6. new business field 8.xml.irpocket.com/c4751/2017/q4presentation.pdf3.2 6.3 10.8 16.2 26.7 43.2...

8.

1. Overview of Full-year Results

Internet Advertisement Business

2. Business Forecast for FY2018

Game Business

Media Business

Summary

3.

4.

5.

6. New Business Field

7.

0. Table of Contents

・Overview of Quarterly Results・AbemaTV・Market Data

References

1

Overview of Full-year Results

(Oct.2016 – Sep. 2017)

2


Game

FY2017Results

Media

Ad

Sales: 371.3 billion yen up 19.5% YonY

OP: 30.7 billion yen (existing business* 51.6B yen, AbemaTV etc. -20.9B yen)

AbemaTV 18months after launch, about 5 million WAU**

Sales: 25.6 billion yen up 17.0% YonY

OP: -18.5 billion yen (Incl. AbemaTV etc. -20.9B yen)

Outpace the market growth, driven by smartphone adsSales: 208.1 billion yen up 18.7% YonY

OP: 18.7 billion yen up 23.5% YonY

Major titles performed well, expanding market shareSales: 140.3 billion yen up 14.4% YonY

OP: 26.5 billion yen down 13.0% YonY

3*Existing business: Internet Advertisement, Game and Ameba in Media and Investment Development business, etc. **WAU: Weekly Active User

Marked a record high sales and OP of existing business*


3.2 6.3 10.8 16.226.7

43.2

60.176.0

87.093.8 96.6

119.5

141.1

162.4

205.2

254.3

310.6

371.3

FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

371.3 billion yen (up19.5％ YonY)

Record high resultsSucceeded in shifting

to smartphone

[Full-year Consolidated Sales]

Unit: billion yen

4


-1.6 -0.1 -0.2 -0.1

1.7 2.64.3

5.5 4.6 4.4

9.3

14.3

17.4

10.3

22.2

35.0

46.7

51.6

-2.2

-9.9

-20.9

FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

OP of existing businesses ( Internet Advertisement, Game, Ameba in Media, Investment Development Business, etc.)

OP of up-front investment (AbemaTV, Inc. etc.)

10.4％ up YonY

OP of existing business 51.6 billion yen

Marked a record high

30.7B

Unit: billion yen

[Full-year Consolidated OP]

5


Unit: million yen FY2017 FY2016 YonY

　Net Sales 371,362 310,665 19.5%

　Gross profit 122,976 112,928 8.9%

　SG&A expenses 92,276 76,138 21.2%

　Operating profit 30,700 36,790 -16.6%

　OPM 8.3% 11.8% -3.6points

　Ordinary profit 28,741 35,341 -18.7%

　Extraordinary income 668 5,212 -87.2%

　Extraordinary loss 4,731 5,935 -20.3%

Income before income taxes and non-controlling interests 24,678 34,619 -28.7%

　Net profit* 4,024 13,612 -70.4%

[PL]

*Net profit: Profit attributable to shareholders of parent.Affected by the fact that AbemaTV, Inc. is exempted from consolidated tax payment, and non-controlling equity interest (minority interest) of Cygames, Inc. 6


Unit: million yen End of Sep 2017 End of Sep 2016 YonY

　Current assets 117,010 114,647 2.1%

　Cash deposits 46,614 51,774 -10.0%

　Fixed assets 46,998 41,950 12.0%

　Total assets 164,009 156,597 4.7%

　Current liabilities 62,799 62,137 1.1%

（ Income tax payable） 5,374 11,169 -51.9%

　Fixed liabilities 2,423 1,845 31.3%

　Net assets 98,785 92,614 6.7%

[BS]

7


5.8%5.1%

7.5%

5.2%

4.4%

FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

[DOE* FY2017]

Changes in DOE

*DOE：Dividend on Equity（ROE×Dividend payout ratio）

4.0%

5.2%

（Planned dividend）

***

8

Increased dividend from 25 yen to 32 yen** to achieve DOE at 5.2%(Total dividends paid will rise from 3.1 billion yen to 4 billion yen)

**Dividend of FY2017:We plan to discuss a surplus disposal plan at the annual General meeting of Shareholders to be held in December 2017.***To celebrate the market shift to the Tokyo Stock Exchange, commemorative dividend was conducted in FY2014.


Business Forecast for FY2018

(Oct. 2017 – Sep. 2018)


9

3.2 6.3 10.8 16.226.7

43.2

60.1

76.087.0

93.8 96.6

119.5

141.1

162.4

205.2

254.3

310.6

371.3

420.0

-1.6 -0.1 -0.2 -0.1

1.72.6

4.35.5

4.6 4.4

9.3

14.3

17.4

10.3

22.2

32.7

36.7

30.7 30.0

FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018E

Sales

OP

Remain in the up-front investment period for AbemaTV following FY2017


Sales 420.0 billion yen (up 13.1% YonY)

OP 30.0 billion yen (down 2.3% YonY)

Invest in Smartphone business Strengthen up-front

investment in AbemaTVInvest in

Blog service

10

Unit: billion yen

FY2017 FY2018

Up 12％ YonY

Keep up-front investment

FY2017FY2018


*Omit Investment Development Business, Other Business and inter-segment transfers.

