The numerical targets in the medium-term management plan are under review (as explained on page 37 of the financial results briefing FY2023 3Q, disclosed on January 15, 2024).
DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Medium-Term Management Plan FY2022–2026 (Five Years) MEDIA DO Co., Ltd. More Content for More People! The numerical targets in the medium-term management plan are under review (as explained on page 37 of the financial results briefing FY2023 3Q, disclosed on January 15, 2024).
DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) 1 Contents 1. Review of the Previous Medium-Term Management Plan 2. Overview of the New Medium-Term Management Plan 3. Initiatives by Segment 4. Corporate Governance System 5. Financial Strategies / Shareholder Returns (1) eBook Distribution Business (2) Imprint Business (3) Publishing Solution Business (4) Global Business (5) Fan Marketing Business Copyright 2022 MEDIA DO Co., Ltd. All rights reserved. ｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years)
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Positioning of Medium-Term Management Plans Publishing Platformer Evolution into entity supporting digital transformation of the content industry Evolution of business and management to achieve successful transition to MEDIA DO 3.0 Media Do 1.0 Business operated solely by MEDIA DO Presence as industry-leading eBook wholesaler through integration of Digital Publishing Initiatives Japan Media Do 2.0 Media Do 3.0 New Medium-Term Management Plan Previous Medium-Term Management Plan (Launched in July 2018) Reinforcement of position in the physical and digital publishing industries and growth of new businesses to develop a second business axis Integration of Digital Publishing Initiatives Japan and creation of foundations for new business development 2018 2020 2021 2022 2023 2024 2025 2026 2019 Policies Shaping the Medium-Term Management Plan
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Drastic industry structure changes Digital Technologies Content ＝Rapid Growth in Global Content Demand Leveraging of strength of MEDIA DO’s POSITION, i.e., the trust gained in the content industry due to its ability to handle authentic content and its access to people and information Revision of the medium-term management plan based on degree of changes in the content industry ✓ Shift in focus of content production, distribution, and consumption to digital venues (emerging issues related to counterfeit and pirated content) ✓ Increased competition in acquiring content due to influence of high-capital entities Positioning of Medium-Term Management Plans Policies Shaping the Medium-Term Management Plan
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Policies Shaping the Medium-Term Management Plan Ongoing approach of aggressive investment under the new medium-term management plan, but policy of controlling costs and exercising discipline in investment Lack of change in earnings structures dependent on main business despite business growth accompanying growth of the eBook market Concern regarding transactions with major business partners and downturns following large-scale campaigns Issue 1 Promotion of new business development and alliances, progress in cultivating future growth drivers Commencement of blockchain technology research in 2018, execution of M&A activities and investments in excess of \9.0 billion Organizational integration with Digital Publishing Initiatives Japan, reinforcement of corporate governance systems, and development of other management foundations Establishment of differentiated position as the No. 1 domestic eBook wholesaler Issues and Successes of the Previous Medium-Term Management Plan Success 1 Success 2 Positioning of Medium-Term Management Plans
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Consolidated net sales target of \100.0 billion accomplished in the fourth year of the previous medium-term management plan; new medium-term management plan launched in FY2022 Consolidate Performance Consolidated Performance 1st year of previous plan FY2018 2nd year of previous plan FY2019 3rd year of previous plan FY2020 4th year of previous plan FY2021 1st year of new plan FY2022 Net sales \50.5 billion \65.8 billion \83.5 billion \104.7 billion \100.0 billion Operating profit \1.4 billion \1.8 billion \2.6 billion \2.8 billion \2.0 billion EBITDA \2.3 billion \2.6 billion \3.4 billion \3.9 billion \3.5 billion Profit (loss) (\1.2 billion) \0.8 billion \1.5 billion \1.5 billion \0.8 billion 1. Review of the Previous Medium- Term Management Plan Net sales doubled over four years to surpass \100.0 billion Start of new plan
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Revised targets Quantitative Results (1) Third-year sales and income targets accomplished;need for revision in the fifth year due to ongoing investment * Targets were revised in January 2020 in response to the target for net sales being accomplished a year in advance. FY2018 FY2019 FY2020 FY2021 FY2022 658 835 1,047 1,000 750 900 23.8 26.0 34.2 35.9 30 60 Results Net sales massively surpassing target 111% of target 505 Revised targets Initial targets 111% of target Consolidated EBITDA Consolidated Net Sales 39.2 60 Third-year income target nearly accomplished; postponement of new business development in the fifth year to continue investment phase Results 114% of target 59% of target → See next slide for details 35 800 630 Upward revision* Market growth following closure of a major overseas comic piracy website Market growth driven by demand associated with people staying at home 1,000 Initial targets (1st year of previous plan) (5th year of previous plan) (1st year of previous plan) (5th year of previous plan) FY2018 FY2019 FY2020 FY2021 FY2022 1. Review of the Previous Medium- Term Management Plan (3rd year of previous plan) (3rd year of previous plan) (Billions of yen) (Billions of yen)
