financial results for the fiscal year ended may 2021

Financial Results for the Fiscal Year Ended May 2021

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

1. Overview of Results for FYE May 2021

2. Future Growth Strategies

3. FYE May 2022 Forecast

4. Appendix

INDEX


Overview of Results for FYE May 2021

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


Despite negative factors due to the spread of COVID-19, we achieved our initial plan through improved profitability in our advertising business stemming from an increase in integrated proposals and cost controls through the use of remote work.

Overview of Results for FYE May 2021

Sluggish demand for advertising placements (particularly in Q1)

Cancellations and postponements of tie-ups involving on-location filming and events due to three separate state of emergency declarations

Postponements of offline events through the year

We absorbed the impact of

decreases sales, achieving our initial plan for

operating profit

Impact of COVID-19


Earnings Highlights, FYE May 2021

(million yen)

FYE May 2021Full year results

FYE May 2020Full year results

Year on year

FYE May 2021 plan (As of Jul. 2020)

Versus plan

Net Sales 24,488 22,460 109% 28,600 86%

Gross Profit 6,500 6,204 105% 7,550 86%

SG&A 5,684 5,210 109% 6,750 84%

Operating Profit 816 994 82% 800 102%

Net income attributable to owners of the parent

549 359 153% 490 112%


1,290 1,381 1,755 2,254 2,382

2,803 3,020 3,484

3,070 2,975 3,408 3,493 3,205 3,446 3,677 3,973

781 718 957

1,202 1,133 1,156 1,107

1,474 1,603 1,459

1,449 1,329 1,130

1,816 1,6391,995

212 294

292

225 548

432 427

796 588 748

779 360

400

589 774

824

106 91

90

86 114

178 194

479 247 229

212

510

264

259254

246

Q1, FYEMay 2018

Q2, FYEMay 2018

Q3, FYEMay 2018

Q4, FYEMay 2018

Q1, FYEMay 2019

Q2, FYEMay 2019

Q3, FYEMay 2019

Q4, FYEMay 2019

Q1, FYEMay 2020

Q2, FYEMay 2020

Q3, FYEMay 2020

Q4, FYEMay 2020

Q1, FYEMay 2021

Q2, FYEMay 2021

Q3, FYEMay 2021

Q4, FYEMay 2021

AdSense (YouTube revenues)

Advertising (sponsored video, etc.)

Creator Support, Other (merchandise, events, music, etc.)

UUUM services (UUUM owned channels, games, etc.)5,411

Sales by Quarter

Sales grew greatly compared to Q3, despite continuous impact from emergency declaration (Units: million yen)

2,3882,4853,094

3,7684,177

4,569

5,5084,747

6,233 5,8485,693

4,998

6,1096,344

7,038


Gross Profit by Quarter

Gross profit also grew as sales recovered compared to Q3

727 744864

1,069 1,202

1,272 1,282

1,651 1,626 1,536 1,568 1,473

1,362

1,6581,583

1,896

0

175

350

525

700

875

1050

1225

1400

1575

1750

1925

2100

Q1, FYEMay 2018

Q2, FYEMay 2018

Q3, FYEMay 2018

Q4, FYEMay 2018

Q1, FYEMay 2019

Q2, FYEMay 2019

Q3, FYEMay 2019

Q4, FYEMay 2019

Q1, FYEMay 2020

Q2, FYEMay 2020

Q3, FYEMay 2020

Q4, FYEMay 2020

Q1, FYEMay 2021

Q2, FYEMay 2021

Q3, FYEMay 2021

Q4, FYEMay 2021

（Units: million yen)


293 302 344 368 431 494 515617 708 664 678 681 697 766 767 846

58 61 63 6772

77 7784

84 85182 162 149

149 149149

3931

14 39

10039 31

29 65 5348 61

56

4998

95 7993

236 79 11394

21292

121 119123

825

25

25 2525

25

2525 25

25

137 146150

240246 204

255

339

268 268309

358

300300 290

347

Q1, FYEMay 2018

Q2, FYEMay 2018

Q3, FYEMay 2018

Q4, FYEMay 2018

Q1, FYEMay 2019

Q2, FYEMay 2019

Q3, FYEMay 2019

Q4, FYEMay 2019

Q1, FYEMay 2020

Q2, FYEMay 2020

Q3, FYEMay 2020

Q4, FYEMay 2020

Q1, FYEMay 2021

Q2, FYEMay 2021

Q3, FYEMay 2021

Q4, FYEMay 2021

Other expenseAmortization related to acquisitionContracting expenseAdvertising and promotion expenseRent expensePersonnel expense

