Financial Highlights Q2 Results of FY 2016 (Fiscal year ending March 31, 2017) November 10, :Avex Group Holdings Inc.

Transcription

1 Financial Highlights Q2 Results of FY 2016 (Fiscal year ending March 31, 2017) November 10, :Avex Group Holdings Inc. 1

2 Consolidated Results 2

3 FY2016 Q2 Highlights Net Sales 7 billion yen (+10.3%) increase YoY (billions of yen) FY2014 Q2 FY2015 Q2 FY2016 Q2 3

4 FY2016 Q2 Highlights Net Sales Change by Segments Sales increased due to strong sales of physical products in the Video Business and increase of live-related sales in the Management & Live Business (billions of yen) FY2015 Q2 Music Video Management & Live Others + Adjustment FY2016 Q2 4

5 FY2016 Q2 Highlights Net Sales composition ratio by Segments (Based on the amounts before elimination of inter-segment transactions) Others 2% 1.4 Others 2% 1.4 (billions of yen) Management & Live 37% 26.4 Music 34% 24.8 Management & Live 39% 30.2 Music 30% 23.7 Video 27% 19.1 Video 29% 22.8 FY 2015 FY 2016 Q2 Q2 5

6 FY2016 Q2 Highlights Operating Income 1.5 billion yen (+110.2%) increase YoY 2.9 (billions of yen) FY2014 Q2 FY2015 Q2 FY2016 Q2 6

7 FY2016 Q2 Highlights Operating Income Change by Segments Operating Income increased due to strong sales of high profit margin physical products and decreased Ads & Promo expenses in digital video distribution (billions of yen) FY2015 Q2 Music Video Management & Live Others + FY2016 Q2 Adjustment 7

8 FY2016 Q2 Highlights Net Income Attributable to Owners of Parent Net Income turned positive due to increased Operating Income (billions of yen) FY2014 Q2 FY2015 Q2 FY2016 Q2 8

9 Results by Segments 9

10 Music Business Highlights Net Sales and Operating Income decreased due to decreased sales of physical products & etc. (billions of yen) Music Business FY 2015 Q2 FY 2016 Q2 YoY rate Net Sales % Gross Profit % Gross Profit Margin 39.3% 34.2% -5.1pt - Operating Income % Operating Margin 6.4% 0.8% -5.6pt - (billions of yen) Sub- Segments Music Package Digital Music Distribution Music Publishing FY 2015 Q2 FY 2016 Q2 rate FY 2015 Q2 FY 2016 Q2 rate FY 2015 Q2 FY 2016 Q2 rate Net Sales % % % Gross Profit % % % GPM 37.7% 29.9% -7.8pt 54.2% 49.7% -4.5pt 35.4% 39.7% +4.3pt 10

11 Video Business Highlights Net Sales and Operating Income increased due to strong sales of high profit margin physical products and decreased Ads & Promo expenses in digital video distribution (billions of yen) Video Business FY 2015 Q2 FY 2016 Q2 YoY rate Net Sales % Gross Profit % Gross Profit Margin 16.2% 25.3% +9.1pt - Operating Income Operating Margin - 9.1% - - Sub- Segments Digital Video Distribution Video Package (billions of yen) FY 2015 Q2 FY 2016 Q2 rate FY 2015 Q2 FY 2016 Q2 rate Net Sales % % Gross Profit % % GPM 11.6% 15.2% +3.6pt 38.5% 42.4% +3.9pt 11

12 Video Business Highlights: Number of Video Distribution Subscribers (millions of people) (millions of people) FY 2015 FY 2016 Q1 Q2 Q3 Q4 Q1 Q2 FY 2015 FY 2016 Q1 Q2 Q3 Q4 Q1 Q2 12

13 Management & Live Business Highlights Net Sales increased mainly due to increase of live-related sales (billions of yen) Management & Live FY 2015 Q2 FY 2016 Q2 YoY rate Net Sales % Gross Profit % Gross Profit Margin 26.4% 23.7% -2.7pt - Operating Income % Operating Margin 5.6% 3.6% -2.0pt - Sub- Segments (billions of yen) Live Concerts Management Merchandising Fan Club FY 2015 Q2 FY 2016 Q2 rate FY 2015 Q2 FY 2016 Q2 rate FY 2015 Q2 FY 2016 Q2 rate FY 2015 Q2 FY 2016 Q2 rate Net Sales % % % % Gross Profit % % % % GPM 11.5% 9.0% -2.5pt 34.9% 28.3% -6.6pt 39.2% 40.1% +0.9pt 30.6% 29.4% -1.2pt 13

