Macromill : Summary of Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending June 30, 2023

(Percentages calculated on year-on-yearbasis.)

Summary of Consolidated Financial Statements for the First Quarter of the

Fiscal Year Ending June 30, 2023 [IFRS]

November 10, 2022

Listed Company:

Stock Exchange:

Code Number:

URL:

Representative:

Contact:

Tel.:

Scheduled date to submit quarterly report: Scheduled date of the start of dividends payment: Supplementary material for quarterly financial results: Briefing on quarterly financial results:

MACROMILL, INC. Tokyo Stock Exchange 3978 https://www.macromill.com

Toru Sasaki, Representative Executive Officer, Global CEO Shintaro Hashimoto, Executive Officer, Global CFO [phone]

November 11, 2022

-

Yes

Yes (for analysts and institutional investors)

(Amounts of less than one million yen are rounded off.)

1. Consolidated Financial Results for the First Quarter of the Fiscal Year Ending June 30, 2023 (from July 1, 2022 to September 30, 2022)

(1) Consolidated Business Performance

		Revenue		Operating profit	Profit before tax	Profit for the period
	Million yen		%	Million yen		%	Million yen	%	Million yen		%
First quarter of the year	12,435		14.2	815		(28.0)	747	(29.3)	364		(44.4)
ending June 30, 2023
First quarter of the year	10,890		19.7	1,131		65.8	1,056	88.4	654		101.1
ended June 30, 2022
	Profit attributable to owners	Total comprehensive	Basic earnings per share	Diluted basic earnings
		of the parent	income for the period		per share
	Million yen		%	Million yen		%		Yen				Yen
First quarter of the year	204		(60.5)	419		(33.9)		5.18			5.13
ending June 30, 2023
First quarter of the year	518		119.7	634		220.1		13.14			13.05
ended June 30, 2022
(Reference)
		EBITDA		EBITDA margin
	Million yen		%			%
First quarter of the year	1,536		(15.7)			12.4
ending June 30, 2023
First quarter of the year	1,823		28.4			16.7
ended June 30, 2022
(2) Consolidated Financial Position
		Total assets		Total equity			Equity attributable to owners	Ratio of equity attributable to
					of the parent	owners of the parent
				Million yen			Million yen		Million yen			%
As of September 30, 2022				82,366			34,703		30,883			37.5
As of June 30, 2022				83,634			35,827		31,704			37.9
2. Dividends
								Dividend per share
		End of 1st quarter	End of 2nd quarter		End of 3rd quarter	Year end			Annual
				Yen		Yen		Yen		Yen			Yen
Year ended June 30, 2022				-	8.00			-		9.00		17.00
Year ending June 30, 2023				-
Year ending June 30, 2023					10.00			-		11.00		21.00
(forecast)
(Note) Revisions from dividends forecasts announced most recently: No

3. Forecast of Consolidated Financial Results for the Year Ending June 30, 2023 (from July 1, 2022 to June 30, 2023)

(Percentages calculated on year-on-year basis.)

	Revenue			Operating profit	Profit before tax	Profit for the year	Profit attributable to	Basic earnings
			owners of the parent	per share
	Million yen		%	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
Full year	56,000		12.4	6,550	12.6	6,350	13.3	4,420	13.5	3,720	18.2	94.03
(Note) Revisions from financial results forecasts announced most recently: No
(Reference)
	EBITDA		EBITDA margin
	Million yen			%			%
Full year	9,550			9.8			17.1

* Notes

1. Changes in significant subsidiaries during the period (changes in specific subsidiaries accompanied by a change in the scope of consolidation): No New: -
   Exclusion: -
2. Changes in accounting policies and changes of accounting assumptions

(i)	Changes in accounting policies as required by IFRS:	No
(ii)	Changes in accounting policies other than (i):	No
(iii) Changes in accounting assumptions:	No

(3) Number of shares outstanding (common stock)
(i) Number of shares issued (including treasury stock) at the end of the term:
As of September 30, 2022	40,480,500 shares	As of June 30, 2022	40,480,500 shares
(ii) Number of shares of treasury stock at the end of the term:
As of September 30, 2022	917,835 shares	As of June 30, 2022	917,835 shares
(iii) Average number of shares during the period:
Three months ended September 30, 2022	39,562,665 shares	Three months ended September 30, 2021	39,459,167 shares