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) 3rd year of previous plan (FY2020) 5th year of previous plan (FY2022) Greater-than-expected growth in the eBook distribution business, but failure to meet targets Note: Only initial targets were set on a segment basis. eBook Distribution Business Other Businesses Initial targets Results Consolidated Net Sales Consolidated EBITDA Initial targets Forecasts 835 1,000 630 800 543 （86.2%） 823 （98.6%） 87 （13.8%） 12 （1.4%） 609 （76.1%） 930 （93.0%） 191 （23.9%） 70 （7.0%） 34.2 35 60 29 （82.9%） 35.2 （102.8%） 6 （17.1%） 40 （76.1%） 20 （23.9%） 35.9 39.0 （108%） -1.0 （-2.8%） -3.1 （-8.6%） ✓ Massive growth of the eBook market as a result of closure of a major overseas comic piracy website in 2018 and demand related to people staying at home due to the COVID-19 pandemic in 2020 ✓ Cost reductions following system integration but expectation-exceeding bloating of operational management systems and next-generation system development due to growing needs of business partners ✓ Inability to engage in negotiations aimed at improving gross profit margins in light of competitive climate eBook Distribution Business Other Businesses ✓ Overall smooth progress in post-merger integration processes, but divergence from initial plans at certain subsidiaries due to substantial operating environment changes ✓ Delays in performance growth due to full-fledged M&A and investment activities conducted following fund procurement efforts announced in October 2020 ✓ Ongoing losses projected in FY2022 due to upfront investments (Millions of yen) Quantitative Results (2) 3rd year of previous plan (FY2020) 5th year of previous plan (FY2022) Initial targets Results Initial targets Forecasts 1. Review of the Previous Medium- Term Management Plan (Billions of yen)
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Qualitative Results Qualitative targets of the previous medium-term management generally met; full-fledge expansion of peripheral businesses scheduled going forward Completion of system integration between Digital Publishing Initiatives Japan and MEDIA DO but need to improve wholesale functions in response to intensified competition Entry into the metadata marketing business through acquisition of the Firebrand Group; reinforcement of Supadü and other overseas businesses Stimulate the growth of eBook markets Invent future eBook markets Aggressively invest in business expansion Five Priority Measures of the Previous Medium-Term Management Plan Launch of FanTop blockchain-powered NFT service and sale of paper books with NFT benefits through alliance with Tohan Expansion of businesses developing the flier book summary service and globally top-tier MyAnimeList Japanese anime and manga community website Commencement of the imprint (next-generation publishing) business to support digital shift by small and medium-sized publishers and launch of the PUBNAVI publishing ERP business 1. Building a content distribution platform 2. Providing metadata marketing 3. Creating services by leveraging advanced technologies 5. Deploying new services across publishers 4. Vitalizing the media promotion business eBook distribution business Other businesses 1. Review of the Previous Medium- Term Management Plan
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Improvement of financial constitution through equity financing; investments performed to drive future growth Third-party allocation of shares to Mizuho Securities (October 13, 2020) 【Approx. \4.5 billion】 Capital and business alliance with Tohan (March 25, 2021) 【Approx. \3.0 billion】 Total: \7.5 billion ＋ Following investments performed to drive future growth (funded through on-hand funds and equity financing) Acquisition of Growth Investment Funds and Improvement of Financial Position through Equity Financing ・ M&A activities (over \9.0 billion) ・ Blockchain technology development ・ Next-generation eBook distribution system development ・ Human resource recruitment Improvement in financial position marked by net assets surpassing goodwill Benefits 12,104 16,815 8,474 13,857 14.1% 17.0% 28.0% 32.0% 0% 5% 10% 15% 20% 25% 30% 35% 0 5,000 10,000 15,000 20,000 25,000 2019年2月 2020年2月 2021年2月 2022年2月 自己資本 のれん+投資有価証券 自己資本比率 ① Equity financing ② Equity financing ① ② (Millions of yen) 1. Review of the Previous Medium- Term Management Plan FY2021 FY2020 FY2019 FY2018 Net worth Goodwill accounting＋ Incestment securities accounting Equity ratio accounting
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Expansion of Alliances Expenditures for capital and business alliances and M&A activities surpassed \9.0 billion Alliances formed in various investment fields Acquisition Capital and business alliance \2.9 billion \2.5 billion \2.3 billion \1.3 billion JIVE Ltd. Publishing Solution Business Imprint Business Global Business Fan Marketing Business Joint venture with Impress Holdings (established in April 2022) Investment Amount \5.6 billion \3.4 billion Total: \9.1 billion Investment Amount Note: Figures above include projects for which individual amounts are undisclosed. Capital and Business Alliances and M&A Activities after July 2018 1. Review of the Previous Medium- Term Management Plan
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Proficient post-merger integration capabilities demonstrated in massive integration project following acquisition of Digital Publishing Initiatives Japan Note: Supadü (acquired in February 2022) and PUBFUN (established in April 2022) have been excluded due to currently being in the very earl y stages of the post-merger integration process. PMI reporting for acquired companies Delays in expansion and training of editorial and sales staff and other structural reinforcements resulting in sales falling below targets; organizational and management streamlining to be targeted alongside business expansion going forward JIVE Ltd. March 2019 August 2019 October 2020 January 2021 March 2021 December 2021 Growth of MyAnimeList and improved reputation as globally top-tier Japanese anime and manga community website; capital injection from IP holders completed; accelerated overseas deployment of Japanese content commenced Impairment loss of \0.3 billion recorded in FY2021 based on intensified competition and operating environment changes in the comic app business; provision of fan marketing services to be promoted going forward Lower-than-anticipated income due to reinforced security and higher personnel expenses following rising wages and increased hiring, but smooth business growth as a company promoting digital transformation in the U.S. publishing industry Greater-than-expected performance improvement following strong performance of eBooks and how-to books and reduced rates of book returns due to distribution controls; exploration of vertical scroll comics and other new genres Conversion to wholly owned subsidiary following March 2022 acquisition of equity stake from NTT DOCOMO; policy of developing media mix consisting of comic and video content based on submitted novels Name Acquisition Timing Business Progress Integration Status Digital Publishing Initiatives Japan March 2017 Post-merger integration completed through management, business, and awareness integration project spanning three years resulting in MEDIA DO claiming the No. 1 position in the eBook distribution industry M&A Activities after July 2018 Great Problematic Lacking Good Good Good 1. Review of the Previous Medium- Term Management Plan