14 Management & Live Business Highlights: Number of Concerts Number of concerts & audiences have both increased Venue Size FY 2015 Q2 FY 2016 Q2 YoY Stadium class Arena class Hall & Live House class Total Audience 1.13M People 1.41M People +0.27M People Concert Ticket Average Price 8,769yen 8,411yen -358yen 14

15 Reference Data 15

16 Consolidated Income Statement Consolidated Income Statement (millions of yen) FY 2016 Guidance FY 2015 Q2 *Guidance FY 2016 Q2 YoY VS Guidance FY 2016 Net Sales 68,606 73,666 75,648 +7,042 +1, ,000 Cost of Sales 48,425 55,106 54,231 +5, ,700 Gross Profit 20,181 18,560 21,417 +1,236 +2,857 44,299 Gross Profit Margin 29.4% 25.2% 28.3% -1.1pt +3.1pt 28.6% Personnel Expenses 5,492 5,729 6, ,571 Sales promotion & Advertising Expenses 5,941 4,519 4,334-1, ,226 General Expenses 7,335 7,204 7, ,501 Total SG&A Expenses 18,768 17,453 18, ,299 Operating Income 1,412 1,106 2,967 +1,555 +1,860 6,000 Operating Margin 2.1% 1.5% 3.9% +1.8pt +2.4pt 3.9% Ordinary Income ,455 +2,253 +1,992 5,000 Net Income attributable to owners of the parent ,300 *Guidance was made public on May 11,

17 Music Business Income Statement Music Business (millions of yen) FY 2015 Q2 *Guidance FY 2016 Q2 YoY VS Guidance FY 2016 Net Sales 24,802 25,402 23,783-1,018-1,619 61,800 Cost of Sales 15,051-15, Gross Profit 9,751 8,607 8,139-1, ,501 Gross Profit Margin 39.3% 33.9% 34.2% -5.1pt +0.3pt 39.6% Personnel Expenses 1,327-1, Sales Promotion & Advertising Expenses FY 2016 Guidance 3,214-2, General Expenses 1,333-1, GMF 2,291-2, Total SG&A Expenses 8,166 7,461 7, ,911 Operating Income 1,584 1, , ,589 Operating Margin 6.4% 4.5% 0.8% -5.6pt -3.7pt 10.7% *Guidance was made public on May 11, 2016 GMF=Group Management Fee 17

18 Music Business: Results by Sub-Segments Music Package Digital Music Distribution Music Publishing (millions of yen) FY 2015 Q2 FY 2016 Q2 YoY Net Sales 15,587 14,472-1,114 Gross Profit 5,869 4,331-1,538 Gross Profit Margin 37.7% 29.9% -7.8pt FY 2015 Q2 FY 2016 Q2 YoY Net Sales 5,710 5, Gross Profit 3,093 2, Gross Profit Margin 54.2% 49.7% -4.5pt FY 2015 Q2 FY 2016 Q2 YoY Net Sales 1,583 1, Gross Profit Gross Profit Margin 35.4% 39.7% +4.3pt 18

19 Music Business: Results by Sub-Segments Other Businesses of Music (millions of yen) FY 2015 Q2 FY 2016 Q2 YoY Net Sales 1,969 2, Gross Profit 1,101 1, Gross Profit Margin 55.9% 58.9% +3.0pt Music Package Market (Jan.- Sep.) Digital Music Distribution Market (Jan.- Jun.) Music Market Data (Reference: Recording Industry Association of Japan) YoY 185, , % 22,881 25, % 19

