Financial Highlights Q1 Results of FY 2013 (Fiscal year ending March 2014) August 8, 2013 7860: Avex Group Holdings Inc. 1 1
Consolidated Results 2 2
Q1 FY 2013 Highlights Record high as a quarterly sales. -Consolidated Sales- 39.41 (billions of yen) 30.67 23.98 FY 2011 Q1 FY 2012 Q1 FY 2013 Q1 3 3
Q1 FY 2013 Highlights Q1 OP marked an all-time-high. -Operating Income- 3.01 (billions of yen) 2.32 2.26 FY 2011 Q1 FY 2012 Q1 FY 2013 Q1 4 4
Revenue Contribution Video and Management/Live Business pushed up overall sales. Others 3% 0.9bn Others 2% 0.8bn Music Management / Live 41% 13.2bn Video 16% 5.1bn Music 40% 12.7bn Management / Live 46% 19.1bn 27% 11.0bn Video 25% 10.1bn FY 2012 Q1 FY 2013 Q1 5 5
Segment Results 6 6
Music Business Results by Sub-Segment Both physical & digital music went down YoY, due to lesser major releases as well as weak momentum in digital music. Music Package YoY Digital Music Distribution (billions of yen) YoY Sales 6.43-17.0% 2.83-14.4% Gross Profit 2.07-24.2% 1.28-7.7% GPM 32.3% -3.1pt 45.4% +3.3pt 7 7
Video Business Highlights: Number of d-video Subscribers Subscribers of d-video including BeeTV d-video BeeTV (millions of people) showed robust growth. 4.23 4.84 5.39 5.62 1.56 1.84 1.93 0.12 2.43 0.73 3.16 1.57 2.75 3.47 4.13 4.46 1.56 1.84 1.80 1.69 1.58 1.48 1.36 1.25 1.15 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY 2011 FY 2012 FY 2013 8 Reference: 5.63mn subscribers as of end of July. 8
Video Business Highlights: Number of UULA Subscribers UULA subscribers grew steadily as well. (thousands of people) 471 537 393 281 3.9 万人 Mar. 2013 Apr. 2013 May 2013 Jun. 2013 9 Reference: 596 thousand subscribers as of end of July. 9
Video Business Results by Sub-Segment Sales and gross profit of video distribution surged, driven by the subscriber growth. (billions of yen) Video Distribution YoY Video Package YoY Sales 8.29 +129.5% 2.03 +17.0% Gross Profit 3.17 +93.9% 0.74-7.8% GPM 38.3% -7.1pt 36.7% -9.8pt 10 10
Management Live Business Highlights: Number of Concerts Expansion of stadium-class concerts led to a massive increase in attendance. Number of stadium-class concerts already exceed the annual level of last fiscal year. Venue Size FY 2012 Q1 FY 2013 Q1 YoY Stadium class 8 20 +12 Arena class 39 34-5 Hall & Live House class 57 119 +62 Total 104 173 +69 Number of audience 0.71mn people 1.05mn people +0.34mn people 11 11
Management/Live Business Highlights Sales showed strong growth driven by live acts and merchandising. (billions of yen) Live Concerts YoY Management YoY Sales 12.47 +53.3% 4.19 +20.0% Gross Profit 1.01 +10.3% 1.36 +26.3% GPM 8.1% -3.2pt 32.6% +1.6pt Merchandising YoY Fan Club YoY Sales 4.58 +50.5% 0.85 +19.6% Gross Profit 1.88 +64.7% 0.3 +14.4% GPM 41.1% +3.5pt 35.2% -1.7pt 12 12
Earnings Forecast 13 13
Revision of Earnings and Dividends Forecast Revise up net profit forecast due to the recording of extraordinary profit*. * Please refer to the press release Announcement of Gain on Sales of Investment Securities announced on July 29 th. Interim 2.1bn 5.1bn (up 3.0bn) Full Year 7.0bn 10.0bn (up 3.0bn) 10 increase in interim dividends forecast due to the upward revision stated above. Interim 25 35 (up 10) Full Year 50 60 (up 10) 14 14
Reference Data 15 15