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) 316 279 362 350 379 582 133 321 80 85 92 412 683 430 464 674 2018年 2月期 2019年 2月期 2020年 2月期 2021年 2月期 2022年 2月期 Consolidated Number of Employees*1 Aggressive recruitment drive focused on engineers and project managers; expansion of Group staff to approximately 600 completed through M&A activities *1 Figures are as of February 28/29 of the given year. Figures for temporary staff do not include subcontractors. *2 Of the number of temporary staff for 2019, 269 employees were associated with Tokushima Data Service, which was a subsidiary at the time. Staff increase from M&A activities, etc. Full-time staff Temporary staff Breakdown of employees by function (520, including other employees) Management 16 (3.1%) Sales, planning 172 (33.1%) Operational management 107 (20.6%) Engineering 156 (30.0%) Corporate 69 (13.3%) Breakdown of Employees by Company (582, Full-time employees, as of February 28, 2022) Firebrand Group (78) Other (79) MEDIA DO(308) Nihonbungeisha (64) Flier (53) Breakdown of employees by employment type 520 employees Managers (directors, Audit & Supervisory Board members, executive officers) 16 (3.1%) Full-time employees 300 (57.7%) Other (temporary staff, subcontractors, etc.) 204 (39.2%) Breakdown of employees by gender (Excluding other employees) Women 151 (47.8%) Note: The ratio of men in management is 78.8% and the ratio of women in management is 21.2% Men 165 (52.2%) Changes in Staff Distribution Of which, Tokushima Data Service*2 269 MEDIA DO Co., Ltd. (As of March 1, 2022) 1. Review of the Previous Medium- Term Management Plan FY2021 FY2020 FY2019 FY2018 FY2017
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Imprint Publishing Solutions Fan Marketing Global Cultivation into new earnings pillars eBook Distribution Complete cultivation of new earnings pillars founded on trust fostered thus far Plan Objectives 2. Overview of the New Medium-Term Management Plan eBook Distribution Current earnings pillar Transactions with more than 2,200 domestic publishers and over 150 eBook distributors Trust Mission Unleashing a virtuous cycle of literary creation Prior Accomplishments Contribution to market growth by promoting distribution of authentic content as the No. 1 domestic eBook wholesaler
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) MEDIA DO’s Growth Strategies to Invent Future eBook Markets 1. Operational reforms and streamlining ✓ eBook distribution ✓ Sale/royalty distribution ✓ Bibliographical information management ✓ Overseas expansion support ✓ Position of digital content assets → Provision of digital content endowed with a concept of ownership Publishing Industry Digital Transformations Made Possible by MEDIA DO 2. Business model reforms ✓ Creation of new services → Publishing imprint, media, etc Industry digital transformation made possible by MEDIA DO’s position and technology MEDIA DO’s Strength 1: Position MEDIA DO’s Strength 2: Technology Trust from business partners that can distribute authorized digital content and access to people and information Technological capabilities for leading digital transformation of the publishing and content industries 2. Overview of the New Medium-Term Management Plan
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Policies Shaping the Medium-Term Management Plan Plan Logic and Overview ✓ Ongoing growth of the eBook market, despite rising impact of overseas comic piracy websites ✓ Change in role expected of distributors (role of providing functions for reducing costs and boosting sales) ✓ New possibilities brought about by Web3 and digitization (NFT, vertical scroll comics, etc.) ✓ Inescapable need to redesign the wholesaling system ✓ Requirement for human resource recruitment to boost competitiveness, internal workflow streamlining, and development of post-merger integration systems ✓ Expectations related to financial strategies and also governance and sustainability measures eBook Distribution Business Imprint Business Publishing Solution Business Global Business Fan Marketing Business Unleashing a virtuous cycle of literary creation More Content for More People! Leverage MEDIA DO’s position to help grow publishing and content markets through synergies between people, IT, and strategies Vision Mission Management Policy MEDIA DO’s Corporate Philosophy and Vision Opportunities, Risks, and Social Issues to Be Addressed Establishment of business-specific, medium- to long-term themes, strategies, targets, and KPIs Balance between managing risks and growing and strengthening progress management systems ✓ Governance, ERM ✓ Human capital / financial strategy development Operating Environment Internal Conditions Strategic Directives Corporate Divisions → Evolution into entity supporting digital transformation of the content industry Publishing Platformer Strategic Directives 1. Operational reforms and streamlining 2. Business model reforms 2. Overview of the New Medium-Term Management Plan
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Target consolidated net sales of \150.0 billion and EBITDA of \10.0 billion in the fifth year of the new medium-term management plan Numerical Targets Consolidated performance FY2021 FY2022 FY2024 (3rd year of plan) FY2026 (5th year of plan) Net sales \104.7 billion \100.0 billion \120.0 billion \150.0 billion Operating profit \2.8 billion \2.0 billion \4.0 billion \8.5 billion EBITDA \3.9 billion \3.5 billion \5.5 billion \10.0 billion Profit attributable to owners of parent \1.5 billion \0.8 billion \2.8 billion \6.0 billion ROE 10.9% 5.2% 15.0% 23.0% 2. Overview of the New Medium-Term Management Plan The numerical targets in the medium-term management plan are under review (as explained on page 37 of the financial results briefing FY2023 3Q, disclosed on January 15, 2024).