[OP outlook by segment*]

Game

Internet Ad

Media ¥2.3B

¥26.5B

¥18.7B

Up-front Investment

ｰ¥20.9B ｰ¥20.0B

¥50.0B

Up-front Investment

ｰ¥20.0B

Existing Business

Game

Internet Ad

Media ¥3.0B

¥26.0B

¥21.0B

Up-front Investment

11

Conservative,consider volatility

Unit: million yen FY2018E FY2017 YonY

Net Sales 420,000 371,362 13.1%

Operating profit 30,000 30,700 -2.3%

Ordinary profit 28,000 28,741 -2.6%

Net profit* 5,000 4,024 24.2%

Dividend 32 yen 32 yen 0.0%**


12

[Business Forecast]

[Dividend Forecast]

*Net profit: Profit attributable to shareholders of parent.Affected by the fact that AbemaTV, Inc. is exempted from consolidated tax payment, and non-controlling equity interest (minority interest) of Cygames, Inc.

**Dividend of FY2017:We plan to discuss a surplus disposal plan at the annual General meeting of Shareholders to be held in December 2017.

InternetAdvertisement

3. Internet Advertisement Business

13

34.1

62.1

90.6

121.8

163.2

49.0

51.6

52.2

53.5

44.9

83.2

113.8

142.8

175.4

208.1

FY2013 FY2014 FY2015 FY2016 FY2017

PC・Others

Smartphone

8.39

9.12

11.52

15.16

18.71

FY2013 FY2014 FY2015 FY2016 FY2017

14


Unit: billion yen

Unit: billion yen

[Full-year Sales] [Full-year OP]

Driven by smartphone ads

18.7％UP YonY

*Segment change: The data of FY2016 were retroactively revised. (Advertisement Business of CA Mobile, Inc. is added)

Keep high OPM

23.5％UP YonY

7.0 8.1 8.310.5 11.5

15.1 16.418.9

20.7 21.7 22.725.3

26.929.3 29.5

35.937.8

39.940.7

44.6

12.512.5 11.6

12.312.9

14.8 12.0

11.9

12.513.4 12.7

13.513.7

14.3 13.5

11.910.9

12.6 10.3

11.0

19.620.7 19.9

22.824.4

29.928.5

30.9

33.335.1 35.5

38.840.7

43.7 43.0

47.948.7

52.551.0

55.7

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

FY2013 FY2014 FY2015 FY2016 FY2017

PC・Others

Smartphone


Smartphone ad ratio rose to 80% (up 5points YonY)

Unit: billion yen

[Quarterly Sales] 4Q 55.7 billion yen（up 16.3% YonY）

*Segment change: The data of FY2016 were retroactively revised. (Advertisement Business of CA Mobile, Inc. is added)15

7.08.1 8.3

10.511.5

15.116.4

18.9

20.721.7

22.7

25.326.9

29.3 29.5

35.9

37.8

39.940.7

44.6


FY2013 FY2014 FY2015 FY2016 FY2017

[Smartphone Ad] 4Q 44.6 billion yen（up 24.3% YonY）


Unit: billion yen

*Segment change: The data of FY2016 was retroactively revised. (Advertisement Business of CA Mobile, Inc. is added)

Continuously driven by In-feed Ads and Video Ads

16

0.18 0.26 0.360.61

0.97 1.01.3

1.9

2.63.1

3.4

5.86.1

7.7 7.7

10.8 10.7

11.911.6

12.6


FY2013 FY2014 FY2015 FY2016 FY2017


[Fortified field] In-feed Ad* 4Q 12.6 billion yen （up 15.8% YonY）

*In-feed Ads: Ads posted in the timeline of websites or apps, etc. Ad method used for SNS, curation, news media, etc.

Unit: billion yen

17

0.100.26 0.19 0.19 0.25

0.48 0.50 0.37 0.460.81 0.83

1.5

1.9

2.3

2.8

5.2 5.2

6.7

7.5

8.6


FY2013 FY2014 FY2015 FY2016 FY2017


[Fortified field] Video Ad 4Q 8.6 billion yen ( 1.6x YonY)

YouTube and in-feed video ads flourished.

Unit: billion yen

18

2.10 2.17

1.75

2.47

2.07

3.02

2.302.18

2.88

3.80

2.882.79

3.58

4.37

3.74

4.29

4.72

5.31

4.13

4.54

10.7%10.5%

8.8%

10.8%

8.5%10.1%

8.1% 7.1%8.6%

10.8%8.1%

7.2%8.8%

10.0%8.7% 9.0%

9.7% 10.1%8.1% 8.1%

0.01Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

FY2013 FY2014 FY2015 FY2016 FY2017

OP

OP Margin


*OP and OPM : Earnings incentive paid until FY2016 are excluded.