20 Music Business: Indicators M u s i c D i g i t a l M u s i c * P a c k a g e D i s t r i b u t i o n Albums Singles DVDs / Blu-ray Discs Feature phone (Ringtones/Video Ringtones) Smartphone (Ringtones/Video Ringtones) Ring-back tones PC downloads mu-mo Music Business: Indicators FY 2015 Q2 FY 2016 Q2 Average Price ( ) 2,915 3,483 Units (thousands) 2,170 1,488 Average Price ( ) Units (thousands) 4,609 3,325 Average Price ( ) 6,090 5,965 Units (thousands) Average Price ( ) Downloads (thousands) Average Price ( ) Downloads (thousands) 4,956 4,063 Average Price ( ) Downloads (thousands) 4,480 4,365 Average Price ( ) Downloads (thousands) 5,197 5,628 ARPU ( ) Subscribers (thousands) *Music Package indicators consist of titles released in FY2016 and do not include back catalogs. 20

21 Music Business: Key Titles Released in FY2016 Q2(Apr.-Sep.) Artist Title CD Albums Copies (thousands)* Various Artists HiGH & LOW ORIGINAL BEST ALBUM 406 Kis-My-Ft2 I SCREAM 319 EXILE EXTREME BEST 280 Artist Title CD Singles Copies (thousands)* SKE48 Kinnoai,Ginnoai 428 Kis-My-Ft2 Sha la la Summer Time 330 EXILE ATSUSHI Beautiful Gorgeous Love -Exclusive Ver Artist Title DVDs / Blu-ray Discs Copies (thousands)* EXILE EXILE LIVE TOUR 2015 AMAZING WORLD 248 *Total Copies as of Sep. 30,

22 Video Business Income Statement Video Business (millions of yen) FY 2016 Guidance FY 2015 Q2 *Guidance FY 2016 Q2 YoY VS Guidance FY 2016 Net Sales 19,195 21,164 22,804 +3,609 +1,640 42,800 Cost of Sales 16,082-17, Gross Profit 3,113 3,365 5,760 +2,647 +2,394 6,928 Gross Profit Margin 16.2% 15.9% 25.3% +9.1pt +9.4pt 16.2% Personnel Expenses Sales Promotion & Advertising Expenses 2,338-1,289-1, General Expenses GMF 1,242-1, Total SG&A Expenses 4,310 3,841 3, ,658 Operating Income -1, ,081 +3,279 +2, Operating Margin % *Guidance was made public on May 11, 2016 GMF=Group Management Fee 22

23 Video Business: Results by Sub-Segments Digital Video Distribution (millions of yen) FY 2015 Q2 FY 2016 Q2 YoY Net Sales 16,091 14,649-1,441 Gross Profit 1,868 2, Gross Profit Margin 11.6% 15.2% +3.6pt dtv+beetv UULA DVDs / Blu-ray Discs* Video Package FY 2015 Q2 FY 2016 Q2 YoY Net Sales 5,122 10,373 +5,250 Gross Profit 1,971 4,402 +2,431 Gross Profit Margin 38.5% 42.4% +3.9pt Video Business: Indicators FY 2015 Q2 FY 2016 Q2 ARPU ( ) Subscribers (millions of people) dtv BeeTV ARPU ( ) Subscribers (millions of people) Average Price ( ) 5,532 5,345 Units (thousands) Less than 1 yen rounded up *DVDs / Blu-ray Discs indicators consist of titles released in FY2016 and do not include back catalogs. 23

24 Management & Live Business Income Statement Management & Live Business (millions of yen) FY 2015 Q2 *Guidance FY 2016 Q2 YoY VS Guidance FY 2016 Net Sales 26,436 27,804 30,238 +3,801 +2,434 53,000 Cost of Sales 19,449-23,080 +3, Gross Profit 6,986 6,479 7, ,581 Gross Profit Margin 26.4% 23.3% 23.7% -2.7pt +0.4pt 23.7% Personnel Expenses 1,394-1, Sales Promotion & Advertising Expenses FY 2016 Guidance General Expenses 1,695-1, GMF 2,073-2, Total SG&A Expenses 5,507 5,529 6, ,498 Operating Income 1, , ,083 Operating Margin 5.6% 3.4% 3.6% -2.0pt +0.2pt 2.0% *Guidance was made public on May 11, 2016 GMF=Group Management Fee 24

