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Page 1: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019
Page 2: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 2

1. Overview of Results for FYE May 2019

2. FYE May 2019 Review

3. The Future Industry Environment and the UUUM Long-Term Vision

4. FYE May 2020 Forecast

INDEX

Page 3: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 3

Overview of Results for FYE May 2019

3Copyright © UUUM Co.,Ltd. All rights reserved.

Page 4: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 4

Earnings Highlights, Q4 FYE May 2019

(million yen)

Q4, FYE May 2019(Mar.2019-May.2019)

Q4, FYE May 2018(Mar.2018-May.2018) Year-on-Year

Net Sales 6,233 3,768 165%

Gross Profit 1,651 1,069 154%

SG&A 1,401 812 173%

Operating Profit 250 257 97%

Net Income 271 149 182%

Page 5: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 5

Earnings Highlights, FYE May 2019

(million yen)

FYE May 2019Full year results

FYE May 2018Full year results

Year on year

FYE May 2019 plan (As of Jan. 2019)

Versus plan

Net Sales 19,726 11,736 168% 19,000 104%

Gross Profit 5,407 3,405 159% 5,300 102%

SG&A 4,160 2,688 155% 4,200 99%

Operating Profit 1,247 717 174% 1,100 113%

(Op. margin) (6.3%) (6.1%) (5.8%)

Net Income 889 406 219% 660 135%

Page 6: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 6

735 829 1,110 1,358 1,290 1,381 1,755

2,254 2,382 2,803 3,020

3,484

480 423 549

749 781 718

957

1,202 1,133 1,156

1,107

1,474

98 71 177

104 212 294

292

225 548

432 427

796

73 62

84 82 106 91

90

86 114

178 194

479

Q1, FYEMay 2017

Q2, FYEMay 2017

Q3, FYEMay 2017

Q4, FYEMay 2017

Q1, FYEMay 2018

Q2, FYEMay 2018

Q3, FYEMay 2018

Q4, FYEMay 2018

Q1, FYEMay 2019

Q2, FYEMay 2019

Q3, FYEMay 2019

Q4, FYEMay 2019

UUUM services (UUUM owned channels, games, etc.)Creator Support, Other (merchandise, events, music, etc.)Advertising (sponsored video, etc.)AdSense (YouTube revenues)

Sales by Quarter

We achieved sales growth in Q4, posting a year-on-year 165% increase. (Units: million yen)

1,385 1,3851,921

2,293 2,388 2,4853,094

3,7684,177

4,569

6,233

4,747

Page 7: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 7

Gross Profit by Quarter

Q4 gross profit increased with the increase in sales, achieving year-on-year growth of 154%.

398 364

532617

727 744864

1,069 1,202

1,272 1,282

1,651

Q1, FYEMay 2017

Q2, FYEMay 2017

Q3, FYEMay 2017

Q4, FYEMay 2017

Q1, FYEMay 2018

Q2, FYEMay 2018

Q3, FYEMay 2018

Q4, FYEMay 2018

Q1, FYEMay 2019

Q2, FYEMay 2019

Q3, FYEMay 2019

Q4, FYEMay 2019

(Units: million yen)

Page 8: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 8

129 162 191 265 293 302 344 368 431 494 515617

16 29 3958 58 61 63 67

7277 77

84

105 55 44 35 3931

14 39

100

23

52 68 49 72 9895 79

93

236

825

25

5880 97

194 137 146150

240246 204

255

339

Q1, FYEMay 2017

Q2, FYEMay 2017

Q3, FYEMay 2017

Q4, FYEMay 2017

Q1, FYEMay 2018

Q2, FYEMay 2018

Q3, FYEMay 2018

Q4, FYEMay 2018

Q1, FYEMay 2019

Q2, FYEMay 2019

Q3, FYEMay 2019

Q4, FYEMay 2019

Other expenseAmortization related to acquisitionContracting expenseAdvertising and promotion expenseRent expensePersonnel expense

