Kakaku com : Summary of Analyst Meeting for the Second Quarter of the Fiscal Year ending March 31, 2024

F Y 2 0 2 4 / 3 S e c o n d Q u a r t e r

Results Briefing

November 7, 2023

Kakaku.com, Inc. (TSE Prime: 2371)

© 2023 Kakaku.com, Inc.

Hello, this is Hata from Kakaku.com. Thank you very much for participating in today's financial results briefing. I will now provide an overview of H1 of the fiscal year in line with the financial results presentation materials.

1

1. Operating Results (Consolidated/by Business)

2. Progress by Business

3. Topics

4. Appendix

© 2023 Kakaku.com, Inc.

2

2

Consolidated Operating Results

	FY23/3			FY24/3			Forecast	Progress
	Q2	6 months		Q2		6 months
(Unit: million yen)		YoY	YoY
Revenue	14,225	28,240		16,073	+13.0%	31,435	+11.3%	67,700	46.4%
Operating Profit	5,533	10,906		6,128	+10.8	11,299	+3.6	27,100	41.7%
OP Margin	38.9%	38.6%		38.1	-0.8pt	35.9%	-2.7pt	40.0%	-
Profit Before	5,685	11,330		6,219	+9.4%	11,516	+1.6%	26,900	42.8%
Income Taxes
Profit
Attributable to	3,880	8,050		4,265	+9.9%	7,916	-1.7%	18,400	43.0%
Owners of the
Parent Company
*Since FY24/3 Q1, the Company has been applying IAS 12 "Income Taxes" (amended in May 2021). Figures after the retrospective application are used for comparative analysis with FY23/3.
									© 2023 Kakaku.com, Inc. 3

First, please see page three, for an overview of our consolidated operating results. Revenue in Q2 was 16,073 million yen, and 31,435 million yen in the first half.

Operating profit was 6,128 million yen in Q2, and 11,299 million yen in the first half. The OP margin was 38.1% in Q2 and 35.9% in the first half of the year. Profit before income taxes and profit attributable to owners of the parent company are as shown.

Revenue in the first 6 months was up 11.3% from last year, and while Q1 results were slightly lower than planned, Q2 results were up 13%, which put us quite close to our forecast for the first half.

As for operating profit, while Q1 in particular was negative compared to last year, Q2 was up 10.8% and the total for the first 6 months was up 3.6%, so we were able to catch up considerably, although the figures are slightly unsatisfactory.

Although not included in this document, the revenue for the first half forecasted at the beginning of the fiscal year was 31,600 million yen, so we are almost in line with the plan. We had forecasted operating profit of 11,900 million yen, so although we were still slightly behind in Q1, we finally seemed to be getting back on track in Q2.

3

Consolidated Operating Expenses

Mainly advertising expenses and commissions increased year-on-year due to business growth of Tabelog and Kyujin Box. Cost optimization, which has been strengthened since Q2, will continue in the second half of the fiscal year.

(Unit: million yen)						10,241	10,197	10,015
				8,646	8,693	9,311
8,016	7,776	8,398	8,428		2,686	2,253	2,127
		2,137
							Advertising
	1,694		1,839	1,785
1,543	1,482	2,047					Commissions
				2,299	2,456
						2,214
						2,128	Outsourcing
				1,900	1,960
1,661	1,610	1,951	1,735
			1,097	1,124	1,124	Depreciation
813				842	923	910
863	856	916	547	Rent
523	533
464	474	492
492	461	463	456	362	355	346
357	354	356	363		Personnel Expenses
352	351	350
2,656	2,645	2,610		2,802	2,822	2,830	2,763	3,105	3,013	Other
2,573	Server maintenance 17m yen
										Recruiting 94m yen
494	362	473	351	444	374	452	597	513	416
Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2
	FY22/3			FY23/3		FY24/3

© 2023 Kakaku.com, Inc.

4

Next, on page four we have quarterly trends and a breakdown of operating expenses.

At the Q1 results briefing, I explained that expenses were a little high in Q1, but in Q2, although this graph does not seem to show much change, we have considerably optimized our expenses.

