アイティメディア（2148） – [Delayed]Fiscal Year Ended March 31, 2022 Earnings Briefing

■ ■ ■ ■ ■Fiscal Year Ended March 31, 2022Earnings BriefingApril 28, 2022Securities code: 2148 Tokyo Stock Exchange Prime Market■ ■ ■ ■ ■ This document has been translated from the Japanese original for the convenience of non-Japanese shareholders. In the event of any discrepancy between this translation and the Japanese original, the original shall prevail. Forward-looking comments appearing in this material, such as earnings outlooks, are based on information available when the material was created and include uncertainties. Actual earnings may substantially differ from the forecasts due to changes in various factors and business conditions. Items that could impact the Company’s earnings are listed in the “Business Risk” section of the Securities Report (Yukashokenhokokusho) For the Fiscal Year Ended March 31, 2021. Please refer to that. However, it should be kept in mind that factors that could impact earnings are not limited to those listed in the Business Risk section. Risks and uncertainties include the possibility of future events that may have a serious and unpredictable impact on the Company. We have carefully prepared the information included in this material, but readers should be aware that we do not guarantee the accuracy or certainty of that information. This material is not provided to solicit investments. Decisions regarding investments should be made by investors themselves. The unauthorized use of this material and data are strictly prohibited. The Company voluntarily applied International Financial Reporting Standards (IFRS) starting with the 1Q FY16. For the fiscal year ended March 31, 2020, Knowledge onDemand Inc. was classified as a discontinued business because of the transfer of shares. Therefore, income and losses from discontinued businesses are given separately from continuing businesses in the Condensed Interim Statement of Income. Revenue and operating income are the monetary amount of continuing businesses. For the fiscal year ended March 31, 2019, a similar reclassification was carried out.2■ ■ ■ ■ ■Progress Toward Medium-Term Targets3■ ■ ■ ■ ■Medium-Term Target X40 Operating IncomeMedium-Term target: X40(FY25 operating income of ¥4.0 billion)40(hundred million yen)820FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22FY254Medium-Term Target X40 RevenueRevenue expected to exceed ¥10 billion100■ ■ ■ ■ ■68(hundred million yen)43FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22FY255■ ■ ■ ■ ■Year 1 Toward Medium-Term Target FY21 EarningsGood progress made in year 1Revenue(hundred million yen)+12+17%8068Operating income40+6+33%2620FY20FY21FY25FY20FY21FY256■ ■ ■ ■ ■Year 2 Toward Medium-Term Target FY22 Earnings ForecastContinue to generate record income.Bring forward investments to generate growth in the medium term.Operating income40Revenue(hundred million yen)+6+8%878068+2+9%292620FY20FY21FY22FY25FY20FY21FY22FY257■ ■ ■ ■ ■Revenue Composition (by Revenue Model)Lead GenerationLead GenerationUnder developmentProgrammatic adAdAdExpand industrial technology fieldDigital eventProgrammatic adCollaboration with ON24Lead GenerationLead GenerationLead GenerationRedesign platform system (LBP)Revenue compositionFY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21Lead GenerationDigital event revenueLead Generation revenueProgrammatic ad revenueAd revenue8■ ■ ■ ■ ■Lead Generation revenue(million yen)Demand continues to growFirm growthIssues:Strengthen ability to generate leads in fields with strong demandFY18FY19FY20FY21FY229■ ■ ■ ■ ■Lead Generation Revenue: Key for Continued Growth (1) Increase Ability to Generate LeadsFocus on fields with particularly