	financing activities	end of the year
	¥million	¥million	¥million	¥million
Year ended December 31, 2021	7,102	(765)	(1,215)	21,031
Year ended December 31, 2020	2,013	66	(892)	15,600

2.	Dividend status
				Annual dividends			Total amount of	Payout ratio	Dividend-to-net
					Fiscal		asset ratio
		１Qend	２Qend	３Qend	Total	dividends(total)	(consolidated)
		year-end	(consolidated)
		Yen	Yen	Yen	Yen	Yen	¥million	％	％
FY 2020	―	8.00	―	40.00	48.00	1,209	68.0	5.1
FY 2021	―	25.00	―	26.00	51.00	1,299	41.6	5.0
FY 2022 (Forecast)	―	27.00	―	27.00	54.00		28.9

3. Forecast of Consolidated Financial Results for FY 2021（January 1, 2022 － December 31, 2022）

Net sales

Operating

Ordinary

Net income

Net income

EBITDA

income

income

per share

¥million

％

¥million

％

¥million

％

¥million

％

Yen

¥million

%

Full year

28,300

9.6

5,500

10.6

5,900

5.1

4,100

32.1

159.90

7,600

13.4

(Note) The forecast of consolidated financial results for the six months ending June 30, 2022 is omitted, as the Company manages its operations on a yearly basis. For details, see "1. Overview of Operating Results, etc. (4) Future Outlook" on page 6 of the attached documents.

Notes

(1) Changes in significant subsidiaries during the period	: Yes
(Change of specified subsidiaries that lead to a change in the scope of consolidation)
New: 1 company (Name) CARTA COMMUNICATIONS Inc.	Excluded from consolidation: ― company (Name) ―

(Note) For details, please see "3. Consolidated Financial Statements (5) Notes to Condensed Consolidated Financial Statements (Changes in Significant Subsidiaries during the Period)" on page 16 of the attached documents.

(2) Changes in accounting policies, changes in accounting estimates, corrections and restatements and retrospective restatements

1) Changes in accounting policy resulting from revisions to accounting standards	: None
2) Changes in accounting policy other than above	: None
3) Changes in accounting estimates	: None
4) Retrospective restatements	: None

1. Number of shares issued (common stock)
2. 1. Number of shares issued and outstanding (including treasury stock)

As of December 31, 2021	25,643,132	As of December 31, 2020	25,496,852
2) Number of treasury stock issued and outstanding
As of December 31, 2021	2,234	As of December 31, 2020	301,018
3) Average number of shares during the period
Year ended December 31, 2021	25,301,804	Year ended December 31, 2020	25,238,995

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(Reference) Summary of Non-Consolidated Financial Results Non-Consolidated Financial Results for fiscal year ended December 31, 2021 (January 1, 2021 － December 31, 2021)

(1) Non-consolidated results of operations

(The percentage indicates year-on-year change)

	Net sales		Operating	Ordinary	Net income
		income	income
	¥million		%	¥million		%	¥million		%	¥million	%
Year ended December 31, 2021	3,167		2.4	2,032		(22.2)	2,075		(21.4)	2,134	(18.9)
Year ended December 31, 2020	3,094		―	2,611			―	2,641		―	2,630	―
	Net income	Diluted net income
	per share		per share
	¥			¥
Year ended December 31, 2021	84.37			83.43
Year ended December 31, 2020	104.23			103.69

(Note) Since the fiscal year ended December 31, 2019 was an irregular accounting period of 15 months due to the change in accounting period, the year-on-year change rate for the year ended December 31, 2020 is omitted.

(2) Non-consolidated financial position

	Total assets	Net assets	Shareholders'	Net assets
	equity ratio	per share
	¥million	¥million	%	Yen
December 31, 2021	25,859	14,935	57.3	577.71
December 31, 2020	19,931	13,711	68.8	543.90
(Reference) Owned capital:	December 31, 2021	¥14,813 million
	December 31, 2020	¥13,704 million

• Notice regarding audit procedures

This financial result is excluded from audit procedures.

• Explanations related to appropriate use of the performance forecast and other special instructions(Note on forward-looking statements)
  Earnings forecasts and other forward-looking statements in this report are based on information currently available and certain assumptions judged to be reasonable. Therefore, these statements do not constitute a guarantee of achievement. Actual results may differ materially for various reasons.
  Please refer to "1. Overview of Operating Results, etc. (4) Future Outlook" on page 6 of the attached documents.
  (Supplementary materials)
  Supplementary materials on financial results are on our website (in English and Japanese).

