Macromill : Summary of Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending June 30, 2021

(Amounts of less than one million yen are rounded off.) (Percentages calculated on year-on-yearbasis.)

Summary of Consolidated Financial Statements for the First Nine-Month Period of the

Fiscal Year Ending June 30, 2021 [IFRS]

May 13, 2021

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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 Masahiro Shimizu, Executive Officer, Global CFO [phone]

May 14, 2021

-

Yes

Yes (for analysts and institutional investors)

1. Consolidated Financial Results for the First Nine-Month Period of the Fiscal Year Ending June 30, 2021 (from July 1, 2020 to March 31, 2021)

(1) Consolidated Business Performance

		Revenue		Operating profit		Profit before tax	Profit for the period
	Million yen		%	Million yen		%	Million yen		%	Million yen		%
First nine-month period of	33,105		(1.3)	5,147		(14.9)	4,789		(17.4)	3,337		(15.2)
the year ending June 30, 2021
First nine-month period of	33,552		(2.0)	6,049		(11.4)	5,798		(10.6)	3,935		(14.7)
the year ended June 30, 2020
	Profit attributable to owners	Total comprehensive income	Basic earnings per share	Diluted basic earnings
		of the parent		for the period			per share
	Million yen		%	Million yen		%			Yen				Yen
First nine-month period of	2,734		(21.3)	3,435		(8.6)			67.80				67.37
the year ending June 30, 2021
First nine-month period of	3,475		(15.6)	3,760		(16.6)			86.37				85.44
the year ended June 30, 2020
(Reference)
		EBITDA		EBITDA margin
	Million yen		%			%
First nine-month period of	7,554		(7.2)			22.8
the year ending June 30, 2021
First nine-month period of	8,141		3.8			24.3
the year ended June 30, 2020
(2) Consolidated Financial Position
		Total assets		Total equity		Equity attributable to owners of	Ratio of equity attributable to
				the parent		owners of the parent
				Million yen		Million yen			Million yen				%
As of March 31, 2021				79,302			33,517			29,883				37.7
As of June 30, 2020				77,150			30,736			27,563				35.7
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, 2020				－	0.00		－			11.00			11.00
Year ending June 30, 2021				－	0.00		－
Year ending June 30, 2021 (forecast)									13.00			13.00

(Note) Revisions from dividends forecasts announced most recently: Yes

3. Forecast of Consolidated Financial Results for the Year Ending June 30, 2021 (from July 1, 2020 to June 30, 2021)

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

	Revenue			Operating profit	Profit before tax		Profit for the year		Profit attributable to	Basic earnings per
					owners of the parent	share
	Million yen			%		Million yen	%	Million yen		%	Million yen		%	Million yen	%	Yen
Full year	42,500			3.0		4,700	1084.0	4,200		-	2,900		-	2,300	-	57.09
(Note) Revisions from financial results forecasts announced most recently: Yes
(Reference)
	EBITDA				EBITDA margin
	Million yen		%				%
Full year	7,900		(8.7)				18.6

• 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

1. Number of shares outstanding (common stock)
2. 1. Number of shares issued (including treasury stock) at the end of the term:

As of March 31, 2020	40,365,000 shares	As of June 30, 2020	40,320,300 shares
(ii) Number of shares of treasury stock at the end of the term:
As of March 31, 2020	135 shares	As of June 30, 2020	135 shares
(iii) Average number of shares during the period
Nine months ended December 31, 2020	40,326,235 shares	Nine months ended December 31, 2019	40,236,030 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 has decided to conduct a share buyback program at the Board of Directors meeting held on May 13, 2021. The basic earnings per share in the financial forecasts have been included the impact of share buyback.
2. The Group applies the International Financial Reporting Standards (hereinafter "IFRS") to and after the fiscal year ended June 30, 2016.
3. 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 on 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.
4. EBITDA = operating profit + depreciation and amortization + loss on retirement of non-current assets + impairment loss
5. EBITDA margin = EBITDA / revenue
6. 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.
7. 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 period, 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 of that of other such companies.

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Accompanying Materials - Contents
1. Qualitative Information about Consolidated Financial Results for the Quarter..................................................................................	3
(1)	Overview of operating results for the first nine months .........................................................................................................	3
(2)	Explanations about financial position.....................................................................................................................................	7
(3)	Explanations about forward-looking information including forecast of consolidated financial results ..................................	8

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1. Qualitative Information about Consolidated Financial Results for the Quarter

1. Overview of operating results for the first nine months

(i) Explanation of the operating environment

During the first nine months (July 1, 2020 to March 31, 2021), the global economy saw vaccination campaigns and other moves aimed at reducing the impact of the Covid-19 pandemic in some countries and regions. However, the situation differed by region, and therefore the outlook for the future remained uncertain amid moves to restrict economic activities once again. In Japan, too, the outlook for the end of the crisis remained uncertain, with a state of emergency declared for the second time in regions facing a surge in Covid-19 cases in January. Restrictions on economic activities were imposed once again in response to the resurgence of the disease, causing concerns over a prolonged negative impact on the economy.

