May 11, 2018
Company Name: Hakuhodo DY Holdings Inc. Representative: Mr. Hirokazu Toda, President & CEO
(Code number: 2433; TSE First Section)
Inquiries: Mr. Satoru Yagi
Executive Manager, Investor Relations Division
(Tel: +81-3-6441-9033)
Consolidated Financial Highlights for Total of FY2017
Hakuhodo DY Holdings Inc. has summarized key data from its earnings report for fiscal 2017, the year ended March 31, 2018, released today, in the following reference materials.
1. Summary of Consolidated Income Statements (April 1, 2017 to March 31, 2018)
(Millions of yen)
FY2016 (Result) | FY2017 (Result) | YoY Comparison | ||
Change | (%) | |||
Billings | 1,255,474 | 1,335,030 | 79,555 | 6.3% |
Revenue | 248,640 | 272,335 | 23,694 | 9.5% |
(Gross margin) | (19.8%) | (20.4%) | (+0.6%) | |
SG&A expenses | 201,379 | 220,147 | 18,768 | 9.3% |
Operating income | 47,261 | 52,187 | 4,926 | 10.4% |
(Operating margin)* | (19.0%) | (19.2%) | (+0.2%) | |
Non-operating items | (1,769) | 2,176 | 3,945 | -223.0% |
Ordinary income | 45,491 | 54,364 | 8,872 | 19.5% |
Extraordinary items | (531) | (3,735) | (3,203) | |
Income before income taxes and minority interests | 44,959 | 50,628 | 5,669 | 12.6% |
Profit attributable to owners of parent | 25,880 | 29,834 | 3,954 | 15.3% |
* Operating margin = Operating income / Revenue
Dividend per share | ¥24.0 | ¥26.0 | ¥2.0 |
During fiscal 2017 (April 1, 2017 to March 31, 2018), the Japanese economy continued on a clear recovery trend, with exports increasing following an economic recovery overseas and capital investments rising on the back of a high level of corporate earnings. In addition, the Japanese economy was supported by a variety of other factors, such as the positive turnaround in consumer mindset. Meanwhile, the domestic advertising market*1 during fiscal 2017 faced sluggish conditions compared with the overall Japanese economy, with levels in the first half falling below where they were during the first half of the previous fiscal year. Despite a positive turnaround in the third quarter, total growth for the 11 months leading up to February remained at a lower level than it was during the same period of the previous fiscal year.
Amid such an environment, the Hakuhodo DY Group continued its proactive business development in accordance with the Medium-Term Business Plan covering the period through March 2019. As a result, billings for fiscal 2017 rose 6.3% from fiscal 2016, to 1,335,030 million.
By service area, billings declined year on year for Newspapers and Radio. However, solid billings in Television resulted in an overall increase in the four mass media services.
Performance was strong in all areas of other than mass media services, centered on Internet Media and Marketing / Promotion, resulting in a year-on-year increase in billings.
By client industry, billings were up in 18 out of the 21 client industries. The main industries where billing increased were Automobiles / Related products, Transportation / Leisure, and Information / Communications. Meanwhile, the industries where billings decreased were Distribution / Retailing, Beverages / Cigarettes/ Luxury foods, and Precision machinery / Office supplies.*2
Revenue grew 23,694 million, or 9.5%, to 272,335 million, due to the steady expansion of existing businesses and the positive impact of incorporating profits from newly consolidated subsidiaries. Selling, general and administrative (SG&A) expenses rose 9.3% following measures to strengthen the organization through M&A and other strategic investments. As a result, operating income rose 10.4%, to 52,187 million, and ordinary income increased 19.5%, to 54,364 million, representing significant increases for both.
With the additional recording of extraordinary gains totaling 1,709 million and extraordinary losses totaling 5,445 million, income before income taxes and minority interests grew 12.6%, to 50,628 million, and profit attributable to owners of parent increased 15.3%, to 29,834 million.
Notes
1. According to the Survey of Selected Service Industries (Ministry of Economy, Trade and Industry, Japan).
2. Based on internal management categories and data compiled by the Company.
2. Consolidated Balance Sheets as of March 31, 2018
(Millions of yen)
31-Mar-17 | 31-Mar-18 | Comparison with March 31, 2017 | ||||
Amount | Share | Amount | Share | Change | (%) | |
Current assets | 516,183 | 71.5% | 550,856 | 68.9% | 34,673 | 6.7% |
Fixed assets | 205,868 | 28.5% | 249,044 | 31.1% | 43,176 | 21.0% |
Total assets | 722,051 | 100.0% | 799,901 | 100.0% | 77,849 | 10.8% |
Current liabilities | 359,503 | 49.8% | 390,851 | 48.9% | 31,348 | 8.7% |
Non-current liabilities | 36,729 | 5.1% | 41,682 | 5.2% | 4,952 | 13.5% |
Total liabilities | 396,233 | 54.9% | 432,534 | 54.1% | 36,301 | 9.2% |
Total shareholders' equity | 262,922 | 36.4% | 282,439 | 35.3% | 19,517 | 7.4% |
Accumulated other comprehensive income | 41,784 | 5.8% | 60,679 | 7.6% | 18,894 | 45.2% |
Subscription rights to shares | 283 | 0.0% | 454 | 0.0% | 171 | 60.6% |
Noncontrolling interest | 20,828 | 2.9% | 23,793 | 3.0% | 2,965 | 14.2% |
Total net assets | 325,818 | 45.1% | 367,367 | 45.9% | 41,548 | 12.8% |
Total liabilities and net assets | 722,051 | 100.0% | 799,901 | 100.0% | 77,849 | 10.8% |
3. Consolidated Forecasts for Fiscal 2018 (April 1, 2018 to March 31, 2019)
For reference, the consolidated forecast for the fiscal year ending March 31, 2019 is as follows.