[Quarterly OP] 4Q 4.54 billion yen (up 5.7% YonY)

**Segment change: The data of FY2016 were retroactively revised. (Advertisement business of CA Mobile, Inc. is added)

Unit: billion yen

19

[FY2018 Plan]

Maximize advertising effectiveness by operating capability①

New client development②

Strengthen video ads③


20

Game

4. Game Business

21

8.26 8.47

17.87

30.45

26.50

FY2013 FY2014 FY2015 FY2016 FY2017

47.950.7

87.0

122.6

140.3

FY2013 FY2014 FY2015 FY2016 FY2017

Major titles performed well

14.4％ UP YonY

Advertising costs increased

13.0％ Down YonY

4. Game Business

Unit: billion yen Unit: billion yen

[Full-year Sales] [Full-year OP]

22

12.7 12.7

11.3 11.1 11.4

12.9 12.613.7

19.720.4 20.8

26.0

29.7

27.6

30.6

34.5 34.6

35.8

33.4

36.3


FY2013 FY2014 FY2015 FY2016 FY2017

FY2017

FY2016

FY2015

FY2014

FY2013

FY2012 or before

Others

Marked record high results, major titles went well

*Others in Sales : Sales of goods etc.

<Released Fiscal year>

4. Game Business

[Quarterly Sales] 4Q 36.3 billion yen (up 5.0% YonY, up 8.6% QonQ)

Unit: billion yen

*

23

0.91

2.11

2.80 2.69

2.05 2.30

1.47

2.99

4.77 4.60

3.66

6.07

8.83

6.93

8.31

7.51

6.45

7.91

6.89

5.23


FY2013 FY2014 FY2015 FY2016 FY2017

Advertising for BanG Dream! Girls Band Party!**, GRANBLUE FANTASY, Shadowverse, etc. stepped up

4. Game Business

[Quarterly OP] 4Q 5.2 billion yen (down 30.3% YonY, down 24.1% QonQ)

Unit: billion yen

*OP : Earnings incentive paid until FY2016 are excluded.** BanG Dream! Girls Band Party! : ©BanG Dream! Project ©Craft Egg Inc. ©bushiroad All Rights Reserved 24

9月3月9月3月9月3月9月3月9月

1st

4. Game Business

[Sales ranking] 7 major titles performed well

Shadowverse

BanG Dream! Girls Band Party! ***

10th

100th

30th

THE iDOLM@STERCINDERELLA GIRLS STARLIGHT STAGE*

Sengoku Enbu-KIZNA-

GRANBLUEFANTASY

Dragon Quest Monsters

Super Light**

* THE iDOLM@STER CINDERELLA GIRLS STARLIGHT STAGE : ©BANDAI NAMCO Entertainment Inc. It was jointly developed and is operated by ©BANDAI NAMCO Entertainment Inc. and Cygames, Inc.** Dragon Quest Monsters Super Light : © 2014-2017 ARMOR PROJECT/BIRD STUDIO/SQUARE ENIX All Rights Reserved.© SUGIYAMA KOBO Developed by Cygames, Inc.*** BanG Dream! Girls Band Party! : ©BanG Dream! Project ©Craft Egg Inc. ©bushiroad All Rights Reserved**** Sales ranking calculates the App Store top sales ranking from AppDB. Monthly average values in ranking is used. (For October, use average until October 2)

Joker～Gang Road～

Sep. Sep. Sep. Sep.Mar. Mar. Mar. Mar.2014 2015 2016 2017

25

Sep.

[New titles]

PRINCESS CONNECT！Re:DiveAuthentic Role Battle

10 titles will come after FY2018

LOST ORDERReal tactics game

Provided by Cygames, Inc.

Provided by Cygames, Inc.

Pre-registration

Pre-registration

Animation RPG

4. Game Business

SENGOKU ASURA Provided by Sumzup, Inc.

26

7 other titles are under development

[FY2018 Plan]

Keep creating New hit titles①

Strengthen operation of existing titles②

Focus on working with third party IP following original IP③

4. Game Business

27

Media

5. Media Business

28

0.82 0.71

0.30 0.49 0.47

0.66 0.51

0.67

-0.14

-0.68

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

FY2016 FY2017

5.8

5.35.0

5.75.9

6.4 6.4

6.8

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

FY2016 FY2017ｰ5.7

ｰ3.4

ｰ4.8ｰ5.0

ｰ5.8

Up-front investmentFY2016

ー9.96B

FY2016

21.9BFY2017

25.6B

Up-front investmentFY2017

ー20.9B

ｰ5.2

Unit：billion yen

5. Media Business

[Quarterly Sales]4Q 6.8 billion yen (up 19.2% YonY)

[Quarterly OP]4Q up-front investment -4.8 billion yen

*OP : Earnings incentive paid until FY2016 are excluded.

