Septeni Holdings Co Ltd
TSE:4293
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
328
527
|
| Price Target |
|
We'll email you a reminder when the closing price reaches JPY.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Septeni Holdings Co Ltd
You don't have any saved screeners yet
I am Sato. Thank you very much for coming to our business results meeting despite your busy schedules. Today, we are announcing the results for the second quarter, and this is the agenda for today. I will start with cumulative second quarter earnings overview, followed by quarterly earnings, topics for each segment and finished with earnings estimates.
First, this is the consolidated cumulative second quarter earnings overview. This year is an irregular year with 5 quarters. This slide shows the highlights of the cumulative earnings for the 2 quarters from October to March.
Revenue remained almost flat from the previous fiscal year. On the other hand, expenses increased due to strengthening of human capital investment and new consolidation. As a result, profit decreased. Revenue was almost flat with an increase of 0.6%. Non-GAAP operating profit declined by 43.2%. EPS was JPY 10.28.
Page 5 shows earnings highlights by segment. The Digital Marketing Business was partly affected by the economy. On the other hand, the Media Platform Business is more immune to business cycles because it is a B2C business. Therefore, this business posted steady growth.
For the Digital Marketing Business, we saw a year-on-year decline partly due to the good results last year. Furthermore, the shrinking budgets of some clients also contributed to the decline in both revenue and profit. As you see on the slide, revenue declined by 2.4% year-on-year.
Non-GAAP operating profits declined by around 30%. The Media Platform Business, on the other hand, posted significant growth year-on-year in revenue and significant reduction of losses. Revenue grew by about 36%. Operating loss was reduced, showing solid performance.
Page 6 is the consolidated income statement. In particular, with Dentsu Digital converted into an equity method affiliate, equity and earnings of affiliates increased significantly compared to the previous year.
Page 7 is earnings trend by business segment for 6 months. Last year, the Digital Marketing Business in blue performed very strongly and grew significantly from the previous year. This year, partly because of the strong results last year, growth was suppressed.
On the other hand, the Media Platform Business in red is accelerating growth. That is the by segment trend over the past few years. Now let me turn to the quarterly consolidated earnings overview. Some information on this slide is a repeat of what we saw in the highlights slide.
As the effects of new consolidation have run its full course, in the quarter from January to March, revenue growth declined. As a result, both revenue and profit fell. On the other hand, the size of revenue was slightly lower than last year, which was very strong, but still the revenue level is second highest since the founding of the company.
Page 10 is the consolidated quarterly trend of earnings. As I mentioned on the previous page, Q2 of the previous year saw the highest ever revenue level. Q2 of this year is second highest. So revenue grew compared to the previous quarter but fell compared to the same quarter last year.
Page 11 is the quarterly trend of consolidated profit before tax. With Dentsu Digital being converted into an affiliate, equity and earnings of affiliates increased last year. Different contributors to profit before tax are shown in different colors so that it is easier to understand.
Cash flow generation ability is stable. So the group as a whole is in a better position to generate profits. Page 12 is the constitution of consolidated expenses. As I will explain later, e-book sales in the IP Platform Business centered around manga and anime was very strong. So cost of sales increased with it.
Page 13 is the quarterly trend of consolidated SG&A, which is almost flat. Now I will turn to the overview by segment. First, the Digital Marketing Business. Amid high year-on-year hurdles and some clients cutting their budgets due to economic conditions, top line growth decelerated.
As you can see from the numbers on the slide, both revenue and profit decreased. Page 16 is the Digital Marketing Business quarterly earnings trend. Compared to 2 years ago, the level is much higher. However, in comparison to last year, which performed very strongly in Q1 and Q2, the numbers fell.
Page 17 is Digital Marketing Business progress in the business alliance with the Dentsu Group, which we are working on with emphasis. We are seeing solid progress with a number of clients in collaboration with Dentsu being the highest ever and top line also growing steadily.
Next is the Media Platform Business earnings overview on Page 19. The IP Platform Business, led by manga and anime, grew significantly year-on-year. The business is growing continuously and strongly. With this growth in revenue, operating loss is decreasing.
As you can see, in this segment, we are aiming at a business model of increasing returns, where revenue growth exceeds expense growth and we are seeing progress.
Page 20 is the Media Platform Business quarterly earnings trend. As I mentioned before, revenue set a new record high. Page 21 is the revenue trend for the IP Platform Business alone. We disclosed this information using an index system. And as you can see from this graph, growth is robust. In particular, billing revenue was 1.8x the level of last year. So growth was very high, driving the overall growth of this segment.
Page 22 is the IP Platform Business subscription revenue trend. Again, we are seeing solid linear growth. The number of subscribers increased steadily and subscription revenue reached a record high.
In the previous quarter, there was a slight drop in revenue quarter-on-quarter due to the exchange rate. But this quarter, we are back to linear growth with no impact of the exchange rate.
Page 23 is the IP Platform Business commerce revenue trend. Strong e-book sales pushed up commerce revenue to approximately 2.5x the level of last year, reaching a very high level.
Page 24 shows topics from the IP Platform Business. As we announced in a press release, we opened a new production studio for manga and webtoon content in Fukuoka. With this webtoon studio in Fukuoka, in addition to the usual manga format where pages are read horizontally, webtoon titles will be increased.
Currently, we serialized 100 manga titles simultaneously. Within a few years, we aim to supply the same level of webtoon titles. The new studio in Fukuoka was opened as a central production base for this purpose. That was an overview of the IP Platform Business results.
Now let me talk about progress of earnings estimates. Page 26 is our medium-term business policies overview. No changes have been made, but we show this slide again as a recap. Likewise, as we mentioned last time, from April 2023, with the aim of increasing human capital value, human resources investment is being strengthened, including raising salary levels.
In the short term, this will push up costs. But by enhancing human capital value, which is our source of value creation, the value we provide to our clients will increase and so will shareholder value. We aim at maximizing our financial performance through this cycle.
Page 29 shows the progress toward earnings estimates. As I mentioned at the outset, this year is irregular due to the change in the starting month of the fiscal year. This year is an irregular 5-quarter 15-month fiscal year. This slide shows the progress after 2 out of the 5 quarters.
Page 30 shows progress towards earnings estimates by business segment. Page 31 shows the disclosed integrated report for fiscal year 2022, which has just ended. Since the founding of the company, human capital has been the central pillar of management. Initiatives to maximize human capital are introduced in the report through dialogue with diverse stakeholders. The latest report is available on the web, and the link is on this page. Please take a look.
This is the end of my presentation. I look forward to your continued support to our group. Thank you for your attention.