224304 351

673610

(Including 57 in new business-

related expenses)

603(Including 31 in new business-

related expenses)

664(Including 60 in new business-

related expenses)

812(Including 72 in new business-

related expenses)

875(Including 61 in new business-

related expenses)

877(Including 37 in new business-

related expenses)

1,005(Including 61 in new business-

related expenses)

1,401(Including 115 in

new business-related expenses)

Q4 SG&A rose year on year, mainly due to personnel expense, advertising and promotion expense for Lemonade sales promotions, and contracting expense in connection with new businesses.

Selling, General, and Administrative Expenses by Quarter

(Units: million yen)

Page 9: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 9

Operating Profit by Quarter

Q4 operating profit 97% versus prior year, mainly due to an increase in SG&A for new businesses and sales promotions. These higher expenses offset increased gross profit.

17461

181

-57

117 142 200 257 326 395276 250

Q1, FYEMay 2017

Q2, FYEMay 2017

Q3, FYEMay 2017

Q4, FYEMay 2017

Q1, FYEMay 2018

Q2, FYEMay 2018

Q3, FYEMay 2018

Q4, FYEMay 2018

Q1, FYEMay 2019

Q2, FYEMay 2019

Q3, FYEMay 2019

Q4, FYEMay 2019

Gross profit

SG&A

(Units: million yen)

Page 10: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 10

Employees and Temporary Employees, End of Quarter

104 127 143 152 175 195 214 249 276 297 318

385

3 5

6 9 16

22 17

26 28

37 31

24

107 132 149 161

191 217 231

275 304

334 349

409

Q1, FYEMay 2017

Q2, FYEMay 2017

Q3, FYEMay 2017

Q4, FYEMay 2017

Q1, FYEMay 2018

Q2, FYEMay 2018

Q3, FYEMay 2018

Q4, FYEMay 2018

Q1, FYEMay 2019

Q2, FYEMay 2019

Q3, FYEMay 2019

Q4, FYEMay 2019

Temorary employees

Employees (including directors)

(Units: employees)

Page 11: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 11

Trend in Number of Affiliated Channels at End of the Quarter and Three-Month Total Number of Video Views

863 1,0871,589

2,0332,602 2,895

3,8394,510

5,011 5,249

6,2286,743

7,446 7,592

9,136 9,489

10,706

9,532

11,04411,221

52 63782 1,141 1,290 1,460 1,744

2,2092,871

3,4314,066 4,430 4,731 5,020 5,252

5,8776,538

7,0907,586

8,115

Q1, FYE

May 2015

Q2, FYE

May 2015

Q3, FYE

May 2015

Q4, FYE

May 2015

Q1, FYE

May 2016

Q2, FYE

May 2016

Q3, FYE

May 2016

Q4, FYE

May 2016

Q1, FYE

May 2017

Q2, FYE

May 2017

Q3, FYE

May 2017

Q4, FYE

May 2017

Q1, FYE

May 2018

Q2, FYE

May 2018

Q3, FYE

May 2018

Q4, FYE

May 2018

Q1, FYE

May 2019

Q2, FYE

May 2019

Q3, FYE

May 2019

Q4, FYE

May 2019

Total video views in 3 months (millions)

Number of channels, end of period

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Copyright © UUUM Co.,Ltd. All rights reserved. 12