25 Management & Live Business: Results by Sub-Segments Live Concerts Management Merchandising Fan Club (millions of yen) FY 2015 Q2 FY 2016 Q2 YoY Net Sales 15,011 17,970 +2,958 Gross Profit 1,733 1, Gross Profit Margin 11.5% 9.0% -2.5pt FY 2015 Q2 FY 2016 Q2 YoY Net Sales 6,528 7,923 +1,395 Gross Profit 2,280 2, Gross Profit Margin 34.9% 28.3% -6.6pt FY 2015 Q2 FY 2016 Q2 YoY Net Sales 5,762 6, Gross Profit 2,259 2, Gross Profit Margin 39.2% 40.1% +0.9pt FY 2015 Q2 FY 2016 Q2 YoY Net Sales 2,372 2, Gross Profit Gross Profit Margin 30.6% 29.4% -1.2pt 25

26 Management & Live Business: Results by Sub-Segments Other Businesses of Management & Live Management & Live Business Indicators (millions of yen) FY 2015 Q2 FY 2016 Q2 YoY Net Sales Gross Profit Gross Profit Margin 17.1% 2.3% -14.8pt FY 2015 Q2 FY 2016 Q2 Concert Ticket Average Price( ) 8,769 8,411 Fan Club Subscribers (thousands of people) From this fiscal year, subscriber numbers do not include fan clubs operated under commission basis. Conditions applied to this fiscal year have been applied to previous fiscal year for fair comparison. 26

27 Other Businesses Income Statement Other Businesses (millions of yen) FY 2015 Q2 *Guidance FY 2016 Q2 YoY VS Guidance FY 2016 Net Sales 1,460 1,505 1, ,204 Cost of Sales Gross Profit ,612 Gross Profit Margin 48.6% 51.2% 52.0% +3.4pt +0.8pt 50.3% Personnel Expenses Sales Promotion & Advertising Expenses FY 2016 Guidance General Expenses GMF Total SG&A Expenses 1,057 1,251 1, ,491 Operating Income Operating Margin *Guidance was made public on May 11, 2016 GMF=Group Management Fee 27

28 Consolidated Balance Sheet Consolidated Balance Sheet (millions of yen) Mar.31, 2016 Sep.30, 2016 Mar.31, 2016 Sep.30, 2016 Current Assets 63,620 57,143 Current Liabilities 55,478 49,294 Cash and Deposits 21,107 22,358 Notes & Accounts Receivable-trade Inventories 8,526 6,419 Others 12,714 10,405 Notes & Accounts Payable-trade 2,020 1,871 21,271 17,959 Short-term Debt 9,220 9,040 Accounts Payable- Other Allowance for Returned Goods 24,356 19,832 4,163 4,119 Others 15,718 14,431 Noncurrent Assets 47,588 47,537 Noncurrent Liabilities 3,337 2,944 Tangible & Intangible Assets Total Investments & Other Assets 37,611 37,147 Liabilities for retirement benefits 2,126 1,873 9,976 10,390 Others 1,210 1,070 Investment Securities 5,310 5,853 Total Liabilities 58,816 52,239 Others 4,666 4,536 Total Net Assets 52,392 52,442 Total Assets 111, ,681 Total Liabilities & Net Assets 111, ,681 28

29 Consolidated Cash Flow Statement Consolidated Cash Flow Statement (millions of yen) (millions of yen) FY 2015 Q2 FY 2016 Q2 YoY Net Cash provided by Operating Activities -4,493 4,771 +9,265 Net Cash provided by Investing Activities -3,060-1,979 +1,081 Net Cash provided by Financing Activities -4,675-1,554 +3,120 Cash Flow Free Cash Flow Effect of exchange rate change on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period -12,229 1, ,466-7,553 2, , ,254 1, ,505 25,699 21,107-4,592 13,445 22,358 +8,912 29

30 Cautionary statement concerning forward-looking statements The forecasts for operating results and others contained in this release were prepared by management based on currently available data and information. Therefore, the forecasts include potential risks and uncertain elements. In particular, in the Group s business domain there are factors other than general economic conditions that may affect our performance. Please note, therefore, that actual results may greatly differ from the forecasts. Inquiries Avex Group Holdings Inc. Stocks & IR stock@av.avex.co.jp *Unless otherwise noted, the figures in this material are cutoff from fractions, and percentages (%) are rounded. 30