Q1 Results of FY 2013 (millions of yen) Consolidated Income Statement FY 2012 Q1 FY 2013 Q1 YoY Sales 30,676 39,416 +8,740 COGS 20,386 27,481 +7,095 Gross Profit 10,289 11,935 +1,645 GPM 33.5% 30.3% -3.2pt Personnel Expenses 2,854 3,265 +411 Advertising Expenses 2,335 2,399 +64 General Expenses 2,832 3,258 +426 Total SG&A 8,021 8,923 +901 Operating Profit 2,268 3,011 +743 OPM 7.4% 7.6% +0.2pt Recurring Profit 1,867 3,102 +1,234 Net Profit 862 902 +39 16 16
Music Business Income Statement (millions of yen) Music Business FY 2012 Q1 FY 2013 Q1 YoY Sales 12,723 11,056 COGS 8,184 7,418 Gross Profit 4,538 3,638 GPM 35.7% 32.9% Personnel Expenses 804 836 Advertising Expenses 1,886 1,656 General Expenses 906 868 Group Management Fee 1,133 1,115 Total SG&A Operating Profit 4,730-191 4,478-840 OPM -1.5% -7.6% -1,666-766 -900-2.8pt +32-230 -37-17 -252-648 -6.1pt 17 17
Music Business: Results by sub-segment Music Package FY 2012 Q1 Sales 7,750 Gross Profit 2,743 GPM 35.4% FY 2013 Q1 6,430 2,079 32.3% (millions of yen) YoY -1,320-664 -3.1pt Sales Gross Profit GPM Digital Distribution FY 2012 Q1 FY 2013 Q1 YoY 3,315 2,838-476 1,396 1,288-107 42.1% 45.4% +3.3pt Music Publishing FY 2012 Q1 FY 2013 Q1 YoY Sales 841 989 +147 Gross Profit 266 309 GPM 31.6% 31.3% +43 18-0.3pt 18
Music Business: Results by sub-segment Other Businesses of Music (millions of yen) FY 2012 Q1 FY 2013 Q1 YoY Sales 909 803-106 Gross Profit 464 335-129 GPM 51.1% 41.8% -9.3pt 19 19
Music Business: Indicators Music Business: Indicators M u s i c P a c k a g e M u s i c D o w n l o a d Albums Singles DVD/Blu-ray Discs Featurephone (Ring Tones,Video ringtones) Smartphone (Ring Tones,Video ringtones) Ring-back tones PC Mu-mo Average Price (\) Units (thousands) Average Price (\) Units (thousands) Average Price (\) Units (thousands) Average Price (\) Downloads (thousands) Average Price (\) Downloads (thousands) Average Price (\) Downloads (thousands) Average Price (\) Downloads (thousands) ARPU (\) Subscribers (thousands) FY 2012 Q1 2,249 719 845 1,754 6,812 316 253 4,872 197 1,245 101 4,710 212 2,397 355 634 Indicators of music packages represent the titles released in FY2013. Library products are not included. FY 2013 Q1 1,922 413 674 2,013 5,962 220 280 1,740 249 2,256 100 3,713 223 2,467 351 418 20 20
Music Business: Key Titles Released in FY2013 Q1 Albums Artist E-girls Lesson 1 Title Copies(thousands) 166 May J. Summer Ballad Covers 131 Artist Singles Title Copies(thousands) EXILE EXILE PRIDE ~Konna Sekai wo Aisurutame ~ TOHOSHINKI OCEAN EXILE Flower Song 785 178 161 21 21
Video Business Income Statement (millions of yen) Video Business FY 2012 Q1 FY 2013 Q1 YoY Sales 5,121 10,151 +5,029 COGS 2,830 6,335 +3,504 Gross Profit GPM 2,290 44.7% 3,816 37.6% +1,525-7.1pt Personnel Expenses 181 357 +176 Advertising Expenses General Expenses Group Management Fee Total SG&A 338 129 217 867 698 178 237 1,472 +360 +48 +19 +604 Operating Profit 1,423 2,344 +920 OPM 27.8% 23.1% -4.7pt 22 22
Video Business: Results by sub-segment (millions of yen) Video Distribution FY 2012 Q1 FY 2013 Q1 YoY Sales 3,614 8,296 +4,682 Gross Profit 1,639 3,179 +1,539 GPM 45.4% 38.3% -7.1pt Sales Gross Profit GPM Video Package FY 2012 Q1 FY 2013 Q1 YoY 1,739 2,035 +295 809 746-62 46.5% 36.7% -9.8pt 23 23
Video Business: Indicators Video Business: Indicators FY 2012 Q1 FY 2013 Q1 d-video + BeeTV ARPU (\) Subscribers (thousands) 395 3,167 459 5,620 d-video 1,578 4,464 BeeTV 1,589 1,156 UULA ARPU (\) Subscribers (thousands) - - 466 537 DVD/Blu-ray Discs Average Price (\) Units (thousands) 4,529 154 4,745 273 Indicators of DVD/Blu-ray Discs represent the titles released in FY2013. Library products are not included. 24 24