strong demand within the broad technology markete.g., cloud, SaaS, AI, security, and industry DXStrengthen contentOptimize priceIncrease employees and create new contentsGlobal Editorial Center(tentative name)ITmedia’s dedicated editing department M&Aex. Overseasmedia partnersTranslation partnersCoordinate demand-supply balanceOptimize lead unit price for each target(higher price for some)10■ ■ ■ ■ ■Lead Generation Revenue: Key to Continued Growth (2) Develop New Value AddedStrengthen system aspects + Incorporate US leading modelExpand serviceLead Generation for system development companiesMake it data drivenRedesign platform systemABM/intent dataIntegrate data across revenue models“Campaign Central”Develop SaaS matching serviceUS-type service localizationCombine all campaign results using member IDContinually update sales leads DB for each customer11■ ■ ■ ■ ■Digital Event Revenue(million yen)SponsoredCommissionedEstablished marketAssume pandemic is brought under controlSlow down in the short termContinued growthin the long term12■ ■ ■ ■ ■Digital Event Revenue: Growth Due to Change in Needs Between Before, During, and After PandemicAverage number of times events held per company (quarter)2.40.65.76.90.30.3Pre-pandemicDuringpandemic Post-pandemicDigital6.51.5HybridPhysical2.1Events will remain digitaleven after pandemic* Interviews of our customers: January 2022 (N = 125)13■ ■ ■ ■ ■Digital Event Revenue: Growth Due to Strong Event BrandsSponsored events that leverage strength of specialized mediaGrowth of event brands following ITmedia Virtual EXPO14Ad revenue(million yen)■ ■ ■ ■ ■Smart and social Programmatic ads drive growthof which is programmatic ad revenueFY18FY19FY20FY21FY2215■ ■ ■ ■ ■Ad Revenue: Netolabo—Revenue and PVRevenue per 1,000 PV (yen)Focused on establishing a brand and expanding PVChanges in operating policyDisorder inad marketRevenuePVOutlookImproved revenue efficiencyFruits of changing policy since Q3 of the previous fiscal yearAd market unit prices continue to improveTotal PVs growth will slow downHigh profit margin PVs will continue to grow+Ad market unit prices are expected to improve after the pandemic↓Continuing strong growthFY18FY19FY20FY2116■ ■ ■ ■ ■Ad Revenue: Due to Growth in Programmatic Ad RevenueImprove PV compositionLow profit margin PVs High profit margin PVsImprove a data analysis environmentIncrease sophistication of profitability analysisAnalysis variables• User behavior• Traffic source• Content type• Article topic, etc.Difference of 5-8 times between highest and lowest profitabilityOptimize operation policyPV efficiency → stress revenue efficiencyFocus on high profit margin PVs17■ ■ ■ ■ ■General: Response to Digital ShiftGenerate growth by responding to the digital shift in industries and marketingDevelop high growth markets(increase in number of customers)Reinforce or develop new revenue models(increase in spending per customer)Cloud and SaaSIndustry DXStrengthen and expand Lead GenerationStrengthen system and integrate dataSales abilitiesSpecialize and develop strong customer relationships in technical industriesComprehensive consulting for B2B marketing and customer acquisition18■ ■ ■ ■ ■Number of Customers1,869 DX1,669 1,462 Greater importance of technology in industryand business1,307 1,334 1,339 1,221 698 Increase in number of our customersDriven by cloud/SaaS and industry DX fieldsFY14FY15FY16FY17FY18FY19FY20FY2119■ ■ ■ ■ ■Strengthen Contents in Cloud/SaaS FieldLaunch SaaS Select with ITreviewSite jointly operated with ITreview, the largest B2B IT product and SaaS review platform in JapanOffer information on reviews, evaluations, and comparisons based on actual users of SaaS productshttps://www.itmedia.co.jp/news/subtop/saasselect/ Content example:Basic key for introducing SaaS: Why is marketing automation necessary now?What SaaS are rapidly growing startups using?: KARADANOTE editionWhat CRM tool offers greater satisfaction than second-ranked HubSpot? (April 2022 edition)Top ranked business chat service in terms of satisfaction—No. 2 is Slack. What is No. 1? (April 2022 edition)Top ranked virtual meeting tool in terms of satisfaction—Which is 2nd ranked after No. 1 Zoom? (April 2022 edition)20■ ■ ■ ■ ■Cost Input Point: Reinforce Business Through System InvestmentService developmentSystem redesignSmart workStrengthen and expand Lead GenerationProgrammatic admanagement systemIntegrate data across revenue modelsHachu Navi platform systemContinue to improve the remote work environmentUtilize SaaS-type AIOptimize lead captureLegal, sales management, etc.Strengthen development abilities. Appoint executive officer who is engineer.21■ ■ ■ ■ ■Sustainability: Priority Topics for This Fiscal YearSustainability that leverages media influencehttps://corp.itmedia.co.jp/sustainability/ • Identify materiality• Promote diversity• Respond to climate change• Expand decarbonization-related content• Broaden related disclosure• Broaden English disclosure• Expand SDGs-related contentMoved to Tokyo Stock Exchange’s new Prime Market on April 4, 202222■ ■ ■ ■ ■Fiscal Year Ended March 31, 2022, Earnings Overview23■ ■ ■ ■ ■Fiscal Year Ended March 31, 2022, Executive SummaryRecord earnings Strong growth for second consecutive fiscal year Revenue ¥8,092 million (+17%) Operating income ¥2,687 million (+33%) 24■ ■ ■ ■ ■(+17%)(+17%)(+14%)Quarterly Revenue(million yen)(+23%)FY21FY20FY19FY18Growth even in Q4, our projections for which were initially conservativeQ1Q2Q3Q425■ ■ ■ ■ ■Fiscal Year Ended March 31, 2022, EarningsRevenueOperating income(million yen)+1,200(+17%)+1,612(+31%)+665(+33%)Operating income margin+849(+73%)FY19FY20FY21FY19FY20FY2126■ ■ ■ ■ ■Consolidated Statement of IncomeFY20FY21AmountAs % of revenueAmountAs % of revenueIncrease% change100.0%100.0%+1,200+17.4%RevenueTotal costs(of which are personnel expenses)EBITDAOperating incomeIncome before income taxNet incomeNet income attributable to owners of the parent6,8914,8692,7612,4762,0221,9171,2551,25570.7%40.1%35.9%29.3%27.8%18.2%18.2%8,0925,4042,9583,0682,6872,6801,8001,80066.8%36.6%37.9%33.2%33.1%22.3%22.3%+535+196+592+665+763+545+545(million yen)+11.0%+7.1%+23.9%+32.9%+39.8%+43.5%+43.5%* EBITDA: Operating income + depreciation + amortization on intangible assets + impairment loss + stock-based compensation expenses – other one-time revenue + other one-time expensesStock-based compensation expenses were included this time, and the amount for the previous fiscal year was calculated in the same way.27■ ■ ■ ■ ■Analysis of Changes in Operating IncomeIncome rose because of growth in revenue.Investment in growth fields continued to be made.(million yen)Lead GenerationRevenue growth+240Cost increase+196Personnel expensesMedia ad+960+392OtherYoY change+ ¥665 million2,687Declinein office costs¥53 million2,02228■ ■ ■ ■ ■Consolidated Statement of Cash FlowsFY20FY21Change(million yen)2,2121,989(223)Depreciation and amortizationCash flows from operating activitiesCash flows from investing activitiesCash flows from financing activitiesChange in cash and cash equivalentsCash and cash equivalents at beginning of the periodCash and cash equivalents at end of the period(161)152+313(475)(1,203)(727)1,575938(637)4,3025,877+1,575Main items of operating CFProfit before taxIncome taxes paidMain items of investing CFProceeds from sales of investment securitiesPurchase of property, equipment, and intangible assetsPayment for acquisition of businessesMain items