First, personnel expenses have not increased. Also, "Others", which is an accumulation of smaller expense items shown in gray at the bottom of the graph, has been reduced by 100 million yen from Q1. Other expenses, such as advertising and commissions, which are increasing in line with the growth of Tabelog and Kyujin Box, were in line with planned expenses, coupled with the increase in sales.

4

Operating Results by Business

	Q2	YoY Change	6 months	YoY Change
(Unit: million yen)	Amount	%	Amount	%
Kakaku.com	4,400	-286	-6.1	8,887	-756	-7.8%
Shopping	1,736	-174	-9.1%	3,574	-450	-11.2%
Service	2,015	+124	+6.6%	4,035	+199	+5.2%
Advertising	650	-235	-26.6%	1,277	-506	-28.4%
Tabelog	6,632	+1,184	+21.7%	13,036	+2,215	+20.5%
Restaurant Promotion	5,829	+1,209	+26.2%	11,510	+2,268	+24.5%
Premium User Memberships	380	+14	+3.7%	754	+19	+2.6%
Advertising	424	-20	-4.6%	773	-31	-3.8%
Kyujin Box*	2,265	+805	+55.2%	4,250	+1,393	+48.8%
New Media and Solutions/Finance*	2,777	+145	+5.5%	5,263	+343	+7.0%
New Media and Solutions	2,112	+205	+10.8%	3,965	+493	+14.2%
Finance	664	-60	-8.3%	1,298	-150	-10.3%

*Since FY24/3 Q1, [Kyujin Box], which was previously included in [New Media and Solutions/Finance] , has been listed separately due to its increased financial impact. YoY figures have been adjusted accordingly.
© 2023 Kakaku.com, Inc.	5

Next, please see page five for business results by business segment.

Kakaku.com was down 6.1% compared to last year, and down 7.8% as a total for the first half, but we believe that it has recovered considerably from Q1.

Sales of Tabelog increased 21.7% compared to the previous year, and the total sales for the first 6 months of the year increased by 20.5%.

Next, Kyujin Box, which is up 55.2% in Q2 compared to last year, continues to perform well, exceeding the plan.

In the new media and solutions/finance segment, sales decreased due to the divesting of consolidated subsidiary gaie in August, but still increased 5.5% compared to the previous year. As for new media and solutions alone, Q2 was plus 10.8%, which was also generally in line with the plan.

Next, I would like to report on the progress by business segment in detail.

5

1. Operating Results (Consolidated/by Business)

2. Progress by Business

3. Topics

4. Appendix

© 2023 Kakaku.com, Inc.

6

6

Progress by Business: Kakaku.com

Revenue in the shopping business and the advertising business declined. In the service business revenue continued to increase.

Kakaku.com: Revenue (Unit: million yen)

				Supply-side issues such as stagnant supply chains and rising manufacturing costs
6,101					5,566
2,356	5,417	5,114	5,320	4,957	4,686	4,960	5,095	4,487	4,400
2,267			2,239
	2,127	2,207	2,113		2,023	2,008
		1,910
					1,838	1,736
2,555	2,153	2,030	1,811	2,266			1,885	2,296
	1,945	1,891		2,015
			2,021
1,191	997	956	1,302	1,061	898	885	1,052	791	628	650
Q2		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2
FY20/3			FY22/3			FY23/3		FY24/3

Shopping

YoY -9.1%

Service

YoY +6.6%

Advertising

YoY -26.6%

© 2023 Kakaku.com, Inc.

7

First, please see page seven on Kakaku.com.

Shopping and advertising remained sluggish, but the service business continued to increase revenues, with shopping sales down 9%, service sales up 6%, and advertising sales down 26% compared to the previous year.

7

Progress by Business: Kakaku.com (Shopping Business)

Revenue in the shopping business declined. Categories for durable goods were affected by fewer new product registrations. Categories for consumables continue to be affected by changes in search rankings that occurred in August of last year.

Shopping: Revenue (Unit: million yen)
				Supply-side issues such as stagnant supply chains and rising manufacturing costs
2,356	2,267	2,127	2,207	2,239
	2,113		2,023	2,008
					1,910
							1,838	1,736
1,699	1,528	1,430	1,479	1,545								Durables
1,474		1,446	1,498				YoY -9.2%
					1,385	1,362
							1,258
													Consumables
													YoY -12.1%
542	626	599	650	622	558	447	502	434	394	393
115	113	98	78	71	81	78	74	76	83	85
Q2		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2
FY20/3			FY22/3			FY23/3		FY24/3

© 2023 Kakaku.com, Inc.