Online dating service went well

Unit：billion yen

29

Apr. Jun. Sep. Dec. Mar. Jun. Sep.

22MDL

April 11Release

5. Media Business

Exceeded 22 million downloads in 18 months after its launch

Unit：DL

30

8.23

9.43

2.48

3.503.64

5.04

5.45

5.93 5.85 5.83

6.86

8.40

7.247.53

9.16

9.60

8.91

9.48

1.18

2.67

2.69

4.75

3.52

5.505.68

4.18

5.10

4.52

Apr. May. Sep. Dec. Mar. Jun. Sep.

Unit：million of user

[AbemaTV]

Unit：million of user

*MAU： Users per month measured by Google Analytics**WAU：Users per week measured by Google Analytics

5. Media Business

Change of MAU* Change of WAU**

9.48 million MAU

31

User base increased after each peak

©AbemaTV

[AbemaTV] Made more original regular programs to accustom users to watch AbemaTV

A spin-off from the special program “Win 10 million yen, if you could beat Koki Kameda”

5. Media Business

32

Dating reality show of high school students

©AbemaTV

5. Media Business

33

[AbemaTV] Prime Minister Shinzo Abe appeared in the live talk show “Toru’s Room”

Live starts at 9pm on Sunday, October 8

Host: Toru Kenjo CEO, GENTOSHA, INCGuest: The 97th Prime Minister Shinzo Abe

39%61%

36%

64%

Users by gender**

Age 25-34

Age 18-24

Age 35-44

Age 45-54

Age 55-64

March2017

September2017

♂♀

♂ ♀

2016 2017

Users by age group*

5. Media Business

*Users by age group: Age of users watching for more than five minutes measured by Google Analytics (functionally impossible to measure under the age of 18) **Users by gender: Gender of users watching for more than five minutes measured by Google Analytics (functionally impossible to measure under the age of 18)

[AbemaTV]

34

A whole generation of users lifted up, especially younger users

Female ratio is around 40%, driven by dating reality shows etc.

Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep.2016 2017

Video service MAU Comparison*

[AbemaTV]

5. Media Business

*Video service MAU comparison: Made into a graph with data from VALUES eMark+ an internet access log analysis service which monitors nationwide user’s log provided by VALUES, inc.

AbemaTV

TVer

AmazonPrimeVideo

niconico

HuluVideoPass

Netflix

dTV

DAZN

35

Increased by popular programs which generated hot topics

FY2016

Up-front Investment phase

Launch

Apr. Oct.

FY2018FY2017

Oct.

3. Diversify revenue

2. Increase advertising sales

1. Strengthen content

[Road map to FY2018]

3. Provide 24 hours programming

2. Create original shows

1. Materialize comfortable UI/UX

5. Media Business

36

Pump up sales and content costsStep into growth phase

Feeling positive response after trial and error

[Plan after 1Q]

72 hours straight live show by popular Japanese pop artists1.Strengthen

content

©AbemaTV

5. Media Business

37

©AbemaTV

Running main programs of TV Asahi following “Hodo Station”

5. Media Business

38

[Plan after 1Q]

“Hodo Station” on AbemaTV start!

“Hatori Shinichi’s Morning Show” on AbemaTV start!

1.Strengthen content

Start creating original dramas leading to users’ watching habit

“Ayaka the Hostess” Ayaka is working part-time as hostess in a nightclub and handle troubleshooting of guests.Every Monday, 10pmJointly produced by Asahi Broadcasting Corporation and AbemaTV.

“#like an angel in voice” A story of 4 friends who are young, passionate to be a voice actor. describing friendship, love, failure and hope. Planned to broadcast in January 2018

COMINGSOON

©AbemaTV

(c) Cygames, Inc. (c) Yu Tsunamino.

5. Media Business

39

[Plan after 1Q]

“Tadano Hitoshi, An assistant manager with special assignment”Hitoshi is a redundant assistant manager in the Advertising Agency. But secretly he has another face as a right-hand man of chairman. Planned to broadcast five nights straight at the end of the year

“Monologue of two” A high school comedy about two girls who used to be friends when they were kids. Every Monday, 10:30pm

COMINGSOON


Make more reality shows focus on the young

“Popular comedian Tamura Atsushi crams for university entrance exam”Every Saturday, 10pm

©AbemaTV

“Marriculum”How to get marry in 1 month after encounterStart on November 16. Every Thursday, 11pm

5. Media Business

40

[Plan after 1Q]

“Fell in love today” 8 high school students spend 2 days together to begin love. Every Monday, 11pm

“Weekend Homestay”2 city girls spend a weekend with 2 boys from Okinawa. Every Tuesday, 11 pm

“Proxy war of fighters”Reality show of fighting sports. Masato, former winner of K-1 WORLD tournament and other famous fighters recommend new comers to fight in tournament play to win 3 million yen.