of financing CFProceeds from issuance of sharesDividends paid+2,680+284(919)+201(57)(40)+178(397)(800)295,8776,815+938Purchase of treasury shares■ ■ ■ ■ ■Consolidated Statements of Financial PositionAssetsiLabilitiesEquityCurrent assetsNon-current assetsTotal assetsCurrent liabilitiesNon-current liabilitiesTotal liabilitiesShare capital / capital surplusRetained earningsTreasury stockAccumulated other comprehensive incomeTotal equity attributable to owners of parentTotal equityAt the end of March 2021At the end of March 2022(million yen)Change+1,0607,6671,4079,0741,894621,9573,6613,607(344)1927,1177,1178,7281,32010,0482,051642,1153,9335,143(1,144)–7,9327,932(86)+974+157+1+158+272+1,535(800)(192)+815+815Equity attributable to owners of parent per shareRatio of equity attributable to owners of parent to total assets¥359.11¥401.34+¥42.2378.4%78.9%+0.5 ptTotal assetsCash and cash equivalentsOther financial assetsRight-of-use assetsTotal liabilitiesLease liabilitiesTotal equityShare capital/capital surplusRetained earningsOf which is profit (loss)Of which is dividend from retained earningsTreasury stock+938(339)+175+157+272+1,535 +1,800(396)(800)30Revenue (By Quarter)Record quarterly revenue(million yen)Q4Q3Q2Q14,6081,310 1,126 970 FY171,201 1,140 4,7031,393 1,121 1,048 FY185,2781,501 1,336 1,310 1,129 FY19■ ■ ■ ■ ■8,0922,376 2,003 1,955 6,8912,036 1,751 1,677 1,425 1,755 FY20FY21Q4¥2,376 millionYoY change+¥340million (+17%)31■ ■ ■ ■ ■Operating Income (by Quarter)Historic Q4 operating income2,687(million yen)Q4Q3Q2Q1746242 248 174 79 FY17881366 190 194 129 FY181,172347 334 297 192 FY192,022533 518 350 FY20685 578 FY21701 Q4¥701 million722 YoY change+¥168 million (+32%)32■ ■ ■ ■ ■Cost Breakdown by Quarter1,503218 1,675305 1,270 1,281235 233 445 Q4YoY changeAs percent of totalTotal+11.4%100%Outsourcingexpenses+40.3%18.3%Other+8.9%26.6%personnelexpenses+5.5%55.1%340 345 360 [Main factors behind year-on-year change](million yen)1,1541,012 1,001176 1,158 1,132191 190 1,075157 1,177409 178 937138 263 147 156 290 286 364 312 322 304 535 574 559 613 604 644 637 875 923 658 689 687 ’19Q1 ’19Q2 ’19Q3 ’19Q4 ’20Q1 ’20Q2 ’20Q3 ’20Q4 ’21Q1 ’21Q2 ’21Q3 ’21Q4Personnel expenses 47• Increase in number of employees in growth fields• Increase due to one-time payments for employees and stock-based compensation in both Q4 FY20 and Q4 FY21Q4 FY20 +177 M, Q4 FY21 +184 MOutsourcing expenses +87• Linked to increase in digital eventsOther +36• Operation environment, system• Decline in office costs33■ ■ ■ ■ ■Enhance Smart WorkMake one-time payment to employeesEmployees Working From HomeMore than 90% of employees still work from home100%90%80%93%One-time payment in Q4 as bonus for strong earnings and to improve work-from-home environmentJulyOctoberJanuaryAprilJulyOctoberJanuary2020 20212022Promote smart work34■ ■ ■ ■ ■Employee Breakdown By Quarter(employees)28026 16 27824 16 113 112 29629 15 117 2882715117370 37329 31 18 144 18 146 35435 18 139 36135 18 142 337 34035 351812518 131 319311812632532 18 122 47.4%43.8%41.8% 40.9% 42.4%43.0%38.4%36.4%37.5% 35.3% 34.3% 38.8%* Includes contract, temporary, and part-time employees125 126 129135 144153 159156 162 166 177 180 Ratio of personnel expenses to revenue[SG&A expenses] personnel expenses + [cost of sales] labor costsRevenue100’19Q1 ’19Q2 ’19Q3 ’19Q4 ’20Q1 ’20Q2 ’20Q3 ’20Q4 ’21Q1 ’21Q2 ’21Q3 ’21Q435■ ■ ■ ■ ■Revenue by SegmentLead Generation Business+240(+8%)(million yen)Media Ad Business+960(+26%)FY20FY21FY20FY213636■ ■ ■ ■ ■Revenue by Segment3,411 Lead Generation Business +240 (+8%)– Digital shift within marketing continued(million yen)3,171 1,866 1,968 2,249 2,501 2,735 3,028 3,720 4,680 FY17FY18FY19FY20FY21Media Ad Business +960 (+26%)– Stronger