1はじめしゃちょー(hajime) 8,021,769

2HikakinTV 7,468,010

3Fischer's-フィッシャーズ- 5,609,918

4Yuka Kinoshita木下ゆうか 5,270,569

5avex 4,772,233

6東海オンエア 4,578,923

7HikakinGames 4,260,518

8SUSHI RAMEN【Riku】 4,130,580

9水溜りボンド 3,991,777

10JunsKitchen 3,881,985

■ UUUMクリエイター登録者数ランキングランキング チャンネル名 登録者

14 SeikinTV 3,605,63721 ワタナベマホト 2,668,45522 桐崎栄三/きりざきえいじ 2,633,65025 ポッキー / PockySweets 2,581,61429 圧倒的不審者の極み! 2,431,37730 HIKAKIN 2,410,00831 はじめしゃちょー2 (hajime) 2,391,20935 おるたなChannel 2,280,24737 東海オンエアの控え室 2,262,72438 Fischer's-セカンダリ- 2,235,63750 HIMAWARIちゃんねる 1,931,29454 ボンボンTV 1,837,63157 MAHOTO 1,760,59359 はじめしゃちょーの畑 1,711,11060 カズチャンネル/Kazu Channel 1,699,83263 TOMIKKU NET 1,663,52765 アバンティーズ 1,620,75066 Hane & Mari's World Japan Kids TV 1,618,17467 70cleam 1,593,40669 PDSKabushikiGaisha 1,572,82572 瀬戸弘司 / Koji Seto 1,551,41682 カズゲームズ/Gaming Kazu 1,441,05084 水溜りボンドの日常 1,420,91799 はなお 1,324,000

100 ヴァンゆんチャンネル/ Powered by VAMBI 1,318,115

■ 登録者数総合ランキング TOP10

7/10

32/100

Channel Subscription Ranking■ TOP 10 ranking ■ TOP 100 ranking

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Copyright © UUUM Co.,Ltd. All rights reserved. 13

FYE May 2019 Overview

13Copyright © UUUM Co.,Ltd. All rights reserved.

Page 14: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 14

Exclusive Channels by Channel Subscribers

Over 100,000 Over 500,000 Over 1 million

235

294

5580

27 43

+59

+25+16

Channel subscribers

■ As of May 2018

■ As of May 2019

Page 15: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 15

Video Uploads by Our Creators

FYE May 2018

+12%

FYE May 2019

323,226videos

Monthly average26,936 videos

287,406 videos

Page 16: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 16

Sales by Market Sector for Advertising Tie-Ups

FYE May 2018 FYE May 2019

Other

Fashion

Government offices, groups

Distribution, retail

Information, Communications, Broadcasting

Foods, beverages

Medicine, cosmetics

Other entertainment

Toys

Apps, IT

Games

Except for games, ratios for all sectors grew significantly.

+33%

Page 17: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 17

Creators Selling Merchandise, Units Sold

Creators Selling Merchandise

141Creators

190Creators

Merchandise Units Sold

+34%

118Kunits

305Kunits

+158%

FYE May 2018 FYE May 2019FYE May 2018 FYE May 2019

Page 18: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 18

Events and Attendees

Number of Events Held

21Performances

Number of Guests Attending

+257% +172%

36,000Attendees

98,000Attendees

75Performances

FYE May 2018 FYE May 2019FYE May 2018 FYE May 2019

Page 19: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 19

The Future Industry Environment and the UUUM Long-Term Vision

19Copyright © UUUM Co., Ltd. All rights reserved.

Page 20: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 20

Diversification in Media Caused by the Rise of the Internet

The Individualization of Media

Changes in the Business Environment to Date

Copyright © UUUM Co., Ltd. All rights reserved.

Page 21: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 21

Changes in Video Media

Online Entertainment of the Past

Online Entertainment Today

Devices Content

TV

Smartphones

PC

TV

Devices Content

TVPrograms

TVPrograms

OnlineContent

The industry has gone from having only several TV programs to one in which online content has extended beyond the number of devices due to the popularization of the Internet and smart phones.