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Revision of reportable segments in FY2022 to reflect the new medium-term management plan Prior Segments ✓ Other businesses New Segments ✓ Stimulate the growth of eBook markets ✓ Invent future eBook markets Ambiguity in distinction between segments in presentation materials leading to intermixing and lack of clarity with regard to business growth and strategies Separate management of the mainstay eBook distribution business 1. eBook distribution business 2. Other businesses 1. eBook distribution business FY2021 net sales: \96,257 million (approx. 92% of total) 2. Strategic investment businesses FY2021 net sales: \8,897 million (approx. 8% of total) ✓ Imprint business ✓ Publishing solution business ✓ Global business ✓ Fan marketing business ✓ Book distribution business Segments as Displayed in Strategies Business Segments Business Segments Reportable Segment Revision 2. Overview of the New Medium-Term Management Plan Segments as Displayed in Strategies
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Segment Breakdown 対象子会社／サービス Book Distribution Business Imprint Business Publishing Solution Business Global business Fan Marketing Business JIVE Ltd. Applicable Subsidiaries/Services Development of Japan’s largest eBook distribution business boasting relationships with more than 2,200 domestic publishers and over 150 eBook distributors Provision of wholesale business process outsourcing services Publication and sale of how-to books, comics, novels, and magazines in both physical and digital formats Novel submission website operation and image production business Comic coloring and picture production support Development of imprint next-generation publishing business and operation of girl’s comics label Operation of the flier book summary service (Joint venture with Impress Holdings) Expansion of the print on demand market through integration of corporate and private print on demand services (Service) eBook sales management and integrated royalty management system for paper books and eBooks The MEDIA DO Group’s global business base in San Diego Provision of NetGalley online book marketing tool Deployment of bibliographical information management, information distribution, and eBook distribution services in the United States Supply of publisher sales websites on an SaaS basis to customers including major U.S. publishers (Service) NFT marketplace developed by MEDIA DO Operation of the globally top-tier MyAnimeList community website focused on Japanese anime and manga Operation of comics app and provision of fan marketing services Operation of free digital comics distribution service IP Acquisition/Cultivation Planning/Publishing (Support) Wholesaling/Distribution Global Sales/Marketing 2. Overview of the New Medium-Term Management Plan
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Establishment of additional earnings pillars using stable earnings generated by the eBook business Prior Segments New Segments eBook distribution Approx. 95% Breakdown of Net Sales by Segment Others Approx. 5% eBook distribution Approx. 92% eBook distribution Approx. 75% FY2021 FY2026 (Final year of plan) FY2021 Strategic investment Approx. 8% Sales Contributions by Segment Strategic investment Approx. 25% Segment reorganization ✓ Imprint ✓ Publishing solution ✓ Global ✓ Fan marketing 2. Overview of the New Medium-Term Management Plan
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) (1) eBook Distribution Business 23 Copyright 2022 MEDIA DO Co., Ltd. All rights reserved. ｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years)
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Imprint Business Publishing Solution Business Global Business Fan Marketing Business Core business gaining trust through ability to handle authentic content Business Policies eBook Distribution Business ✓ No change to unique position fostered as Japan’s largest eBook distribution business operator ✓ Solidification of industry position through alliance with Tohan and development of operational excellence via streamlining and addition of functions Improve frameworks and systems to solidify MEDIA DO’s position in the eBook distribution business (1) eBook Distribution Business
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Vision Strengthen position as an industry infrastructure provider through further reduction of distribution energy use and provision of additional functions Grow the eBook market by reducing distribution energy use Provide data marketing and other new functions Develop new products and grow market for non-graphic eBooks ✓ Streamline database management, campaign operation, and banner production processes ✓ Support small, medium-sized, and new market participants through comprehensive outsourcing for various processes required of publishers and eBook distributors ✓ Provide data marketing and other new functions taking advantage of newly developed core system and industry-leading database ✓ Achieve compatibility with vertical scroll comics, audiobooks, and other new formats that may emerge in the future ✓ Coordinate with publishers and eBook distributors to roll out sales promotion measures for growing market for non- graphic eBooks Vision under the New Medium-Term Management Plan Measure 2 Measure 3 Measure 1 (1) eBook Distribution Business
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 eBook Market Size Trends Ongoing growth forecast in the eBook market Improved performance and increased digital transformation investment among publishers and eBook distributors driven by eBook market growth → Growth opportunities for MEDIA DO (1) eBook Distribution Business (Billions of yen) 182.6 76.8 141.1 101.3 482.1 255.6 375.0 227.8 537.8 577.2 65.1 609.3 641.4 Forecast in eBook Marketing Report 2021 Forecast in eBook Marketing Report 2019 674.7 +22.1% Forecast in eBook Marketing Report 2020 312.2 Growth spurt due to shutdown of major overseas pirate sites in April 2018 +28.5% Stay-at-home consumption growth driven by pandemic Annual upward revisions in response to greater-than- expected market growth