1,316(Including 39 in new business-

related expenses and 72 in strategic investment)

1,410(Including 60 in new

business-related expenses and 95 in strategic

investment)


business-related expenses and 93 in

strategic investment)


business-related expenses and 99 in

strategic investment)

610(Including 57 in new

business-related expenses)











1,005 (Including 61 in new












Increase in provision for bonuses(increasing along with operating profit) mainly accounting for personnel expense increase

Selling, General, and Administrative Expenses by Quarter

(Units: million yen)

Note: Strategic investment figures have been revised to SG&A based figures, previously including COGS figures. New business-related figures have also been revised newly including costs related to FORO.


Operating Profit by Quarter

Operating profit recovered from Q3, exceeding company plan

117 142 200 257 326 395276 250

453351

250

-30

46248 172

350

Q1, FYEMay 2018

Q2, FYEMay 2018

Q3, FYEMay 2018

Q4, FYEMay 2018

Q1, FYEMay 2019

Q2, FYEMay 2019

Q3, FYEMay 2019

Q4, FYEMay 2019

Q1, FYEMay 2020

Q2, FYEMay 2020

Q3, FYEMay 2020

Q4, FYEMay 2020

Q1, FYEMay 2021

Q2, FYEMay 2021

Q3, FYEMay 2021

Q4, FYEMay 2021

Gross profit

SG&A



Future Growth Strategies



Our Industry Environment



Ad Budgets in Major Advertising Markets in Japan

Online Advertising Market is Already Comparable to Traditional Media

(100 million yen)

-1% -2% -3%

-11%

-5%-7%

-5%

-19%

-9% -9% -9%

-27%

0%

-1% -1%

-15%

TV Newspaper Magazine Radio

842 1,374

1,843 2,592

2,954

3,889 4,187 4,833

5,846

6,856

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2016 2017 2018 2019 2020 2021 2022 2023 2024 20252017 2018 2019 2020

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

Advertising Market Growth by Four Mass Media Categories

Video Advertising Market


We are in an era where all individuals have become a form of media

Creators From the Early Days of Online Content

Numerous Individuals represented by Entertainers and Corporations delivering messages through SNS

Personal Media has Become Commonplace, Regardless of Individual Attributes or Affiliations


An era in which individual economic

spheres are established

An Era in Which a Variety of Individual Economic Spheres Develop to Match the Diversity of Individuals

Apparel Brands

An era in which the individual economic sphere is the norm

Diversification of markets to match the diversity

of individuals

FitnessBrands

CosmeticsBrands

Game Supervision

Athletic Production

Artist Activities

TV Commercial Production


UUUM Strategy



Major Initiatives for FYE May 2022

Generate an Evolution in Creator Support

Initiative1

Delve Deeper Into Business Opportunities

With Top Creators

Expand Support Models Laterally to a Wider Range

of Offices, Individuals

Expand Proposals for Integrated Solutions in

Japan and overseasExpand Investment in

New FieldsChange Management System to Clarify Responsibilities and Make Decisions More Rapidly

Initiative2

Initiative3

Initiative4

Initiative5

Initiative6


Partnerships M&A

Fan EngagementCreator

Diversification and Specialization of support plans proceeding as we adjust to the needs of the times

Generate an Evolution in Creator SupportInitiative 1

• Support for Activities on Other Social Media

• Events• Musical activities

Channel Development• Channel Analysis• Editing/Planning Support• Film Studios

UUUM Academy

Content Management

Product Sales

Financial Support• Asset Management• Tax Consulting• Tax Filing• Backyard Agency Services