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Copyright © UUUM Co.,Ltd. All rights reserved. 22

(Minutes) TV Viewing Internet Use Newspaper Reading

Radio Listening

10-19

2013 120.4 99.1 0.6 0.1

2014 110.4 109.3 0.7 0.2

2015 112.9 112.2 0.2 2.6

2016 102.4 130.2 0.3 3.5

2017 83.9 128.8 0.3 1.5

20-29

2013 145.9 136.7 1.4 3.6

2014 132.7 151.3 2.4 9.4

2015 143.8 146.9 2.1 6.4

2016 130.7 155.9 1.4 16.8

2017 105.7 161.4 1.4 2.0

30-39

2013 175.9 87.8 5.8 17.7

2014 167.2 87.6 4.1 5.4

2015 162.7 105.3 3.5 15.3

2016 166.1 115.3 3.8 15.4

2017 136.9 120.4 3.5 4.3

The Steady Shift from TV to the Internet

(Minutes) TV Viewing Internet Use Newspaper Reading

Radio Listening

40-49

2013 156.7 70.0 8.6 22.6

2014 183.7 82.5 9.3 19.4

2015 168.1 93.5 8.8 13.7

2016 183.7 97.7 8.0 17.2

2017 170.1 108.3 6.3 12.0

50-59

2013 197.0 61.8 18.6 20.2

2014 198.6 68.0 16.3 13.5

2015 238.4 74.7 17.0 10.7

2016 197.6 85.5 14.4 19.8

2017 221.1 77.1 16.3 19.5

60-69

2013 276.8 36.7 28.0 20.5

2014 274.2 32.2 31.3 40.3

2015 280.2 35.7 29.6 30.6

2016 277.6 46.6 25.8 23.4

2017 272.9 38.1 25.9 17.3

Average Media Usage Time (Per Week Day) by Age group

Note: TV viewing is total of real-time and time-shifted viewing (source: White Paper Information and Communications in Japan)

Decreasing TV Viewing Time for 30s and Younger; Increasing Internet Usage

Page 23: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 23

Shift in Japanese Advertising Market Budgets

Video Advertising MarketAdvertising Market Growth by Four Mass Media Categories

Budgets in Japan’s Advertising Market Have Started Shifting Away From Traditional Media

(bn yen)

-1%

2%

-1%-2%

-6%

-4%-5%

-7%

-2%

-9% -9% -9%

-1%

3%

0%

-1%

TV Newspaper Magazine Radio

54 84

137 184

231 290

363 419

462 496

0

100

200

300

400

500

600

2015 2016 2017 2018 2019 2020 2021 2022 2023 20242015 2016 2017 2018

Source: Japanese Advertising Revenues, Dentsu Inc. Source: CyberAgent, Inc. research

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Copyright © UUUM Co.,Ltd. All rights reserved. 24

Terrestrial TV Pay video distribution service Free video distribution service

Commercial broadcasting NHK Amazon

Prime Hulu Netflix YouTube niconico AbemaTV GYAO!

All 95% 67% 11% 3% 3% 70% 14% 12% 11%

10-20 years 92% 59% 15% 7% 5% 84% 23% 13% 8%

30s 94% 53% 12% 4% 4% 80% 14% 12% 10%

40s 96% 61% 8% 2% 1% 65% 11% 15% 12%

50s 96% 77% 10% 2% 2% 69% 13% 14% 13%

60s 97% 82% 10% 2% 2% 57% 11% 7% 13%

Regularly viewed content services

Research: Joint study by MACROMILL, INC. (HoNote) and ShoeishaCo., Ltd (MarkeZine)Population surveyed: Men and women across Japan aged 18 to 69 years. Number of valid respondents: Sample of 1,000