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Comics market grew 23% YoY Digitalization of non-graphic books still has a lot of room to run Comics total 621.0 (66.3%) 411.4 Up 4.1pt YoY Non-graphic books total 701.5 Magazines total 352.6 (2.8%) 9.9 (6.4%) 44.9 Up 0.6pt YoY Non-graphic eBooks account for 30-40% of US and Chinese publishing markets Note: AJPEA Statistics classify 90% of comic books in the "magazine" category. In the graph above, comic books classified as magazines in this way are counted as “comics.” Additionally, comic sales include only comic books (both hard-copy and digital) while comic magazines (both hard-copy and digital) are included in the “magazines” category. (Source: All-Japan Magazine and Book Publishers and Editors Association (AJPEA)) Japan’s publishing market by segment (2020) (Billions of yen) 208.7 656.6 342.7 (1) eBook Distribution Business Publishing Market Size by Genre
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Impact of Business Transference of Major Partner Net sales \19.0 billion Earnings contributions \0.4 billion Incorporation of sales, operations, and development staff and related costs FY2021 Earnings Contributions from LINE MANGA* Impact on FY2022 Performance (Net Sales of LINE MANGA*2) FY2022 performance forecasts formulated by fully accounting for transition in sales channels for LINE MANGA * Figures use net sales of LINE Digital Frontier, the company operating LINE MANGA. Maximum possible impact on performance accounted for based on preliminary calculation assuming that sequential transition commenced in the second quarter of FY2022 (50% year-on-year decrease *2 Prompt notification will be provided should a change in schedule or another event occur with the potential to impact performance warranting disclosure occur. 1Q 4Q 3Q 2Q Note1: The graphs are visual approximations and do not accurately reflect actual performance and plan target figures. Note2:For more details, please refer to "Notice regarding status of transactions with main business partner, and earnings forecasts for current fiscal year" announced on April 14, 2022. 0% 100% (1) eBook Distribution Business
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) 100.0% 110.0% 120.0% 130.0% 140.0% 150.0% 160.0% No change to unique position in the eBook distribution industry; potential for business growth in conjunction with future market growth Growth Rate of MEDIA DO’s eBook Distribution Business and Market → Possibility of temporary decline in sales, but potential for accelerated business growth in conjunction with future market growth Transactions with rapidly growing publishers and eBook distributors Source: eBook Marketing Report 2021 on Japanese Market, Impress Research Institute Competitive Edge in eBook Distribution Growth rates exceeding market growth by 10.8 percentage points on average over past seven years Sales planning and operation management team comprised of approximately 300 employees 当社電子書籍流通事業 市場全体 In-house developed wholesale platform and distribution system Growth rate for FY2017 omitted due to integration with Digital Publishing Initiatives Japan; FY2021 market growth rate represents estimates (1) eBook Distribution Business Our eBook Distribution Business the market as a whole
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Next-Generation System Development Transition to next-generation core system in order to contribute to further market growth while maintaining competitiveness 1. Alleviation of technical debt allowing for swift and flexible development 2. New functions utilizing Japan’s largest eBook sales database 3. Compatibility with vertical scroll comics and other new types of content 4. Reduction of distribution energy use through efficient campaign operation, etc. 5. Provision of dashboard services to publishers MEDIA DO Integration Current Core System Next-Generation Core System Digital Publishing Initiatives Japan Reduced costs following integration of systems of Digital Publishing Initiatives Japan and MEDIA DO Higher development costs due to technical debt and concern for future declines in performance Transition March 2017 Conversion into subsidiary (1) eBook Distribution Business March 2019 Completion February 2021 Discontinuation of prior systems
DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) (2) Imprint Business 31 Copyright 2022 MEDIA DO Co., Ltd. All rights reserved. ｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years)
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Accelerate and streamline IP creation centered on eBook distribution functions in response to rising content demand Imprint business = Next-generation publishing business based on digital technologies Separation of infrastructure and editorial functions to develop efficient publishing processes and distinctive lineups Business Policies (2) Imprint Business eBook Distribution MEDIA DO Group’s Publishing Platform Functions Imprint label Imprint label Imprint label Publishing Shaped by New Ideals I. Marketing II. System Development III. Back-Office IV. POD Solutions 1. Marriage of market- and product-oriented perspectives in sales and planning 2. Conduct production prioritizing digital formats (reduction of dependence on paper) IP analysis, customer analysis, market analysis, etc. Inventory management, production management, sales management, etc. Human resources, accounting, general affairs, legal affairs, etc. Inventory control through PUBFUN Provision of infrastructure functions ・・・
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Produce content and reinforce and expand publishing platform functions through intra-Group coordination Develop new frameworks for generating content Strengthen publishing platform functions Expand the imprint business through alliances ✓ Entrench new, digital-oriented content production processes ✓ Create diverse content by utilizing Group publishing companies, submission websites, and picture production/color functions ✓ Separate editorial functions from infrastructure functions (marketing, system development, corporate, etc.) ✓ Streamline operations while maintaining distinctive editorial functions for generating unique content ✓ Promote alliances with and acquisitions of content holders as well as IP creation and utilization within the Group Vision under the New Medium-Term Management Plan Vision Measure 2 Measure 3 Measure 1 (2) Imprint Business