Professional support meeting needs in different genres

GenreA

GenreB

GenreC

Facilitate and Advance Tie-Up Projects

• Product Design• Original Brand

Goods• Brand Collaborations

• Compliance Training• Content Management• Game Licensing• Anti-Defamation Measures

Partner Companies


New Fields

Other

• Create original brands and license products to other companies• Explore possibilities for expanding into other/new business fields

Developing new businesses with top-creators

Delve Deeper Into Business Opportunities With Top CreatorsInitiative 2

Original Brands

¥0.5 billion

¥1.8 billion

FYE May 21 FYE May 22(Forecast)

Brand/Licensing Sales ForecastBusiness Development


Beyond YouTubers, we a providing support to individuals in a variety of fields

YouTubersMusicians

Instagrammers Idols

Livestreamers

CelebritiesAthletes

TikTokers

Support

Channel Development Facilitate and Advance Tie-Up Projects Fan Engagement Product Sales

Content Management UUUM AcademyFinancial Support

Creator platforms

The Creators We Support are Becoming More DiversifiedInitiative 3


UUUM Integrated Solutions

Public Relations

Promotion

Planning

Content

Plan ProposalsOptimal Plans

Production Organization

Knowledge accumulated through more than 3,500 tie-up projects annually

AdvertisingReporting

Event ManagementProduct Supervision

Accelerating overseas client base as we expand integrated solutions proposals in our tie-up advertising business

Expand Proposals for Integrated Solutions in Japan and overseasInitiative 4

Planning Design

Casting

Creative Productions

Product Development

Events

Video Partnerships

Report Analysis

Media Buying

Social Media Posts

Advertising sales accounting for overseas clients

¥250mn

¥580mn

¥1,260mn

FYE May 19 FYE May 20 FYE May 21


More than 6 million downloads

More than 6 million downloads

Leverage the successes and strengths developed through games such as Datsugoku Gokko and Aooni Online to take on the challenge of major title development

The Challenge to Develop Major Titles

Planning skills with an eye toward game livestreaming,

collaborations with game livestreamers

UUUM Strengths

Take on the Challenge to Develop Major Titles in the Games FieldInitiative 5


Launch of NFT platform「HABET」Initiative 5

Since 2013, we have supported creators and influencers, advocating for an era in which individuals are media. We believe in the formation of personal economic spheres, and that the sharing of a person's communications and activities all qualify as content.

We will begin developing an NFT platform to deliver this intangible content to the world in new ways.


Many Content Partners to ParticipateInitiative 5

Content Partners

ownership

Individuals providing

content in the future Individuals

YouTube Creators（HIKAKIN, Hajime, Fischer’s, Nobaman,

One-Co Soba Noodles etc.）

Our goal is to create a platform where individuals can create and provide their own NFT

ownership

ownershipownership


Split off three businesses as wholly owned subsidiaries to improve management speed and accelerate initiatives with external parties.

Convert 3 Businesses to Subsidiaries2

Change Management System to Clarify Responsibilities and Make Decisions More Rapidly Initiative 6

P2C Studio Co., Ltd.(Products, E-Commerce)

UUUM GOLF Co., Ltd.(UUUM GOLF business)

FORO Co., Ltd.(FOLLOW ME/HABET business)

Board of Directors(two internal, three external)

Executive Committee

Adopt Executive Officer System

In light of the diversification and complexity of our businesses, we intend to improve management speed by shifting executive and performance responsibilities to the Executive Committee and individual executive officers. Simplify the board of directors and focus on monitoring.

1

Board of Directors(six internal,

three external)

We will continue to grow as a company that offers kodomogokoro to the world.

Creator platforms

Creator Management

Events

Creator platforms NFT

Music

Game

Developing new businesses with top-creators

Events

Expansion of platforms

EC

2013（Establishment）

Current

Tie-Up advertising

Merchandise

FOLLOWME

CREAS

Merchandise

Tie-Up advertising

Apparel

CosmeticsNew

Business

Expanding content among platforms


Forecast for FYE May 2022



Main Points of the FYE May 2022 Forecast

• FYE May 2022 will be a year of aggressive investment in businesses that showed signs of growth in FYE May 2021. We expect these investments to lead to growth in FYE May 2023 and beyond.

