Macromill : FY6/2023 Full Year Results, Mid-term Business Plan, and FY6/2024 Guidance Briefing Transcript by Script Asia

Macromill, Inc.

FY6/2023 Full Year Results, Mid-term Business Plan, and FY6/2024 Guidance Briefing

August 14, 2023

Event Summary

[Company Name]	Macromill, Inc.
[Company ID]	3978-QCODE
[Event Language]	JPN
[Event Type]	Earnings Announcement
[Event Name]	FY6/2023 Full Year Results, Mid-term Business Plan, and FY6/2024 Guidance
	Briefing
[Fiscal Period]	FY2023 Q4
[Date]	August 14, 2023
[Number of Pages]	35
[Time]	15:00 - 15:43
	(Total: 43 minutes, Presentation: 43 minutes)
[Venue]	Webcast
[Venue Size]
[Participants]
[Number of Speakers]	2
	Toru Sasaki	Executive Officer, Global CEO
	Shintaro Hashimoto	Executive Officer, Global CFO

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Japan	050.5212.7790	North America	1.800.674.8375
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Presentation

Sasaki: Thank you for joining us. I am Sasaki, Representative Executive Officer and Global CEO. Today's agenda consists of five items. I will start with a summary of Q4 and full-year financial results, followed by our CFO, Hashimoto-san's presentation of the financial information for the same period. After that, I will review the current mid-term business plan and explain the new mid-term business plan. Finally, I will explain the guidance for the current fiscal year.

Please turn to page three. As announced in the previous earnings presentation, the sale of other overseas business to Toluna has been completed, and it has been deconsolidated as a discontinued operation. Based on this assumption, Q4 revenue was JPY8.91 billion, up 6% YoY. Excluding M&A expenses, adjusted operating profit was JPY0.1 billion, up JPY0.52 billion from last year when the Company was in debt. Profitability improved as most of the amount and margin of total employee expenses and outsourcing expenses were controlled below last year's levels, while revenue increased. Full-year revenue was JPY40.61 billion, up 8% YoY. Operating profit was JPY4.96 billion, down 5% YoY. Gross revenue and operating profit exceeded the revised forecast due to a Q4 stronger than expected in the revised forecast announced at the previous earnings announcement.

We will pay a year-end dividend of JPY11 per share for a total of JPY21 per share for the full year as planned. The current year is the final year of the mid-term business plan. However, due to changes in assumptions, such as the sale of other overseas business, the new mid-term business plan was formulated one year earlier than the initial schedule.

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For the fiscal year ending June 2024, we forecast an 8% increase in revenue, a 13% increase in adjusted operating profit and JPY4 per share increase in the dividend to JPY25. We are aware that the fact that we were able to exceed revised forecast despite the difficult Q3 is a positive factor for the future. That concludes my summary.

I will now hand over the baton to Hashimoto-san to present financial information for the last fiscal year.

Hashimoto: Thank you, Sasaki-san.

I will now present the full-year financial information for FY2023. Please refer to page five.

Full year revenue was JPY40.6 billion, up 8% YoY, excluding the previous year's figure by about JPY3 billion. This actual revenue exceeded the revised guidance in May of JPY40.5 billion by about JPY100 million. Excluding expenses related to the sale of other overseas business, the decline in adjusted operating profit was reduced to minus 3% YoY, resulting in just under JPY5 billion, also exceeding the revised forecast due to improved profitability on a full-year basis.

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Page six shows the breakdown of operating expenses.

Total operating expenses on an adjusted basis for the full year were JPY35.6 billion, up 9% YoY. Total employee expenses increased 8% YoY. The expenses were kept below the rate of sales growth in H2, bringing the full year increased down to the same level as sales growth. Outsourcing expenses increased 12% YoY. These expenses are also better controlled as in the case for total employee expenses. The rate of increase for the full year was still higher than the rate of sales growth. However, we have been able to control outsourcing expenses by increasing the ratio of in-house research capabilities by reducing the turnover research directors and improving the skill level of talent. Therefore, we believe that expenses will keep the current trend and be controlled below the sales growth rate from FY2024 and beyond. Other expenses increased 22% YoY. Almost half of the increase was accounted for by expense related to the sale of other overseas business amounting to JPY0.46 billion, which is in line with our forecast.

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Japan	050.5212.7790	North America	1.800.674.8375
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