Management/Live Business Statement Management/Live Business (millions of yen) FY 2012 Q1 FY 2013 Q1 YoY Sales 13,269 19,100 +5,830 COGS 9,578 14,497 +4,919 Gross Profit 3,691 4,602 +911 GPM 27.8% 24.1% -3.7pt Personnel Expenses 576 767 +190 Advertising Expenses 424 171-253 General Expenses 976 1,240 +263 Group Management Fee 677 710 +33 Total SG&A 2,655 2,890 +235 Operating Profit 1,036 1,712 +676 OPM 7.8% 9.0% +1.2pt 25 25
Management/Live Business: Results by Segment (millions of yen) Live concerts FY 2012 Q1 FY 2013 Q1 YoY Sales 8,141 12,478 +4,336 Gross Profit 919 1,014 +94 GPM 11.3% 8.1% -3.2pt Sales Gross Profit GPM Management FY 2012 Q1 FY 2013 Q1 YoY 3,494 4,192 +697 1,083 1,368 +284 31.0% 32.6% +1.6pt Sales Gross Profit GPM Merchandising FY 2012 Q1 FY 2013 Q1 YoY 3,048 4,586 +1,538 1,145 1,886 +740 37.6% 41.1% 26 +3.5pt 26
Management & Live Business: Results by Segment (millions of yen) Fan Club FY 2012 Q1 FY 2013 Q1 YoY Sales 716 857 +140 Gross Profit 264 302 +37 GPM 36.9% 35.2% -1.7pt Others FY 2012 Q1 FY 2013 Q1 YoY Sales 142 143 +1 Gross Profit 43 33-10 GPM 30.5% 22.9% -7.6pt Concert Ticket Fan Club Management & Live Business: Indicators FY 2012 Q1 FY 2013 Q1 Average Price (\) 8,782 9,412 Subscribers(thousands) 904 1,017 27 27
Other Business Statement Other Business (millions of yen) FY 2012 Q1 FY 2013 Q1 YoY Sales 987 877-110 COGS 427 348-79 Gross Profit 559 528-31 GPM 56.7% 60.2% +3.5pt Personnel Expenses 103 174 +71 Advertising Expenses 146 147 +1 General Expenses 220 279 +59 Group Management Fee 88 122 +33 Total SG&A 559 724 +165 Operating Profit 0-196 -196 OPM 0.1% -22.4% -22.5pt 28 28
Balance Sheet Balance Sheet (millions of yen) Current Assets Cash Equivalents Notes & Accounts Receivable Inventories Deferred Tax Assets Others Fixed Assets Tangible & Intangible Fixed Assets Total Investments & Others Investment Securities Others Total Assets 2013 End of Mar. 54,004 17,974 18,058 5,631 2013 End of June 48,950 12,372 17,728 13,889 Others 1,402 1,620 108,756 106,834 Current Liabilities Notes & Accounts Payable Short-term Debt Accured Royalties Allowance for Returned Goods Others 4,487 7,425 26,759 29,105 54,752 57,883 Fixed Liabilities 6,507 6,925 40,862 40,923 Long-term Debt Total Liabilities Total Shareholders Equity Total Liabilities & S/H Equity 2013 End of Mar. 2013 End of June 13,006 9,752 7,852 6,354 7,619 6,081 5,070 16,959 53,369 50,269 1,885 1,402 4,098 3,927 2,840 2,344 3,666 4,580 12,487 15,339 59,877 57,194 48,878 49,639 108,756 106,834 29 29
Revision of Forecast (millions of yen) FY 2013 Interim Previous Forecast Revised Forecast YoY Sales 77,909 77,909 - Operating Profit 5,525 5,525 - Recurring Profit 5,472 5,472 - Net Profit 2,194 5,194 +3,000 Previous Forecast FY 2013 Full Year Revised Forecast YoY Sales 161,000 161,000 - Operating Profit 15,600 15,600 - Recurring Profit 15,625 15,625 - Net Profit 7,000 10,000 +3,000 30 30
Forward-looking Statements Strategies, plans, outlooks contained herein are based on information currently available. Actual performance may differ from our expectations. Factors that could cause such difference include changes in the business environment and events that would possibly happen in the future. Inquiries Avex Group Holdings Inc. Stocks & IR Division +81-3-5413-8519 stock@av.avex.co.jp 31 31