Survey method: Internet research. Period of survey: December 2017

YouTube becomes a popular video media platform comparable to TV

Page 25: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 25

1はじめしゃちょー(hajime) 8,021,769

2HikakinTV 7,468,010

3Fischer's-フィッシャーズ- 5,609,918

4Yuka Kinoshita木下ゆうか 5,270,569

5avex 4,772,233

6東海オンエア 4,578,923

7HikakinGames 4,260,518

8SUSHI RAMEN【Riku】 4,130,580

9水溜りボンド 3,991,777

10JunsKitchen 3,881,985

■ UUUMクリエイター登録者数ランキングランキング チャンネル名 登録者

14 SeikinTV 3,605,63721 ワタナベマホト 2,668,45522 桐崎栄三/きりざきえいじ 2,633,65025 ポッキー / PockySweets 2,581,61429 圧倒的不審者の極み! 2,431,37730 HIKAKIN 2,410,00831 はじめしゃちょー2 (hajime) 2,391,20935 おるたなChannel 2,280,24737 東海オンエアの控え室 2,262,72438 Fischer's-セカンダリ- 2,235,63750 HIMAWARIちゃんねる 1,931,29454 ボンボンTV 1,837,63157 MAHOTO 1,760,59359 はじめしゃちょーの畑 1,711,11060 カズチャンネル/Kazu Channel 1,699,83263 TOMIKKU NET 1,663,52765 アバンティーズ 1,620,75066 Hane & Mari's World Japan Kids TV 1,618,17467 70cleam 1,593,40669 PDSKabushikiGaisha 1,572,82572 瀬戸弘司 / Koji Seto 1,551,41682 カズゲームズ/Gaming Kazu 1,441,05084 水溜りボンドの日常 1,420,91799 はなお 1,324,000

100 ヴァンゆんチャンネル/ Powered by VAMBI 1,318,115

■ 登録者数総合ランキング TOP10

7/10

32/100

Individuals Dominate YouTube Ranking■ TOP 10 ranking ■ TOP 100 ranking

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Copyright © UUUM Co.,Ltd. All rights reserved. 26

Shift in Time Spent from Portal Sites to Individual Content

Individual(Friends, Influencers)

Comparatively, ratio of time spent consuming individual content is

IncreasingPortal SitesComparatively, ratio of time spent using portal content is

Decrease in top page viewing ratios; increase in inflow from

social media properties

DecreasingIncrease in view of individual

content through video and photo posting, social media

Page 27: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 27

The Rise of the Internet Has Resulted in Unlimited Content

“Who” Has Posted is Becoming Much More Important Than “What” is Posted

Past Early Internet Today

Selecting content from a limited number of choices

Searching for content via portal sites

Follow favorite channels to view content

Content Channel

Searching for content is becoming impossible. Now, users give preference to content created by their favorite channels (content producers).

Portal Sites

TV Channels

Page 28: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 28

Advantage for Individual Content

Easy to Follow Individual Channels

All content is self-madePersonality shines through in the content

Individual Content Tells a Story That is Easy to

Identify With

Why?

Page 29: Overview of Results for FYE May 2019 · 2019-12-04 · Q3, FYE May 2017. Q4, FYE May 2017. Q1, FYE May 2018. Q2, FYE May 2018. Q3, FYE May 2018. Q4, FYE May 2018. Q1, FYE May 2019

Copyright © UUUM Co.,Ltd. All rights reserved. 29

Increase of Individual Influence Leads to an Expansion of the Individualized Economy

Projected Changes in the Future Business Environment

Copyright © UUUM Co., Ltd. All rights reserved.

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Problems With Traditional Industry Structures (1)

Individuals Cannot Reach Their Goals Without Belonging to an Agency or Company

CD SalesSponsored EventsTV Appearances

Consumers(Fans)

Labels, Studios

Apparel Companies

ApparelSales

SpecificDesigns

Debut

Musicians

Designers(Potential Big-Name Designers)

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16%

6%

33%

45%

Problems With Traditional Industry Structures (2)

Source: Digital Content White Paper 2017, Digital Content Association of Japan Source: Extract from Ongaku Shugi, Federation of Music Producers Japan

Content Creator Receives Only Small Revenue ShareEx. Animation

CreatorIllustrators, animators, script writers, authors, cartoonist, singer, song writer, choreographer, etc.

AggregatorAdvertising Agency, distributor, publisher, editor, record company, etc.

DistributorBroadcaster, theater, news, online distribution, bookstore, record store, etc.