• Summaries of quarterly consolidated financial statements are not subject to audits conducted by certified public accountants or audit firms.
• Note regarding proper use of results forecasts and other special comments

1. The Group applies the International Financial Reporting Standards (hereinafter "IFRS") to and after the fiscal year ended June 30, 2016.
2. The forward-looking statements, such as results forecasts, included in this document are based on information available to the management as of the date of the document and certain assumptions that the management considers reasonable. The Company does not promise that the forecasts will be achieved. Actual results may differ significantly due to a range of factors.
3. EBITDA = operating profit + depreciation and amortization + loss on retirement of non-current assets + impairment loss
4. EBITDA margin = EBITDA / revenue
5. EBITDA and EBITDA margin are not the indicators specified by IFRS, but are the financial indicators that the Group considers useful for investors to evaluate the business results of the Group.
6. EBITDA and EBITDA margin should not be considered as indicators to replace the other indicators shown in accordance with IFRS because they do not include some of the items that affect the profit for the year, so they are subject to significant restrictions as a means of analysis. EBITDA and EBITDA margin disclosed by the Group may be less useful in comparison with the same or similar indicators of other competitors because they are calculated according to a different method from that of such other companies.

Accompanying Materials - Contents
1. Qualitative Information about Consolidated Financial Results for the Quarter ..................................................................................	2
(1)	Overview of operating results for the first quarter..................................................................................................................	2
(2)	Explanations about financial position.....................................................................................................................................	5
(3)	Explanations about forward-looking information including forecast of consolidated financial results ..................................	5

- 1 -

1. Qualitative Information about Consolidated Financial Results for the Quarter

1. Overview of operating results for the first quarter.
   (i) Explanation of the operating environment
   During the first quarter (July 1 to September 30, 2022), restrictions on economic activities due to the Covid-19 pandemic were eased in Japan and globally, and there were signs of recovery in corporate activities. However, the economic outlook remained uncertain due to exchange rate fluctuations, the prolonged war in Ukraine, and rises in raw materials prices, among other factors.

Looking specifically at the insight industry (including marketing research and related sectors), the total global marketplace reached an estimated value of $98.4 billion, with online marketing research accounting for $64.0 billion (*1). In Japan, the size of the overall marketing research sector was 235.7 billion yen, with online marketing research at 79.2 billion yen (*2). Although the global market and the Japanese market were both adversely affected by the Covid-19 pandemic for a period of time, the marketing research sector has returned to a steady growth trend for the medium- to long-term as marketing research shifts even further online amid the pandemic.

In this economic and market environment, the Group disclosed in August 2021 a new MTBP (Mid-term Business Plan) for the three years to the fiscal year ending June 30, 2024. The Group has developed strategies to achieve the Plan's targets and is striving to expand the business scale and profit.

In the fiscal year ending June 30, 2023, the second year of the Mid-term Business Plan, the Company will continue to transform its business model from a "Marketing Research Company" to a "Professional Marketing Services Company". This will support solving all the marketing issues that client companies face beyond marketing research issues as stated in the Vision laid out in our Mid-term Business Plan.

(ii) Explanation of the operating results

An overview of the Group's operating results is as follows (*3):

Consolidated financial results	Three months ended	Three months ended	Increase/decrease	Change %
(Million yen unless otherwise indicated)	September 30, 2021	September 30, 2022
Revenue	10,890	12,435	+1,545	+14.2%
Japan and Korea Business	8,149	8,909	+759	+9.3%
Overseas (ex-Korea) Business	2,781	3,575	+794	+28.6%
EBITDA	1,823	1,536	(286)	(15.7%)
Operating profit	1,131	815	(316)	(28.0%)
Profit before tax	1,056	747	(309)	(29.3%)
Profit attributable to owners of the parent	518	204	(313)	(60.5%)

During the first quarter, revenue amounted to 12,435 million yen (up 14.2％ year-on-year) as the Japan and Korea Business and the Overseas Business (ex-Korea) segments recorded revenue growth. This reflected increased demand for marketing from clients, a continuation of the trend observed in the previous fiscal year. (For an overview of results by segment, refer to "(iii) Explanation of operating results by segment" in the following section.)