Start on November 12. Every Sunday, 11pm


• Deliver high advertising effect with passive watching style• Enable reaching not-watching-TV group

2.Increase advertising

sales

Average View-Through Rate of commercials* Frequency rate of watching TV (“AbemaTV” user)**

Low

Middle

HighWatch TV always, frequently

43％

29％20％

80％28％

*Average View-Through Rate of commercials: “AbemaTV” results through September 2017** Frequency rate of watching TV (“AbemaTV” user): “Research on ‘AbemaTV’ user” June 2017, conducted by Macromill, Inc

Complete

Incomplete

5. Media Business

41

[Plan after 1Q]

Watch TV rarely, don’t watch, Don’t have TV

Watch TV sometimes

Non-broadcast revenue

Increasing IPs

Synergy of group networks

Working with Partner Companies

M&A

Anime fund

esports DDTPro Wrestling

5. Media Business

42

3.Diversify revenues

[Plan after 1Q]

Expand businesses around “AbemaTV”

Aims to be a mass media

[Future Plans of AbemaTV]

1

2

3

10MWAU

5. Media Business

Continues up-front investment in FY2018

Establishes the business modelwith no competitor as a pioneer

Gives the first priority to strengthen the contents

43

New Business Field

6．New Business Field

44

mimi

TorteLaunched in Aug. 2017

CROSS MELaunched in Aug. 2016

A dating service that links people up by hobbies.Surpassed 2.5 million members.

A dating service that recommends someone via their unique face type.

A dating service that pushes girls to move on to start a relationship.

Tapple Launched in May 2014


45

1. Dating Service Developing actively in the growing market

A dating service that utilizes information on where you are to help find love with people you cross paths with.

Launched in Dec. 2016

9月3月9月3月9月3月 9月3月9月3月9月3月

1st

100th

2015 2016

50th

2017

Tapple

Pairs

Omiai


46

Sep. Sep. Sep.Mar. Mar. Mar.

1. Dating Service Tapple grew as one of the largest dating apps in the nation

Competitor comparison of sales ranking*

*Sales comparison of sales ranking: Picked up services from App Store Top Grossing Ranking (monthly average) provided by AppDB.

* RAGE Shadowverse Wonderland Dreams GRAND FINALS on September 18, 2017

Running an esports event “RAGE” that draws more than 10,000 participants*. RAGE


47

2. Esports Expecting the market to grow following the world

Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep.

OPENREC.tv Changes in MAU

2015 2016 2017


48

1.60Musers

2. EsportsOPENREC.tv became one of the largest gameplay video streaming platforms in the country

Live streaming of gameplay, narrated gameplay video, “cheer function” that enable users to cheer for the creator are provided.

FY2018春より

開始予定

Aims at starting business in Spring 2018

*Virtual currency exchange : is supposed to be registered at the Financial Services Agency.


49

Established CyberAgent Bitcoin, Inc. on October 2, 2017.

Operate a virtual currency exchange*

3. Virtual currency business

Summary

50

7. Summary

Aim to increase growth rate in excess of market growth

Produce hit titles continuallyand expand our market share

Establish AbemaTV for mass media Media

Ad

Game

Develop Media Business as a main pillar in the mid/long term

51

7. Summary

[Operating Profit (Image)]

To accumulate profit through the AD Business and Game Business, invest in the Media Business, and grow it as a pillar in the mid to long terms.

52

AD Business

Game Business

Media Business

7. Summary

10.5

9.5

14.7

13.6

4.0

0

3

6

9

12

15

26.6%

39.4%

21.2%23.1%

100.0%

0%

20%

40%

60%

80%

100%

5.1%

7.5%

5.2%

4.4%

5.2%

0%

10%

20%

45.5

54.5

66.7

77.178.9

0.0

20.0

40.0

60.0

80.0

100.0

24.0%

19.1%

24.4%

18.9%

5.2%

0%

12%

24%

10.3

22.2

32.7

36.7

30.7

0.0

18.0

36.0

OP ROE※※ DOEDividend RatioNet Profit Shareholders’ equity

Management index DOE 5% or more as a guide

More than

5％

53

*The total dividend amount for the term ended Sep. 2014 includes a commemorative dividend of 20 yen/share.**Net profit: Profit attributable to shareholders of parent.***DOE: Dividend on Equity (ROE×Dividend payout ratio) ****The unit of OP and net profit, shareholders’ equity: billion yen

7. Summary

Aim to be a company that is supportedin the medium to long term

54

References

55

8. References

8. References: Overview of Quarterly Results

56

Overview of Quarterly Results

(Jul.– Sep. 2017)

40.8 41.3

38.0

42.243.7

52.4 51.2

57.7

63.460.5 61.1

69.2

74.0 74.676.4

85.6 86.5

93.3

89.5

101.8


FY2013 FY2014 FY2015 FY2016 FY2017

[Quarterly Consolidated Sales]

Unit: billion yen

57

Marked a record high quarterly sales,

exceeded 101.8 billion yen.