(Millions of yen)
1H | 2H | Full-year | |||||||
FY2018 (Forecasts) | Y o Y Comparisons | FY2018 (Forecasts) | Y o Y Comparisons | FY2018 (Forecasts) | Y o Y Comparisons | ||||
Change | (%) | Change | (%) | Change | (%) | ||||
Billings | 669,000 | 58,054 | 9.5% | 791,000 | 66,914 | 9.2% | 1,460,000 | 124,969 | 9.4% |
Revenue | 140,800 | 17,922 | 14.6% | 169,300 | 19,842 | 13.3% | 310,100 | 37,764 | 13.9% |
(Gross margin) | (21.0%) | (+0.9%) | (21.4%) | (+0.8%) | (21.2%) | (+0.8%) | |||
Operating income | 20,700 | 911 | 4.6% | 34,400 | 2,000 | 6.2% | 55,100 | 2,912 | 5.6% |
Ordinary income | 21,600 | 571 | 2.7% | 35,000 | 1,664 | 5.0% | 56,600 | 2,235 | 4.1% |
Profit attributable to owners of parent | 19,600 | 7,651 | 64.0% | 20,600 | 2,713 | 15.2% | 40,200 | 10,365 | 34.7% |
(Operating margin)* | (14.7%) | (-1.4%) | (20.3%) | (-1.4%) | (17.8%) | (-1.4%) |
* Operating margin = Operating income / Revenue
The above forecasts were formulated based on the following projections.
◎ Macro environment: Domestic advertising market to grow roughly 2%
Despite the downward economic impact of geopolitical risks and other factors, the Japanese economy is expected to continue to gradually recover. Against the backdrop of this trend, the domestic advertising market is expected to grow roughly 2% in fiscal 2018.
Although geopolitical risks exist in the same manner as in Japan, growth in overseas markets is expected to outpace the robust Japanese advertising market, particularly in Asia, which is one of the Group's key areas of operation.
◎ Billings: 1,460.0 billion, up 9.4% year on year
◎ Revenue: 310.1 billion, up 13.9% year on year
◎ Gross margin: 21.2%, up 0.8 points year on year
The Group aims to achieve growth above the advertising market average by enhancing its proposal-making capabilities based on the sei-katsu-sha data management platform, a key Group strength. In addition, the Group will reinforce its awareness of profitability as it works to further improve gross margin levels. Overseas, in addition to organic growth, the Group expects that companies acquired through M&A will further expand their business, which in turn will provide a strong boost for overall revenue growth.
◎ Operating income: 55.1 billion, up 5.6% year on year
In terms of SG&A expenses, although the Group strives to make expenditures more efficient, increases in strategic investments to promote the Medium-Term Business Plan and amortization of goodwill related to M&A are expected. Moreover, in April 2018, major Group subsidiaries transitioned their corporate pension scheme from a defined benefit plan to a defined contribution plan. As a result, a temporary increase in retirement benefit expenses is anticipated compared with the previous fiscal year, although this increase will likely stabilize over the medium to long term.
Due to these factors, increases in SG&A expenses are expected to outpace revenue growth. However, as revenue growth is expected to be robust, the Group forecasts record operating income of 55.1 billion, a 5.6% increase year on year, in fiscal 2018.
Also, the Group projects 61.0 billion in operating income before amortization of goodwill in fiscal 2018, the final year of the Medium-Term Business Plan, thereby exceeding the plan's target of 57.0 billion.
◎ Profit attributable to owners of parent: 40.2 billion, up 34.7% year on year
The recording of an extraordinary gain is expected following the transition of corporate pension schemes. As such, the Group forecasts profit attributable to owners of parent of 40.2 billion, up 34.7% year on year.
Based on the Group's fundamental policy of paying a stable dividend, and comprehensively taking into account its business performance and future outlook, the Group intends to increase the ordinary dividend for the year ending March 31, 2019, by 2 per share from the ¥26 per share paid for the year ended March 31, 2018, for a full-year dividend of 28 per share.
(Note)
Forecasts in this press release are based on certain assumptions deemed to be reasonable by the Company at the time of announcement. Actual results may differ materially from these forecasts due to a variety of reasons.
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Hakuhodo DY Holdings Inc. published this content on 11 May 2018 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 11 May 2018 06:32:10 UTC