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Attachment

Contents

1. Overview of Operating Results, etc.

1. Overview of Operating Results for the Fiscal Year under Review
2. Overview of Financial Position for the Fiscal Year under Review
3. Overview of Cash Flows for the Fiscal Year under Review
4. Future Outlook
5. Basic Policy on Profit Distribution and Dividends for the Current and Next Fiscal Years

1. Basic Stance on the Choice of Accounting Standards
2. Consolidated Financial Statements

1. Consolidated Balance Sheets
2. Consolidated Statements of Income and Consolidated Statements of Comprehensive

Income

(Consolidated Statements of Income)

(Consolidated Statements of Comprehensive Income)

1. Consolidated Statements of Changes in Equity
2. Consolidated Statements of Cash Flows
3. Notes to Condensed Consolidated Financial Statements

(Going Concern Assumption)

(Changes in Significant Subsidiaries during the Period) (Change in the Presentation Method)

(Consolidated Statements of Income) (Segment Information, etc.)

(Per Share Information) (Significant Subsequent Events)

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1. Overview of Operating Results, etc.

(1) Overview of Operating Results for the Fiscal Year under Review

With regard to the online advertising market where the Group operates its mainstay business, according to research by Dentsu Inc., in 2020, despite sluggish consumption and a decrease in advertising placements due to the spread of the novel coronavirus (COVID-19), internet advertising spending recovered faster than other media and reached ¥2,229.0 billion, or an increase of 5.9% year on year.

Performance-based advertising costs amounted to ¥1,455.8 billion, or an increase of 9.7% year on year, due to increased contact opportunities with SNS, EC, and video distribution services as a result of nest-egg demand, and increased demand for operational advertising mainly from large-scale platformers. In addition, costs for digital advertising from the four traditional types of mass media amounted to ¥80.3 billion, or an increase of 12.3% year on year, as the use of operational advertising made further progress.

Under these circumstances, the Group worked to develop its business in the following three segments and has been promoting vertical integration throughout the Group to achieve sustainable growth: 1) the "Partner Sales Business" which sells advertising space and provides solutions mainly through media communication; 2) the "Ad Platform Business" which operates ad distribution platforms; and 3) the "Consumer Business" which operates its owned media and services in the EC, game, and HR fields.

As a result, the Group posted net sales of ¥25,821 million, or an increase of 14.8% year on year, operating income of ¥4,973 million, or an increase of 43.6% year on year, ordinary income of ¥5,614 million, or an increase of 68.3% year on year, and profit attributable to owners of parent of ¥3,104 million, or an increase of 74.3% year on year, in the period under review.

Financial results for each segment were as follows. Sales of each segment include intersegment sales and transfers.

In addition, from the fiscal year under review, some business that was previously included in the "Ad Platform" segment has been reclassified into the "Partner Sales" segment due to organizational restructuring. Therefore, the following year-on-year comparisons are based on figures for the same period of the previous fiscal year that have been reclassified to reflect the new reporting segment classification.

1) Partner Sales Business

The Partner Sales Business sells advertising space and provides solutions mainly through media communication. The Group has been working to acquire new profit sources through initiatives in operational advertising and sales promotion/EC-related services, as well as expanding sales of our own products and solutions, while securing profits from existing businesses through the promotion of better operational efficiency.

As a result, the Partner Sales Business recorded net sales of ¥11,596 million, or an increase of 29.9% year on year, and segment income of ¥2,816 million, or an increase of 98.5% year on year, in the period under review.

2) Ad Platform Business

The Ad Platform Business operates "Zucks", "PORTO", "TELECY", and others as operational advertising platforms, as well as "fluct" as media support services. We worked to improve and expand the functions of each platform and service, and also captured demand from corporate clients, which led to solid performance.

As a result, the Ad Platform Business recorded net sales of ¥7,549 million, or an increase of 6.8% year on year, and segment income of ¥1,844 million, or an increase of 16.0% year on year, in the period under review.

3) Consumer Business

In the Consumer Business, in addition to the operation of its owned media that utilizes points, primarily "EC Navi" and "PeX", the Group is aggressively investing in the EC and HR fields as growth areas in order to create businesses that will be the next pillar in the medium- to long-term.

As a result, the Consumer Business recorded net sales of ¥6,695 million, or an increase of 3.1% year on year, and segment income of ¥312 million, or a decrease of 31.3% year on year, in the period under review.

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