• More specifically, we intend to invest in creator brands, PF revenue outside of YouTube, music publishing, NFT, etc. We expect these businesses to start contributing beginning in the second half of this fiscal year at the earliest.

• Operating income per employee is a key KPI, and we intend to improve this measure by delving deeper into business opportunities with top creators, as well as by developing support for a wide range of individuals.

• We consider AdSense to be our revenue base, and we will control SG&A expenses appropriately within AdSense revenue.

• We plan to apply「Accounting Standards for Revenue Recognition」from FYE May 2022 which will affect our sales


Results Forecast for FYE May 2022

(million yen)

Results Forecast for FYE May 2022

Actual results for FYE May 2021 Year-on-year

Net Sales 24,500 24,488 -

(Excluding Impacts from Revenue

Recognition Change)27,400 24,488 112％

Gross profit 7,600 6,500 117％

Operating profit 830 816 102%Net income attributable to owners of the parent

470 549 86%

Note1: We plan net income attributable to owners of the parent to decrease in FYE May 2022 as we recorded gains from subsidies applied to our Miyazaki office in FYE May 2021 and expect increase in effective tax rate due to recorded losses in our subsidiaries.Note2: We plan to apply「Accounting Standards for Revenue Recognition」from FYE May 2022 which will affect our sales


14,301

6,580

2,5861,022

14,400

7,500

4,400

1,100

AdSense Advertising Creator support Other Original contents

FYE May 2021 Forecast for FYE May 2022

Sales Forecast by Service

＋1％

＋8％+70％

＋14％



SG&A Forecast

(million yen)

FYE May 2022 Forecast

FYE May 2021 Results YoY

SG&A 6,770 5,684 119％

(New business-related) 305 204 150%

(Related to strategic investment in creators) 452 360 126%

SG&A, excluding new business/strategic investment

in creators6,013 5,120 117%


8

13

20

8.16 8.3

13

20

FYE May 21 FYE May 22 FYE May 23 FYE May 24

As of July 2020 Current Outlook

Seeding Period Investment Period Business Expansion Period

Medium-Term Management Plan Targets

(100 million yen)

We intend to invest in growth businesses throughout FYE May 2022, including original brands and NFT. Therefore, we will postpone medium-term target achievement by one year, looking to ride a growth trajectory beginning FYE March 2023.


Appendix



115% 115%124%

86%

60%79% 69% 68%

84% 88%

135%

173%

127%137% 138% 142%

211%

241%

101% 100% 105%

99% 101%88% 86%

94%104%

97%

108% 109% 101%118% 115% 116%

136% 144%

Dec-19 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 Feb-21 Apr-21

Our Tie-Up advertising sales compared to the industry (year on year growth)

※Industry is based on Internet Advertisement sales within「Current Survey of Selected Service Industries」by METI.

UUUM

Industry


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

Temporary increase due to stay home effect during emergency declaration period


No. of Affiliated Channels by Subscribers

48109

197

481

58137

233

580

1m+ 500k+ 300k+ 100k+

As of Jun 2020 As of Jun 2021

No. of YouTube Channel SubscribersNote: Includes partner channels

Channels with 1m+ subscribers increased from 48 to 58 over 12 months


Employees and Temporary Employees, End of Quarter

175 195 214 249 276 297 318 385 415 439 444 483 519 530 530 554

16 22 17 26

28 37 31

24 33 30 31

19 23 28 33 27

191 217 231 275 304 334 349

409 448 469 475 502 542 558 563

581

Q1, FYEMay 2018

Q2, FYEMay 2018

Q3, FYEMay 2018

Q4, FYEMay 2018

Q1, FYEMay 2019

Q2, FYEMay 2019

Q3, FYEMay 2019

Q4, FYEMay 2019

Q1, FYEMay 2020

Q2, FYEMay 2020

Q3, FYEMay 2020

Q4, FYEMay 2020

Q1, FYEMay 2021

Q2, FYEMay 2021

Q3, FYEMay 2021

Q4, FYEMay 2021

Employees (including directors)Temporary employees

(Units: employees)

financial results for the fiscal year ended may 2021

Documents