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) JIVE Ltd. Contributions to content industry development by maximizing IP value for small and medium-sized publishers using MEDIA DO’s infrastructure ・ Distribution of more than 2.0 million works ・ Contributions from more than 1.4 million authors ・ More than 750 works published in physical formats ・ More than 16,000 works available ・ More than 14,000 published works ・ Aggregate sales of 500.0 million works 【Publishers】 【Production support】 【Novel submission website】 【Free viewing service】 MEDIA DO Group Imprint Business Companies Partnership with publishers Acceleration of multi-content approach through partnerships with content producers Novels Vertical scroll and other comics TV dramas, movies Anime 【Publishers】 (2) Imprint Business
DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) (3) Publishing Solution Business 36 Copyright 2022 MEDIA DO Co., Ltd. All rights reserved. ｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years)
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Business Policies 1. Slow progress in digitization due to presence of large numbers of small and medium-sized publishers 2. Shrinking paper book market and room for efficiency improvement given high rate of returned books 3. Globalization and growth of market for non-book digital content 4. Rising complexity of industry needs pertaining to usage formats, campaigns, etc. Industry Issues eBook distribution Paper books with NFT benefits Accessible libraries Print on demand services Vertical scroll comic production and distribution support services Digital library services … Enhance BtoB services that contribute to industry development by taking advantage of our position in the eBook distribution industry (3) Publishing Solution Business
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Coordinate with the industry to explore new business opportunities; cultivate vertical scroll comics ecosystem Promote digital transformation of physical and digital publishing through coordination with Tohan Promote new alliances (print on demand joint venture, etc.) Cultivate vertical scroll comics ecosystem ✓ Expand the business of selling paper books with NFT benefits; collaborate with physical bookstores to sell eBooks and otherwise invigorate the physical publishing market ✓ Popularize digital library services and pursue other coordinated approaches for promoting the digital transformation of the publishing industry ✓ Continue to develop alliances for invigorating the publishing industry (PUBFUN print on demand joint venture established with Impress Holdings in April 2022, etc.) ✓ Establish environment for importing content from overseas and producing original content ✓ Develop eBook wholesale and other distribution infrastructure ✓ Maximization of IP value through coordination with other companies (3) Publishing Solution Business Vision under the New Medium-Term Management Plan Vision Measure 2 Measure 3 Measure 1
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Coordinate with Tohan, realize new creation and distribution eco system of publication by Physical x NFT Collaboration of lead distributors of paper books and e-books, for solving industry’s issue and value creation Coordinate with Tohan ③ 出版ソリューション事業 The largest e-book distributor in Japan connecting 2,200 publishers and 150 e-book stores Connects 3,000 publishers and 5,000 book stores, occupies over 1/3 of paper book distribution 1.Publication with NFT benefits ✓ Coordinate with Tohan, acquires the market by distributing books to about 5,000 bookstores across Japan ✓ Only collaboration of MEDIA DO and Tohan can distribute “Genuine Products” via Physical (paper books) ✓ Gain recognition by delivering trustworthy NFT to users 2.Promoting Introduction of e-book library ✓ Utilizing Tohan’s 16 branches across Japan, promote introduction of OverDrive system, which can provide over 3.7 Mn. Contents in 100 languages ✓ Contributing to solve social issues under limited access to physical books due to COVID-19 pandemic and progress in digitalization (3) Publishing Solution Business
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Establishing trustworthy brand of “MEDIA DO” who can distribute genuine NFT Publisher: Kodansha; On sale: December 8 ✓ As distributor of paper and electronic books, fully utilize its position and relationships in the industry, promote distribution of genuine products. ✓ Achieved price increase of book by giving additional value ✓ Contributes to gain recognition and user acquisition of FanTop Expanding recognition of NFT and development of the market Actual sales * Over 80% （2 mths. after release) Unit Price increased Approx. +37.9% * According to TOHAN UP Versus regular edition Coordinate with Tohan (3) Publishing Solution Business Purchase books Users Acquire benefits Tohan Stores ✓ Actual sales of special edition: Apporx.+20% ✓ Average price increased: Approx.+20%
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) World’s Largest Digital Library Service Provider System with more than 3.7 million pieces of content Largest Domestic Paper Book Distributor Sales capabilities and network comprised of 16 nationwide bases Largest Domestic eBook Distributor eBook distribution expertise Progress in removing prior accessibility obstacles; massive increase in usage projected Digital Library Services ✓ Usable without trips to the library ✓ Benefits for addressing disparities in education and providing learning opportunities ✓ Text-to-voice engine that provides easy-to-understand output even at high speeds developed based on the needs of people with impaired vision ✓ User interface allowing for easy use by people with impaired vision without the need for assistance Accessible Library Adoption rate* 27.7% * Source：Association for E-publishing Business Solution Contributions to provision of reading opportunities for people with impaired vision based on relevant legislation; promotions capitalizing on advantages of unrivaled Alliance with Tohan (3) Publishing Solution Business Number of service contracts: 31 Growth rate (YoY) : Approx.＋50% Of which, 21 are due to collaboration with Tohan.