Up 19.0% YonY


-0.44 -0.91 -0.71 -0.20 -0.14 -0.68

-3.4

-5.7

-5.0

-5.8

-5.2-4.8

1.5

3.6

1.6

3.5

4.2

6.5

4.0

9.3

12.9

9.1

6.9

5.9

13.1

11.9 11.7

9.9

11.4

13.7

11.8

14.6


FY2013 FY2014 FY2015 FY2016 FY2017

OP of existing businesses ( Advertisement Business, Game Business, Ameba in Media Business, Investment business, etc.)

OP of up-front investment (AbemaTV, Inc. etc.)

9.81B

Unit: billion yen

[Quarterly OP]

58

Recorded gain on sale of investment securities,

4Q 9.81 billion yen. UP 2.3X YonY


4.3

2.4 2.91.7 2.2 2.8 3.5

1.9 2.6 3.1 3.6 4.0 4.4 4.4

6.5

9.99.1

7.96.7

8.1

3.7

3.63.8

3.83.9

4.34.6

4.64.6

5.05.3 5.1 5.0 5.5

5.5

5.35.8

6.6

6.4

7.6

0.8

0.80.8

0.80.9

0.9

0.9

1.01.0

1.01.1 1.2 1.2

1.2

1.3

1.4 1.51.5

1.6

1.7

1.7

1.71.5

1.51.0

1.2

1.2

1.31.3

1.2

1.2 1.3 1.41.2

1.3

1.2 1.2 1.3

1.1

1.2

2.6

2.32.4

2.4 2.5

2.5

2.5

2.53.0

2.9

3.13.5

3.5 3.5

3.9

4.4 5.25.2

5.6

6.1

0.7

2.0

3.4

3.1

13.3

11.011.6

11.1 10.7

11.813.0

13.512.7

13.4

14.4

18.8

15.6 16.0

18.7

25.6

23.0 22.6

21.6

24.9


FY2013 FY2014 FY2015 FY2016 FY2017

Earnings Incentives

Other

Sales related costs

Office costs

Personnel

Advertisement cost

Unit: billion yen

[Quarterly SG&A Expenses] 24.9 billion yen （down 2.4% YonY）

59


82 107 148 160 182 192 213 215

954 9481,081 1,039 1,001 977 1,018

638372 356 414 400

412 392 430 436 440 432 468 445

473 437490 510 543 567

642

688955 1,011

1,090 1,1321,149 1,139

1,215 1,253 1,272 1,2671,330 1,346

637 635

711 717 772 807

957

977 981 985

1,098 1,121

1,392 1,401

1,530 1,539 1,560 1,633

1,802 1,778

328 336

348 358 373 372

393

523 505 510

574 582

263 266

259267

285301

357 406

92 111

117 110 103 107

121308 322 288

302296 303 297

290297

296310

335 336

27 22

30 30 33 32

34 34 33 33

3335

22 21

2219

1918

18 17

2,511 2,489

2,777 2,764 2,825 2,862

3,165 3,168 3,168 3,183

3,511 3,566 3,623 3,623

3,8943,971

4,0544,153

4,5234,543


FY2013 FY2014 FY2015 FY2016 FY2017

Investment Development

Headquarters

Other

Internet Ad

Game

Media(exsisting business)

Media(up-front Investment business)

Unit: people

* The results for FY2015 were retroactively revised, according to the new segments adopted in FY2016. (Mainly Ameba game business moves to Game Business segment).

[No. of Employees]

60


Unit: million yen FY2017 4QJul-Sep 2017

FY2016 4QJul-Sep 2016

YonY FY2017 3QApr-Jun 2017

QonQ

　Net Sales 101,876 85,616 19.0% 89,593 13.7%

　Gross profit 34,790 29,824 16.7% 28,200 23.4%

　SG&A expenses 24,978 25,603 -2.4% 21,619 15.5%

　Operating profit 9,811 4,220 132.5% 6,581 49.1%

　OPM 9.6% 4.9% 4.7points 7.3% 2.3points

　Ordinary profit 9,337 3,541 163.6% 6,057 54.1%

　Extraordinary income 91 3,436 -97.3% 256 -64.3%

　Extraordinary loss 2,517 1,091 130.6% 698 260.4%

Income before income taxes and non-controlling interests 6,911 5,886 17.4% 5,615 23.1%

　Net profit* 1,015 1,317 -23.0% 380 166.8%

[PL]

61*Net profit: Profit attributable to shareholders of parent.Affected by the fact that AbemaTV, Inc. is exempted from consolidated tax payment, and non-controlling equity interest (minority interest) of Cygames, Inc.


