Net Marketing : Financial Results for the Second Quarter of the Fiscal Year Ending June 30, 2022

Financial Results

for the Second Quarter of the Fiscal Year Ending June 30, 2022

Net Marketing Co. Ltd.

Stock Code 6175

[Forward-looking statements]

This material was prepared by Net Marketing Co. Ltd. (hereinafter referred to as "the Company") to increase understanding of the current status of the Company. The information contained in this material is derived from various sources including knowledge within the Company and public information available to the Company and the Company makes no guarantee of the accuracy of such information. The actual performance of the Company may differ due to a variety of factors.

[Representation of net sales in this material]

The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29) applies to the financial statements for the fiscal year ending June 30, 2022 and subsequent fiscal years. Accordingly, net sales of the Advertising Business segment are stated in net amounts, not in total amounts as in the statements for the past fiscal years.

For the purpose of comparison with past years' results, some slides in this material display net sales in total amounts.

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Financial Highlights for the Second Quarter of the Fiscal Year Ending June 30, 2022

Executive Summary

Executive Summary

	First half of fiscal year		Net Sales	Operating Income
	ending June 30, 2022
	Company-wide		2,592 million yen	308 million yen
	Change YoY	+4.7%*	+24.5%
	Earnings forecast		Net Sales	Operating Income
	for the fiscal year ending
	June 30, 2022		5,785 million yen	500 million yen
	(Announced in Aug. 2021)
	(Progress rate)		(44.8%)	(61.6%)
	Media		Net Sales	Operating Income
	Business		1,960 million yen	351 million yen
	Change YoY	-16.7%	+24.0%
	Advertising		Net Sales	Operating Income
	Business		636 million yen	306 million yen
	Change YoY		+13.1%*	+4.3%

• Comparison figures are calculated using figures before application of the Accounting Standard for Revenue Recognition. Actual results include adjustments (internal sales and corporate expenses).

Company-wide

• Net sales were up 4.7% year on year, supported by the Advertising Business. Operating income and ordinary income both rose significantly. Net income grew 47.0%.

Progress in Earnings Forecast

• Good progress was made against the full-year earnings forecast, with the progress rates of 44.8% in net sales and 61.6% in operating income.
• For the second half, continue to build the foundations that pave the way for active investment in growth.

Media Business

• We systematically reduced ad placements. Operating income rose sharply by 24.0%. Prioritizing service improvement, we fully resumed ad placements and promotion at the end of year. We will continue to step up attraction of customers with a view to a phase of regrowth.

Advertising Business

• In the mainstay affiliate advertising consulting, projects from financial institutions grew. Net sales helped increase company-wide net sales. In programmatic advertising consulting, new orders have been accumulating since the start of the second quarter. With marketing DX based on in-depth analysis of big data, we will aim for new growth.

Other

• We launched the Risk Management Committee to strengthen the company-wide risk management structure.
• Following the Tokyo Stock Market's market restructuring, we will be listed on the Standard market from April 2022.

©2022 Net Marketing Co. Ltd. All rights reserved.

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Financial Results

Financial Highlights	YoY

Net sales rose 4.7% year on year. Operating income grew massively by 24.5% and so did ordinary income by 23.3%.

Net income increased 47.0%.

				(Million yen)
	2021.6	2022.6		Increase/
		Decrease (%)
	2Q Actual	2Q Actual	(Reference: Under the
	(Under the conventional
			conventional standard*)	standard)
Net Sales	6,671	2,592	6,984	+4.7%
Gross Profit	2,217	1,957	1,957	-11.7%
Gross Profit Margin	33.2%	75.5%	28.0%
Operating Income	247	308	308	+24.5%
Operating Income Margin	3.7%	11.9%	4.4%
Ordinary Income	255	315	315	+23.3%
Net Income	172	253	253	+47.0%

* Figures show those for the case in which the Accounting Standard for Revenue Recognition (ASBJ Statement No.29) is not applied.

©2022 Net Marketing Co. Ltd. All rights reserved.

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