demand among manufacturing and business customers because of accelerated DX– Firm sponsored digital events– Programmatic ad revenue increased37■ ■ ■ ■ ■Operating Income by SegmentLead Generation Business+128(+16%)Media Ad Business+536(+44%)(million yen)Operating income marginFY21FY20FY20FY21Operating income margin3838Operating Income by Segment(million yen)20.2%21.7%14.8%14.6%277505FY17287594FY18■ ■ ■ ■ ■Operating income margin37.5%27.3%932Lead Generation Business 1,754Media Ad Business32.7%25.4%8041,217FY20FY213923.3%20.7%465706FY19■ ■ ■ ■ ■State of KPI: Members and PV for Past 5 QuartersNumber of Lead Generation members Number of PV (monthly average)*1(10,000 people)RPA BANK merger110(+8.8%)(million PVs)42981348403(-6.2%)101(+24.2%)301(-13.3%)OtherNetoabol40’20Q4’21Q1*2’21Q2’21Q3’21Q4’20Q4’21Q1’21Q2’21Q3’21Q41. Members eligible for Lead Generation service because of ITmedia ID, common member platform2. Delete and revise low-quality data■ ■ ■ ■ ■State of KPI: Customers Lead Generation BusinessMedia Ad BusinessFY19FY20FY21FY19FY20FY21(companies)1,513 (companies)1,130 1,303 1,320 1,127 1,093 838 964 954 809 748 613 929 752 792 765 583 630 599 355 470 433273273 Q1 cumulative Q2 cumulative Q3 cumulative Q4 cumulativeQ1 cumulative Q2 cumulative Q3 cumulative Q4 cumulative41■ ■ ■ ■ ■Revenue by Revenue Model(million yen)6,8915,278Lead Generation BusnessiiMeda Ad Busnessi916 1,109 1,434 8,092+1,200 million(+17% YoY)Lead Generation revenue+¥243 million (+10% YoY)Digital event revenue+¥374 million (+26% YoY)Ad revenue+¥582 million (+19% YoY)of which is Programmatic adrevenue+¥325 million (+29% YoY)42■ ■ ■ ■ ■Digital Event Revenue(million yen)Revenue (cumulative)Topics1,4336411,808 +374(+26%)• Firm sponsored digital eventsSponsored+378(+59%)• Commissioned-3(-0%)Increase size of various events, such as ITmedia Virtual EXPO, ITmedia Security Week, ITmedia SaaS EXPO43■ ■ ■ ■ ■Fiscal Year Ending March 31, 2023,Earnings Forecast and Dividend Forecast44■ ■ ■ ■ ■Social TopicsCOVID-19Situation in UkraineWeak yen• Minor impact at current time• Envisioned due to pandemic being gotten under control• Digital shift within marketing will continue• Digital event revenue: slow down in the short term• Programmatic ad revenue: improve unit price45■ ■ ■ ■ ■FY22 Consolidated Earnings Forecasts• Continue to post record earnings• Bring forward investment for medium-term growthRevenueOperating incomeNet income attributable to owners of parentFull fiscal yearYoY changeFY21 Actual8,730(+7.9%)8,0922,920(+8.7%)2,687Forward-looking comments noted above, such as earnings outlooks, are based on information available when the material was created and certain assumptions deemed rational,and the Company does not guarantee they will occur. Actual earnings may substantially differ due to various factors.(million yen)1,970(+9.4%)1,80046■ ■ ■ ■ ■FY21 Year-end Dividend and FY22 Interim Dividend(%, payout ratio) (yen)56.9%28.041.2% 39.3%23.0FY21Year-end 12 yenFor full fiscal year 23 yen30.6%24.6%24.9%30.4%25.3% 25.3%28.1%* Total shareholder return ratio,which includes purchase of treasury shares: 69.7%16.0Achieve W20Commemorative dividend10.010.012.020-year anniversary commemorative dividend11.0Change-in-market commemorative dividend6.672.664.6715-year anniversary commemorative dividendFY22For full fiscal year 28 yen* Payout ratio 28.1%’12’13’14’15’16’17’18’19’20’21’2247■ ■ ■ ■ ■(Reposted) Medium-Term Target X40 Operating IncomeMedium-Term target: X40(FY25 operating income of ¥4.0 billion)(hundred million yen)208FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY2240FY2548■ ■ ■ ■ ■■ ■ ■ ■ ■InquiriesITmedia Inc.Kioicho Building 3-12,Kioicho Chiyoda-ku,Tokyo 102-0094Inquiries: ir@sml.itmedia.co.jp