Content Added Value (Contribution)

Profit Structure

Approx. ¥200 billion

Approx. ¥1.8 trillion

Master RoyaltiesEx. Music

12% to 16%

Artist

Master License

Copyright Fees

Music Publisher (3%) Lyricist (1.5%) Composer (1.5%)

Label

Production Cost Marketing and Promotions Management etc.

Distributor

Retailer25% to 27%

1%+

6%45%

33%

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Main Factor: Limited Channels and Media

Music

Books

Lyricist

Composer

Singer

Label CD Store

AuthorCartoonist

Publisher Agency Bookstores

TV Magazines Radio Newspapers

Creator Aggregator Distributor Consumers(Fans)

Channel Limitations

Media Limitations

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Consumers(Fans)

However, IT and Social Media Have Freed Creators From Limitations

Lyricist

Composer

Singer

AuthorCartoonist

Freedom from

Channel Limitations

Freedom from Media

Constraints

Online Music SalesCharge for Live Content Online

Book Sales Through EC SitesCharge for Content Online

Anyone can distribute content through social media to build a fan base without relying on mass media

Creator

Music

Books

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When Media Changes, Consumption Behavior ChangesA Structural Shift From a Mass Consumption to Diversified Consumption

Social MediaYouTube, Instagram, etc.(Different Content for Each)

TVRanking Sites

Search via Ranking and Portal SitesMainly BtoC

Direct purchase via link on social media siteSpread of CtoC

(Same Content for All)

The Past The Future

Everyone Watches the Same Content and Buys the Same

Goods

Diversified Consumption

Information Sources

PurchaseProcess

Information Sources

PurchaseProcess

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Media Individualization → Individuals Form Economies

Advertising Revenue as Media The Present

The Future

Individualized Media Creates Direct Business With Fans

Advertiser

Influencers

Fans

Content

Advertiser

Influencers

Fans

EC

Music

Events

Patron/Fan

Support

ContentDistribution

AdvertisingAdvertising

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Significant Growth of Non-Advertising Economy Overseas

Market Size: ¥1.9 trillion

Market Size: ¥50 billion

China

Japan

Mostly Advertising

Advertising

EC, Goods

Social Tipping

Other

ChinaJapan

Platform Agreements

Source: May 2019 PWC Consulting LLC Research (Estimate)

Comparison of Japanese and Chinese Influencer Markets

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The Past The Future

Summary: Individualized Economy Should Expand and Disrupt Traditional Corporate-Centric Economy

Companies

Individuals

• Limited number of companies owned distribution channels(New entry in some markets virtually impossible due to licensing and other regulations)

• Creating a user base required mass media coverage, advertising and promotions

• Can only achieve goals through a company/agency

• Even after joining, still subject to circumstances and decision-making of the company/agency

• Ultimately, only small percentage of revenue goes to the individual

• The decline of mass media influence has made it more difficult to generate reach and brand recognition, especially among the younger segment

• Individual creates their own fan base from which to conduct business

• In contrast to companies, the hurdle to success is relatively low; can compete in niche markets(Succeed with only a few hundred or a few thousand fans)

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The UUUM Long-Term Vision

Copyright © UUUM Co., Ltd. All rights reserved.

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The UUUM Business Model

Provide expertiseProvide training opportunities

Partner Companies

PartnershipsInvestments

M&A

Videography and editing support

BackyardAsset Support

Content managementMaking it possible to do what people want to do

Providing profit-making opportunities

FansEngagement

Strengthen

Creators

UUUM aims to become far and away the No.1 infrastructure provider supporting creators as we enter an expanding era of individualized economies.

