Good afternoon. My name is Masayuki Mizushima and I am the Managing Director and Chairman of Hakuhodo DY Holdings Inc. Allow me to explain the details of the revisions we have made to Hakuhodo DY Group’s Medium Term Business Plan (MTBP).
We have moved forward with a variety of initiatives in line with the MTBP, which extends to the end of fiscal year 2023. However, due to the impact of the COVID-19 pandemic on the economy and market advertising, we announced that we had retired numerical targets for the current MTBP when we reported our financial results for the first half of fiscal 2020.
Although we are still facing a situation where the outlook for the economy and the advertising market is unclear, we have decided to revise the MTBP, in particular by updating our strategies and announcing numerical targets.
Starting on the next slide, I’ll explain the progress we’ve made on MTBP so far, both strategically and in terms of business performance. After that, I’ll provide details on plan revisions.
Let me first explain the progress we have made from a strategic point of view.
As you can see on this slide, we have achieved some level of progress with respect to the three fundamentals for growth of the plan, which are “Establish a leadership position in the broader digital domain”, “Strengthen the responsive capabilities for borderless enterprise activities”, and “Accelerating innovation through external collaboration.” Amid the rapid changes taking place in the external environment, however, we recognize that there are new issues that we need to address.
Next, I will explain our profit and loss situation, including our guidance for fiscal 2021.
In fiscal 2020, both adjusted gross profit and adjusted operating income before amortization of goodwill decreased due to the impact of the COVID-19 pandemic. In fiscal 2021, however, we expect both of these to recover above pre-pandemic levels.
Compared to fiscal 2019, we expect significant growth in both adjusted gross margin and adjusted operating income before amortization of goodwill, up 14.5% and 31.1%, respectively.
Please note that this forecast includes temporary positive factors, such as work related specifically to the COVID-19 pandemic and unspent activity spending due to the pandemic.
I will now explain the details of our revisions to the MTBP, in light of the previous review.
First, I will talk about our understanding of the external environment.
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