Unit: million yenEnd of

Sep 2017End of

sep 2016YonY

End ofJun 2017

QonQ

　Current assets 117,010 114,647 2.1% 101,917 14.8%

　Cash deposits 46,614 51,774 -10.0% 37,055 25.8%

　Fixed assets 46,998 41,950 12.0% 46,895 0.2%

　Total assets 164,009 156,597 4.7% 148,812 10.2%

　Current liabilities 62,799 62,137 1.1% 49,705 26.3%

（Income tax payable） 5,374 11,169 -51.9% 2,203 143.9%

　Fixed liabilities 2,423 1,845 31.3% 2,265 7.0%

　Net assets 98,785 92,614 6.7% 96,841 2.0%

[BS]

62


April 11, 2016 Official launch

8. References : AbemaTV

What is AbemaTV?

63

AbemaTV 4 features

AbemaTV 4 Strengths

FREE24H

OperationAbout 25 channels

Target Young

Generation

Device by device

UI・UX

0 sec play Watch

smoothly

Various contents

TV like quality

64


etc.

NewsVariety Shows

Anime

Drama

Sports

Hobbies

News

SPECIAL Variety shows

Mid-night Anime

Family Anime

24/7 Anime New Anime

NostalgicAnime

Drama Korean・Chinese

FightingSportsGolf Sports

Fishing

Mar-jong

MTV

HIPHOP

Japanese Chess

About25Channels

Documentary

65

K-Drama Reality Shows


AmazonPrimeVideo

Hulu dTV

DAZN

Netflix

Pay

Linear

On demand

Video Service Comparison*

VideoPass

AbemaVideo

niconico

TVer

Free

[AbemaTV]

A business model that has no competitor

*Video Service Comparison: Created based on the main business model of each video services searched at the end of June,2017.66


[Competitive Advantage]

TV-quality programs

Technical ability to create a service with high usability2

3 Healthy existing businesses backfinancial stability to invest

67

1


60%

70%

80%

90%

100%

1995 2000 2005 2010 2015

People in their 10s to 40s watch TV less frequently than before.

67%

33%

50%50%

41%59%

28%

72%

**Internet video audience: Survey by NHK “Japanese people and TV 2015”; 35% of those who watch TV several days or more per year watch TV one day or more per week.

■ Trend in TV watching time weekdaymore than 15 min/day*

*Trend in TV watching time weekday more than 15 min/day:Calculate using “National life time research 2015” by NHK Broadcasting Culture Research Institute Media Research & Studies

30s

40s

2010 2015■ Do not watch ■ Watch

60%

59%

50s

13%

19%

30%

47%

87%

81%

70%

53%

16~29years old

20s

30s10s

40s

50s

60s

[Internet video audience ]Trend in TV watching time Internet video audience**

68


The “App Ape Award” is a ceremony organized by Fuller, Inc. with “App Ape” the app analytics platform to celebrate and fete developers of the most popular applications in 2016.Among the other 100 apps, Abema TV received “App of the year 2016” as the most notable apps that received massive popularity in terms of new subscription .

App Ape Award “App of the year 2016”

Good Design Award 2016**

Reasons AbemaTV received the awardUnlike previous TV apps, the broadcast begins effortlessly as soon as the app is launched, with controls nearly the same as an ordinary TV.

Also, the design utilizes the advantages of a smartphone, such as quickly changing channels with a side swipe, or controlling the program listings with a touch.The service style is also new, combining 24-hour streaming of paid on-demand content, and free live streaming.

“Best App” Award in Google Play’s“Best of 2016” Ranking (Japan Edition)

The “Best of 2016” in Japan is Google’s program to select and recognize with awards the titles that was popular in Japan during the year. AbemaTV received "Best App in 2016" from among 39 nominated applications

*Top Video Streaming Apps* by MAU: State of Video Streaming Apps in Asia, July 2017, App Annie **Good Design Award 2016 : The “General Design Recommendation System” sponsored by the Japan Institute of Design Promotion

69


順位項⽬1 YouTube2 AbemaTV3 niconico4 Amazon Video5 Tver

動画ストリーミングアプリMAUランキング※ 第2位

Ranked 2nd in Top Video Streaming Apps* by MAU

8. References: Market Data

Market Data

70

2,041.1 2,016.1 1,998.11,909.2

1,713.9 1,732.1 1,723.71,775.7 1,791.3

1,834.7 1,808.8 1,837.4

377.7482.6

600.3698.3 706.9

774.7 806.2868.0

938.11,051.9

1,159.4

1,310.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

[Variation in Ad Cost by Media*]

*Variation in Ad Cost by Media: Dentsu, Inc. Ad cost in Japan in 2016.** Forecast of the global advertising market: Zenith. Advertising Expenditure Forecasts September 2016 .*** The Internet ad cost: Ad production expenses are included.

