■ KeyHolder <4712> Performance Trends

3. Performance outlook for the year ending December 2024.

Regarding the performance forecast for the fiscal year ending December 2024, the company expects sales revenue of 32,000 million yen (+16.3% year-on-year), operating profit of 2,400 million yen (+22.1% year-on-year), and net income attributable to owners of the parent company of 2,200 million yen (+4.0% year-on-year). The progress rate in the second quarter was weak, but the full-year performance forecast has not been changed from the initial forecast. The reason for this is that the impact of the progress and accounting treatment of the subsidiaryization of Topos Enterprise planned for October 2024 is undetermined, and it may have been somewhat bullish in the initial performance forecast as it was well known that there would be differences related to the successful performance and increased upfront investment via the subsidiary. In a sense, it could be considered a turning point, but the plan is to catch up with the performance forecast through the measures in the latter half as stated below.

In the live entertainment division of the comprehensive entertainment business, the company will continue to expand the successful operation of existing IP and the expansion of new IP through the production operation of affiliated artists and others. In this context, Nogizaka46 held the "Midsummer Nationwide Tour 2024" in the third quarter, with a total of 7 performances in Osaka, Nagoya, and Tokyo. The reduced number of performance venues enables cost savings in transportation and setup costs, and with the revised ticket prices, it is expected to improve profitability and recover the shortfall from the second quarter. SKE48 is not only holding daily theater performances but also planning to hold the "SUMMER Tour 2024" from the third quarter, with 14 performances in 6 cities, including a performance by the 8th generation members titled "SKE48 8th Generation 8th Anniversary Concert Pachipachi Parchi." The release of the 33rd single "Kokuhaku Shinpakusuu" is also scheduled for the fourth quarter.

Novelbright continues the "Novelbright LIVE TOUR 2024 ~CIRCUS~" visiting 25 cities for a total of 27 performances since the first half. On October 5th and 6th, they plan to hold the "Novelbright LIVE TOUR 2024 ~CIRCUS~ FINAL" at Himeji Castle, a symbol of Himeji City, with an expected audience of 0.03 million, which would be the largest-scale performance in Novelbright's history. In addition, there are plans to expand the roster of talents, including those such as Wakatsuki Yumi, Ikoma Rina, Oguri Yui, Kehata Nawa, and Ego Yuuna, as well as new talents, and to broaden their range of activities. In the digital content division, the company plans to focus on the existing smartphone app operation business through 10ANTZ, while promoting group synergy using AI technology for IP content and video production.

In the video production business, the focus remains on the mainstay variety shows, with 16 regular programs in addition to the newly-regularized "What's the Big Secret? (TV Tokyo)," continuing to steadily accumulate achievements by leveraging planning and production capabilities. Furthermore, the company continues to be involved in the production of Season 3 of the Netflix comedy series "Talk Survivor! ~You Can Survive if Your Talk is Funny~" which is distributed in over 190 countries worldwide. In drama production, the broadcast of "Hidamari Ga Kikoeru," directed by a director affiliated with UNITED PRODUCTIONS, began in July on TV Tokyo, and a nationwide release of Takuya Uchiyama's commercial feature film debut, "Wakaki Mishiranu Mono-tachi," is scheduled for October. In new business fields, TOKYO ROCK STUDIO steadily accumulated back office production experience leading up to the production announcement of the movie "WHAT DIVIDES US," and is actively engaged in lobbying activities to win large-scale overseas projects.

In the digital advertising division of the advertising agency business, the focus remains on handling video advertisements on platforms like YouTube, while strengthening internet advertising and internet media businesses in expanding digital advertising platforms. Additionally, the company plans to leverage group synergy from 10ANTZ and existing IP businesses to undertake advertising projects, as well as to significantly expand into new areas such as real estate and finance. In the advertising agency division, the plan is to continue the large-scale advertising projects of major securities firms and to continue to secure excellent projects centered around Seven-Eleven Japan. Furthermore, the idol group "Boku ga Mitakatta Aozora," which celebrated its first anniversary in June, held its first stage performance in July, titled "Natsugasumi," and the song "Sorairo no Mizushibuki" from the group will be used as the theme song for the nationwide release of the theater animation "Ganbatte Ikimasshoi" scheduled for October. The plan is to continually increase various initiatives through the utilization of existing IP within the group, such as event planning, proposal, and operation, including live events at commercial facilities and collaborative projects with social media, in order to expand the business scale by actively responding to client demands from event planning and development to product planning monetization for clients such as major corporations, sports teams, and prominent artists.

(Author: FISCO guest analyst Nobumitsu Miyata)