8

Next is page eight, the shopping business.

Durable goods and consumer goods were down 9.2% and 12.1%, respectively, compared to last year, with durable goods affected by the continued weak number of new product registrations during the period.

In addition, consumables continue to be affected by the fluctuations in search rankings that occurred in August of last year.

8

Progress by Business: Kakaku.com (Shopping Business)

 Durables: New Product Registrations

 Traffic sent to shops in major categories (quarterly total)

Digital/Home

Reactionary decline in traffic for Laptops and TVs following the heightened

Appliances

demand during the pandemic

YoY+41.0%

Laptops

Large appliances such as TVs,

TVs

refrigerators and washing

machines, show no change from

the large decrease two years

ago.

Heightened

PCs YoY-14.1%

demand

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Desktop computers and

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

FY21/3

FY22/3

FY23/3

FY24/3

FY20/3

FY21/3

FY22/3

FY23/3

FY24/3

computer parts, such as

memory chips decreased.

 Consumables: Organic Traffic

 Durables: Price comparison for smartphones to

JUL : YoY -38.8%

include information on used smartphones

Fluctuations in

search rankings

AUG : YoY -12.4%

SEP

SEP : YoY -11.0%

Added tab for used price comparison

(information on up to 10 shops)

JUL

AUG

SEP

OCT

NOV

DEC

JAN

FEB

MAR

APR MAY JUN

JUL

AUG SEP

Q2

Q3

Q4

Q1

Q2

Price information for selling smartphones will be added in the second

FY23/3

FY24/3

half of the fiscal year.

© 2023 Kakaku.com, Inc.

9

See page nine for more details.

Compared to last year, the number of new product registrations for durable goods was up 41% for digital and home appliances and down 14.1% for personal computers.

Even though the number of new product registrations for digital and home appliances increased by 41%, there has not been much increase in large appliances such as TVs, washing machines, and refrigerators. Also, many new products often have the same specifications only with different model numbers, and few have new features that would require a lot of advertising. And so, the number of truly new products is still very small.

Then there is the organic traffic for the consumables categories, which in July was minus 38% compared to last year. The organic traffic has been declining sharply since August of last year, and the decline in organic traffic by 12% in August and by 11% in September, indicates that the situation remains weak.

The right side of this page shows the trend in traffic sent from some of Kakaku.com's major categories to e-commerce shops. As you can see, for laptops and TVs, the traffic sent from our site, has slowed down compared to when there was special demand during the pandemic. This indicates that the special demand due to COVID-19 has ended, and demand is returning to normal.

Another topic in durable goods is used smartphones. We have enhanced information on the smartphones' price comparison pages to include price information for used smartphones, which you can easily switch to using the tabs at the top.

9

Progress by Business: Kakaku.com (Service Business)

Service business revenue increased. Revenue in the personal finance domain and the telecommunications domain increased. The automotive domain remained weak. In the "Other" domain, revenue from the moving, electricity and gas price comparison services continued to decline.

Service: Revenue (Unit: million yen)
2,555
	2,153	2,030		2,266				2,296	2,021	2,015
948	1,811		1,945	1,891	1,885
			838
							1,002
	874	833						880
			802				906
			765		814	819
814	473	465		482				503
	362		383	372	399	489	554
				580
592	562	507	468	497	507	473	545
	419	400
		366
200	244	226	216	263	198	194	245	207	181
Q2		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2
FY20/3			FY22/3			FY23/3		FY24/3

Personal Finance

YoY +8.1%

Telecommunications

YoY +49.1%

Automotive

YoY -21.2%

Other

YoY -8.5%

© 2023 Kakaku.com, Inc. 10

Next, on page 10, the service business of Kakaku.com, sales continued to increase due to strong performance in the personal finance and telecommunications domains.

On the other hand, in the automotive domain, the number of new car registrations and the number of used cars in circulation show that the industry itself is still in a state of decline. The personal finance domain increased by 8.1%, telecommunications by 49.1%, and the automotive domain declined by minus 21.2%.

10