TV

Internet

Newspapers

Magazines

Radio

Up

13.0%YonY

Unit: billion yen

71

Domestic Internet advertising market keeps high growth rate and surpassed 1.3 trillion yen. In global advertising market**, internet advertising may overtake TV advertising in 2017.


21％

80.0

207.3

345.0

497.9

647.6

801.0

2012 2013 2014 2015 2016 2017E

YonY

Up30.1%

YonY

Up23.7%

[Our share][Smartphone Ad Market*]

Smartphone Ad Market

2016

*Smartphone Ad Market: Internet Ad Market Size Estimate (Jan-Dec 2016) – Originally estimated by D2C/CCI

Unit：billion yen

72


38.0

76.8

140.1

187.5

221.2

247.6

268.4

285.4

301.3

2014 2015 2016 2017E 2018E 2019E 2020E 2021E 2022E

27％YonY

Up33.8%

YonY

Up18.0%

YonY

Up11.9%

YonY

Up82.4%

[In-feed Ad Market*] [Our share]

*In-feed Ad Market：Surveyed by CyberAgent, Inc. / Seed Planning Digital InFact, February 9, 2017 © CyberAgent, Inc. All rights Reserved.

In-feed Ad Market2016

Unit：billion yen

73


19％

YonY

Up57.4%

YonY

Up39.9%

YonY

Up29.9%

YonY

Up25.9%

[Our share][Video Ad Market]

Video Ad Market2016

*Video Ad Market：Online video reserch / Digital InFact, November 9, 2016 © CyberAgent, Inc. All rights Reserved.

Unit：billion yen

31.7

53.5

84.2

117.8

153

192.6

230.9

262.5

291.8

2014 2015 2016E 2017E 2018E 2019E 2020E 2021E 2022E

.0

74


2012 2013 2014 2015 2016

*Growth transition: Growth rate based on setting 2012 as “100”**Internet Ad Market: “Advertising Expenditures in Japan 2016” by Dentsu, Inc.

InternetAd Market

100

[Market Comparison] Sales growth exceeds market growth

75


325

493

696

1,488

2015 2016 2017 2018 2019 2020

YonY

Up 51.7%

YonY

Up 41.3%

*Esports Market：「2017 GLOBAL ESPORTS MARKET REPORT」Newzoo


[Esports Market*]

Unit：million USD

76

48.0

261.0

560.0

895.0925.0

945.0 960.0

0.8%

8.4% 8.0%6.2%

10.2%

13.1%

0.0%02011 2012 2013 2014 2015 2016E 2017E

Smartphone Game Market

Our share

Rank Country Revenue

1 China 24.3

2UnitedStates

23.5

3 Japan 12.4

4 Germany 4.1

5 South Korea 4.1

6 United Kingdom 3.9

7 France 2.8

8 Canada 1.8

9 Spain 1.8

10 Italy 1.7

Unit：billion USD


[Smartphone Game Market*] [Game Market by Country**]

*Smartphone Game Market: Yano Research Institute Ltd, Market trend and prospect analysis of smartphone game market 2017**Game Market by Country: Newzoo global game revenue estimates for 2016

Unit：billion yen

YonY

Up2.2%

YonY

Up1.6%

77

YonY

Up19.0%

YonY

Up13.8%

YonY

Up10.2%

[The number of paid video streaming service users*]

*The number of paid video streaming service users: ICT Research & Consulting , Trend of Pay Video Streaming Service Usage 2016. Calculated based on the estimates of the number of flat rate and pay-per-view users

Unit：10,000 users

78

790

980

1,160

1,380

1,570

1,730

2014 2015 2016E 2017E 2018E 2019E


YonY

Up30.0%

YonY

Up33.3%

YonY

Up31.3%

YonY

Up34.4%

[Online Dating, Matchmaking Service Market*]

*Online Dating, Matchmaking Service Market: Market scale is calculated for a total value of usage fee of the services paid by users. Source: MatchingAgent, Inc. / Digital InFact, Inc.**Definition of Online Dating, Matchmaking Service: Online dating, matchmaking service is a service that introduces romance or marriage partners online. It excludes services with low ethics that are appealing "sexual encounters" such as dating sites and those with high confidentiality of user information disclosed on the service.

Unit：billion yen

12.015.6

20.8

27.3

36.7

45.1

51.7

57.7

2015 2016E 2017E 2018E 2019E 2020E 2021E 2022E

79


The financial results of 1Q FY2018 are scheduled to be released at 15:00 or later on Thursday, January 25, 2018.

[Forward-looking statement]

The future information, such as earnings forecast, written in this document is based on our expectations and assumptions as of the date the forecast was made. Our actual results could differ materially from those described in this forecast because of various risks and uncertainties.

80

6. new business field 8.xml.irpocket.com/c4751/2017/q4presentation.pdf3.2 6.3 10.8 16.2 26.7 43.2...

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