On the expense front, personnel expenses, in particular, increased significantly as the Group actively recruited in the previous fiscal year to expand research capacity. This allowed the business to receive and fulfill orders for research projects as revenue was on an upward trend. This rise boosted personnel expenses from the year-ago level. The business is also actively recruiting for the new businesses that it is focusing on, including the data utilization support (consulting) business. Outsourcing expenses also rose as the Group maximized external capacity through outsourcing to tap into expanding client demand. In addition, other expenses increased chiefly due to the expansion of operating activities resulting from the recovery from Covid-19.

Consequently, the Group recorded earnings before interest, taxes, depreciation and amortization (EBITDA) (*4) of 1,536 million yen (down 15.7% year-on-year), reflecting an increase in personnel expenses, etc., operating profit of 815 million yen (down 28.0％ year- on-year), profit before tax of 747 million yen (down 29.3％ year-on-year) and profit attributable to owners of the parent of 204 million yen (down 60.5％ year-on-year) for the first quarter.

- 2 -

Return on equity (ROE: calculated using the data for the preceding 12 months) stood at 9.4% (down 1.6 points year-on-year). The interest

coverage ratio (*5: calculated in the last 12 months) came to 22.6 times (14.7 times in the corresponding period of the prior fiscal year).

(iii) Explanation of operating results by segment

The overview of operating results by segment of the Group is as follows (*3):

Consolidated financial results by segment	Three months ended	Three months ended	Increase/decrease	Change %
(Million yen unless otherwise indicated)	September 30, 2021	September 30, 2022
Revenue	10,890	12,435	+1,545	+14.2%
Japan and Korea Business	8,149	8,909	+759	+9.3%
Overseas (ex-Korea) Business	2,781	3,575	+794	+28.6%
EBITDA	1,823	1,536	(286)	(15.7%)
Japan and Korea Business	1,438	1,309	(129)	(9.0%)
Overseas (ex-Korea) Business
384	227	(157)	(40.9%)
Operating profit	1,131	815	(316)	(28.0%)
Japan and Korea Business	939	802	(137)	(14.7%)
Overseas (ex-Korea) Business	191	9	(182)	(95.1%)

(Japan and Korea Business)

In Japan, demand for marketing research from client companies is expanding. In this environment, online research revenue at the Company remain steady. During the first quarter of the previous fiscal year, the Group suspended the operation of part of its offline research services due to the declaration of a state of emergency, but resumed the operation in the second quarter once it had ended. During the first quarter, revenue recorded a year-on-year increase due to the suspension of services a year ago. In addition, revenue from Digital and Other New business fields continued to grow, reflecting the strong performance in data utilization support (consulting), which started in earnest in the previous fiscal year, and other businesses. Meanwhile, demand from client companies increased, and the Group's human resources became insufficient to meet the demand for online research. As a result, the Group lost some opportunities. Responding to the situation, the Group is hiring and training more talent to expand internal capacity to meet demand, while using external capacity through outsourcing.

In Korea, a movement to substitute offline research with online research accelerated, following the Covid-19 pandemic. The Group, which excels in online research, maximized this business opportunity and continued to grow revenue from online research. Sales activities in the digital business, including the panel big data service, also grew steadily. Due to those business activities and the positive effect of exchange rates, the Group achieved double-digityear-on-year growth in revenue in the Korea Business in the first quarter.

Consequently, the Japan and Korea Business segment recorded revenue of 8,909 million yen (up 9.3% year-on-year). In terms of expenses, personnel expenses rose significantly to develop a structure for receiving orders, while outsourcing expenses also increased to meet expanding client demand. As a result of these increases in expenses, segment profit amounted to 802 million yen (down 14.7% year-on-year).

(Overseas (ex-Korea) Business)

In the Overseas Business (ex-Korea), we operate in North America, Europe, Latin America, the Middle East and certain Asian countries other than Japan and Korea. The business was significantly affected by Covid-19 in the first quarter of the previous fiscal year, but since then, it has been recovering. The Group gained wallet share of some global key accounts (*6) and acquired new projects. Revenue in the Overseas (ex-Korea) Business segment, as a result, was strong in the first quarter, and recorded double-digit growth, reflecting also the positive effect of exchange rates. Meanwhile, personnel expenses increased significantly due to strengthened recruitment efforts to meet expanding client demand.

As a result, the Overseas Business (ex-Korea) segment recorded revenue of 3,575 million yen (up 28.6% year-on-year) and a profit of 9 million yen (down 95.1% year-on-year).

- 3 -