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UUUM Strengths

Content Platforms

YouTube

Twitter

Instagram

TikTok

TV

Help Creators to Expand to Multi-Channel Platformsto Maximize Fan Engagement

Creators

Athletes

Artists

Idols

Culinary experts

IntellectualsMusicians

Photographers

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UUUM Aims to Work With Individual Creators to Change Current Industry Structures

Traditional Revenue Allocationin the Corporate-Centric Economy

Future Revenue Allocation inIndividualized Economies

Creators

Aggregators

Distributors

Creators

UUUM

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Advertising Market

Music Market

E-commerce market

Events Market

Education Market

・・・ ・ ・

Future Target Market Scale Overview

Shift to Individualized Economies

出所:「デジタルコンテンツ白書2017」(一般財団法人 デジタルコンテンツ協会)、経済産業省「平成30年度電子商取引に関する市場調査」、ライブ・エンタテインメント白書調査委員会「2017ライブ・エンタテインメント白書サマリー」

etc.

¥6 trillion

¥500 billion

¥500 billion

¥2 trillion

¥9 trillion Our TotalAddressable

Market

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Expand Economic Spheres, Grow Significant Revenues Outside Advertising

0%

2%

4%

6%

8%

10%

12%

14%

16%

FYE May 2017 FYE May 2018 FYE May 2019 FYE May 2020 Plan

Net Sales Ratio of Total SalesMerchandise・Expand no. of creators selling merchandise・Expand merchandise lineups・Expand brand collaborations・Expand sales opportunities combined with events・Launch creator-original brands

Events・Increase no. of creators with sponsored events・Expand scale of creator events・Move into live-streaming

Music・Launch labels・Launch, strengthen music team

Creator Support and Other SalesMeasures to Grow Sales

¥450mn

¥1.0bn

¥2.2bn

¥3.5bn

6%

9%

11%

13%

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Equity Tie-Up with piece of cake to Broaden Revenue Base

YouTube

InstagramOther

Platforms

Signed equity agreement today with piece of cake, operator of note.

Strengthen alliance with piece of cake to create and offer support to new influencers on note.

About noteCreator content distributor offering platforms for connecting creators and fans; reached 10 million active monthly users in January 2019.

Influencers Active Across a Variety of

Platforms

Expand economic spheresFinancial supportBackyardContent management

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Strategy to Achieve Our Long-Term Vision

1. Expand Base of Creators

2. Expand Individualized

Economies

3. Original Content

The Future

YouTube Instagram note And OtherPlatforms

Sponsored ContentAdsense

MerchandisingEventMusic

New Business

The Present

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Prioritizing Sales Growth (Market Growth) for the Time Being

Operating Profit Ratio

Sales

FYE May 17 FYE May 18 FYE May 19 Medium-Term Target Future

●Expanding base of creators●Expansion of individualized

economies●Original content

¥6.9 billion

¥11.7 billion

¥19.7 billion

5.1%6.1%

6.3%...and other initiatives to

expand and open new markets

15%

10%

Margin Expansion by Operating Leverage

Sales Growth Phase

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Forecast for FYE May 2020

47Copyright © UUUM Co.,Ltd. All rights reserved.

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Results Forecast for FYE May 2020

(million yen)

Full year plan for FYE May 2020

Actual results for FYE May 2019 Year-on-year

Net Sales 26,000 19,726 132%

Gross profit 7,020 5,407 130%

SG&A 5,620 4,160 135%

Operating profit 1,400 1,247 112%

Net income 880 889 99%

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Sales Forecast by Service

11,690

4,870

2,203 964

15,361

5,807 3,475

1,357

AdSense Advertising Creator support Other Original contents

FYE May 2019 Forecast for FYE May 2020

+31%

+41%+58%

+19%

(Units: million yen)

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SG&A Forecast

(million yen)

FYE May 2020 Plan

FYE May 2019 Results YoY

SG&A 5,620 4,160 135%

(new business-related) 229 274 84%

(move-related expenses*) 241 0 NANot including new business-

related, move-relatedSG&A

5,150 3,886 133%

*Impact of paying both old and new office rents during move, cost of purchasing furniture and fixtures associated with move, moving costs, etc.

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