Looking specifically at the marketing research sector, the total global marketplace reached an estimated value of $46.4 billion, with online marketing research accounting for $20.5 billion (*1). In Japan, the size of the overall marketing research sector was 229.1 billion yen, with online marketing research valued at 76.1 billion yen (*2). Although there is concern that the market will contract in the future due to the impact of the Covid-19 pandemic, the anticipated adverse effect could be alleviated by the marketing research sector shifting even further online in the medium term.

In this economic and market environment, the Group's results continued to be negatively affected by the pandemic, but the effect gradually diminished and there were growing indications of a recovery. The Group considers the safety and health of its clients, consumer panels, employees and other stakeholders to be its top priority. Therefore, the Company has been implementing measures to prevent the spread of the virus in line with government guidelines for each region. Simultaneously, the Group has been actively implementing measures in response to the changing business environment to increase opportunities to use online marketing research, which is the Company's strength. This includes making new proposals to clients and strengthening the research structure through remote working.

Aside from the impact of Covid-19, the business environment in which the Group operates is changing dramatically. Clients' marketing issues are becoming increasingly sophisticated and diverse, with more consumer touchpoints than ever, and the increasingly widespread use of all kinds of big data, AI and marketing tools. In the digital-related domain in particular, changes in the business environment have been accelerating. This is partly because the regulations for handling personal information are being strengthened worldwide, and the revised Act on the Protection of Personal Information will be enforced in Japan. Consequently, leading platform operators are experiencing a growing trend of handling personal information more carefully, which is expected to continue. As a result, we can now see cases where the distribution of digital advertising by our clients is starting to be affected.

In the short term, these changes in the business environment may create challenges for the Group. However, marketing activities are indispensable to client companies. New demand to accurately understand changes in consumers' perception and behavior are emerging as a result of Covid-19. In addition, we regard the shift to digital in clients' marketing activities as an unstoppable trend in the medium- to long-term. We understand that the 'New Normal' obligated by the spread of coronavirus, including client moves to promote Digital Transformation (DX), will lend further impetus to this trend.

The Group maintains an active approach to supporting the digitization of marketing activities undertaken by client companies. Our solid relationships with our consumer panels will continue to provide added value in the age of digitization. The Group has been undertaking initiatives for comprehensively handling a huge amount of diverse data points, including attribution, purchase, and consumption data, and behavioral, awareness and biological data, which are available from these consumer panels. The Group aims to address the changes in the business environment by proactively offering new consumer insights obtained through these initiatives as its proprietary services to client companies.

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(ii) Explanation of the operating results

An overview of the Group's operating results is as follows:

Consolidated financial results	Nine months	Nine months
ended March 31,	ended March 31,	Increase/decrease	Change %
(Million yen unless otherwise indicated)
2020	2021
Revenue	33,552	33,105	-446	-1.3%
Japan and Korea Business	26,680	26,568	-111	-0.4%
Overseas (ex-Korea) Business	6,971	6,649	-321	-4.6%
EBITDA	8,141	7,554	-587	-7.2%
Operating profit	6,049	5,147	-902	-14.9%
Profit before tax	5,798	4,789	-1,008	-17.4%
Profit attributable to owners of the parent	3,475	2,734	-741	-21.3%

During the first nine months of the fiscal year under review, while revenue in both the Japan and Korea Business and the Overseas Business (excluding Korea) segments continued to be affected by the Covid-19 pandemic, demand from corporate customers for marketing research showed signs of a recovery and revenue increased in both segments in the third quarter. As a result, consolidated revenue decreased to 33,105 million yen (down 1.3% year-on-year). (For an overview of results by segment, refer to "(iii) Explanation of operating results by segment" in the following section).

In terms of expenses, while travel, transportation, and other expenses decreased due to restrictions on traveling, outsourcing and personnel expenses increased in line with the recovery of revenue and improvement of the operational team structure. Depreciation associated with system investments made in prior years also grew.

Consequently, the Group recorded earnings before interest, taxes, depreciation and amortization (EBITDA) (*3) of 7,554 million yen (down 7.2% year-on-year), operating profit of 5,147 million yen (down 14.9% year-on-year), profit before tax of 4,789 million yen (down 17.4% year-on-year) and profit attributable to owners of the parent of 2,734 million yen (down 21.3% year-on-year) for the period.

Return on equity (ROE calculated using the data for the preceding 12 months) stood at -9.2% (down 22.2 percentage points year-on-year). It would have been 7.1% (down 6.0 percentage points year-on-year) excluding the impairment loss of goodwill recognized in the fourth quarter of the fiscal year ended June 30, 2020. The interest coverage ratio (*4: calculated in the last 12 months) resulted to -1.3 times (from 17.5 times in the corresponding period of the prior fiscal year). It would have amounted to 12.7 times excluding the impairment loss of goodwill recognized in the fourth quarter of the fiscal year ended June 30, 2020.

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