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) ③ 出版ソリューション事業 PUBFUN Pursuit of unrivaled share through establishment of PUBFUN joint venture between two print on demand service leaders Impress Holdings, Inc. Next Publishing Authors Press service with strengths pertaining to individual users* PUBRID subsidiary boasting strong corporate services * Operated by Impress Holdings subsidiary Impress R&D Promotion of market growth by flexibly addressing new needs of authors and publishers, including those related to the self-publishing individuals that have recently been gaining attention or to the provision of publishing opportunities for non-publishing companies ✓ Publication of works that previously would not have had the opportunity ✓ Reduction of inventory risks through small-lot publication (prevention of books from going out of print) ✓ Improvement of publication diversity for readers (3) Publishing Solution Business Content production Amazon Stores Others Individuals (Authors) Companies (Publishers) Benefits of POD
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Rapidly growing vertical scroll comics market stimulating new growth in the publishing market ✓ Potential for global deployment ✓ High unit prices and continuation rates ✓ Contribution to new business models unrestrained by previous frameworks ✓ Ability to capture new users Characteristics of Vertical Scroll Comics Growth of the Vertical Scroll Comics Market 2017年 2018年 2019年 2020年 Source: 2021 webtoon company survey report, Korea Creative Content Agency Note: Won values were translated to yen at a rate of ¥0.1 to ₩1. Scale of South Korea’s Webtoon Market ₩379.9 billion (\38.0 billion) ₩463.3 billion (\46.6 billion) ₩640.0 billion (\64.0 billion) ₩1,053.8 billion (\105.4 billion) Rapid growth to 2.8 times in size over three years (3) Publishing Solution Business 2017 2018 2019 2020 (CY)
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) ＋ Coordination with market participants (publishers, production studios, eBook distributors, etc.) worldwide Contributions to healthy market growth through involvement in both production and distribution of vertical scroll comics (3) Publishing Solution Business Jive Ltd. Source: Source: Global Webtoons Market Size, Status and Forecast 2022-2028, QYResearch (Dollar values translated to yen at a rate of ¥120 to $1) Entry into Vertical Scroll Comics Market Content distribution/procurement Content production/production support Original work provision Position Contribute to healthy market growth through content distribution taking advantage of Global webtoon market expected to grow from scale of \440.0 billion in 2021 to \3,150.0 billion by 2028
DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) (4) Global Business 45 Copyright 2022 MEDIA DO Co., Ltd. All rights reserved. ｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years)
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Japan Overseas (4) Global Business Business Policies Acquire high-share publishing SaaS business operators; develop global infrastructure for supporting market growth Cutting-edge publishing digital transformation success stories, global publishing network Exportation of NFT and other new technologies, provision of capital BtoB operations linking publishers to distributors (Customer base including four major domestic publishers [Kadokawa, Kodansha, Shueisha, and Shogakukan]) BtoB operations supplying tools to publishers and distributors (customer base including Penguin Random House and four other major global publishers) Expansion of customer network and supplementation of functions (including M&A activities)
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Improve presence of the MEDIA DO Group as a publishing service platform provider in the global market Establish global position as a publishing infrastructure provider Deploy new services on global basis, introduce successful digital transformation approaches into Japan Enhance functions and systems of Media Do International ✓ Advance post-merger integration of the Firebrand Group and Supadu and coordinate sales and systems ✓ Improve presence as a vertical SaaS provider in European and U.S markets and become an indispensable entity to the industry ✓ Utilize network of European and U.S customers, including five major U.S. publishers, to develop an NFT platform and export Japanese content ✓ Apply successful digital transformation approaches to the Japanese publishing industry and develop services through intra-Group coordination ✓ Enhance management systems of overseas subsidiaries to facilitate future M&A activities ✓ Bolster the MEDIA DO Group’s overseas information distribution capabilities through W3C and other venues Vision under the New Medium-Term Management Plan Vision Measure 2 Measure 3 Measure 1 (4) Global Business
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) 60 70 80 90 100 110 120 130 140 150 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Domestic publishing market excluding comics Comics Market in Japan Publishing Market in the U.S. Publishing Market in Germany Importation of Overseas Digital Transformation Services Promotion of publishing industry digital transformation through importation of industry-specific SaaS services boasting high overseas shares Publishing Market Scales by Country (2010 indexed to 100) Ongoing decline in the domestic non-graphic publishing market; strong growth in overseas markets due to self-driven progress in digital transformation Provision of services that contribute to invigoration of the domestic publishing industry and culture Source: All-Japan Magazine and Book Publishers and Editors Association Importation of digital transformation services with high overseas shares Strong position in the domestic publishing industry Massive disparity between the domestic market for comic and non-comic eBooks due to progress in comic digitization Clear difference in strength of European and U.S. markets over the past decade Note: The U.S. publishing market is growing when including self- publishing (digital publishing, print on demand, submission websites, etc.) (4) Global Business 145.5 95.6 92.0 68.1
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) ✓ Services boasting No. 1 shares used by more than 100 companies, including two major U.S. publishers ✓ Annual churn rate of zero ✓ Services used by more than 500 companies, including five major U.S. publishers ✓ Annual churn rate of 3% ✓ Services used by more than 240 companies, including five major U.S. publishers (when including indirect provision) ✓ Annual churn rate of less than 3% Ability to capitalize on growth of the global content market following development of global publishing infrastructure network* * Shares of U.S. companies Quality Solutions (Firebrand) and NetGalley acquired by San Diego-based subsidiary Media Do International; shares of U.K. company Supad ü acquired by NetGalley’s U.K. subsidiary NetGalley UK. Overview of Global Business Group Companies Comprehensive Publishing Data Management and Analysis Tools Communication Marketing Tools Comprehensive Direct-to-Consumer Tools Digital Technologies Content = Rapid globalization of the content market resulting in unprecedented content demand Steady business growth to be pursued in conjunction with content market growth by bolstering presence as an infrastructure provider supporting the global publishing market (4) Global Business
DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) (5) Fan Marketing Business 50 Copyright 2022 MEDIA DO Co., Ltd. All rights reserved. ｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years)
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Business Policies Create unique NFT distribution frameworks capitalizing on MEDIA DO’s strengths in technologies and content Trends in the Brisk NFT Market ✓ Entry by numerous players ranging for venture companies to large-scale companies backed by technological capabilities ✓ Small number of promising players in the content industry → Necessary to lower barriers to entry of IP holders for further market expansion Limited number of players capable of contributing to healthy market development (5) Fan Marketing Business ✓ Strong appetite for market entry among Disney and other IP holders of all sizes ✓ Acts carefully due to its generic characteristics of NFT (e.g. transparent, unerasable) ✓ Speculative capital influx targeting certain art content ✓ Lack of authentic quality, issues with counterfeit content Technologies Content Market
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Strengthen relationships between IP holders and fans; develop made- in-Japan framework for distributing authentic NFT content Promote development of NFT content through coordination with IP holders Develop differentiated NFT ecosystem Facilitate direct communication between IP holders and fans ✓ Strengthen relationships with publishers as well as holders of music, images, games, and other diverse IP ✓ Create unique NFT fan items in addition to the physical fan items currently available ✓ Promote sales through FanTop, establish NFT marketplaces for overseas use through MyAnimeList, and support NFT business initiatives of IP holders ✓ 3D items viewed via 3D app. and further advanced NFT contents ✓ Provide various services for realizing content production, distribution, and sale based on communication with fans in preparation for Web3 Vision under the New Medium-Term Management Plan Vision Measure 2 Measure 3 Measure 1 (5) Fan Marketing Business
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Understanding of aims and issues of IP holders backing ability to drive the NFT market by increasing authentic content distribution Unleashing a virtuous cycle of literary creation MEDIA DO’s Solutions and Basis for Solutions Mission MEDIA DO’s Roadmap to Success eBook distribution track record NFT track record Track record of handling authentic content using No. 1 position in the domestic eBook distribution industry Distribution of paper books with digital NFT benefits through alliance with Tohan → Distribution of only authentic NFTs Rare position with view of the entire industry allowing for an accurate understanding of content and IP holder issues *1 “Major publishers” defined as all companies among the publishers that are members of the Japan Book Publishers Association (394 as of July 31, 2021) excluding those involved with audiobooks and other activities not traditionally considered publishing Inspections Direct verification of authenticity (5) Fan Marketing Business Trust ・FY2021 gross transaction value: \158.0 billion ・Relationships with all major publishers*1
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Source of Differentiation 1: Track Record in Distributing Authentic Content Acceleration of authentic content distribution by bolstering MEDIA DO’s presence through utilization of sources of differentiation Sources of Differentiation for MEDIA DO 1. Connections with bookstores across Japan through alliance with Tohan 3. White-label product sales 2. Functions of FanTop app 4. Marketing support through direct-to-fun services Japan Publishing Market \1.6 trillion Japan Music Market \0.8 trillion Content Holders Publishers, image producers, music labels, etc. A preliminary figure of \9.0 billion is used for FY2026 gross transaction value for the purposes of the medium-term management plan. (5) Fan Marketing Business ※1 Institute of Publication Science ※2 Digital Content Association of Japan「Digital content white paper 2021」
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Source of Differentiation 2: Development and Technological Capabilities Guarantees of content authenticity through FanTop; provision of functions for enjoying content AR room function AR function Trade Protect Enjoy Protection features for IP holder Features for fans • Protection of Digital Content Assets® (registered trademark of MEDIA DO) through digital rights management • Adoption of Flow in blockchain • 3D model display functions • AR display and room functions • New functions for enjoying virtual spaces with VR technologies Provision of both protection and enjoyment functions Provision of functions spanning the value chain (5) Fan Marketing Busness (5) Fan Marketing Business
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Source of Differentiation 3: Direct-to-Fun Services New way of supplying content to fans in Web3 realized through MEDIA DO Group services equipped with direct-to-fun functions * Direct to Fun WEB2.0 Web3 Importance of forming direct connections with customers due to decentralized control 1. Marketing Changes Brought about by Transition to Web3 2. Changes in Values and Consumption Behavior Need to form communities to create direct connections with fans • Services allowing for no-code production of monthly subscription fan clubs • Ability to tailor marketing based on communities formed by individual fan clubs • Globally top-tier Japanese anime and manga community website • Ability to reach Japanese anime and manga fans around the world Tracking key to targeting users Purchasing and ownership activities not driven purely by price or function value among core fans; rising importance of communicating the sentiments and concepts encapsulated in content (5) Fan Marketing Business • NFT market place where digitalized “Fan Items” (collectibles for fans) are distributed, and fans can fully enjoy by collecting, viewing and sharing/transferring/trading among fans.
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Reinforcement of corporate governance in conjunction with transference of stock to the Tokyo Stock Exchange (TSE) Prime Market • Introduction of the executive officer system • Publication of the first integrated report • Formulation of ESG policies • Formulation and revision of the MEDIA DO Basic Corporate Governance Policy in conjunction with revision of Japan’s Corporate Governance Code • Appointment of the first female director • Establishment of the Nomination and Compensation Committee • Transference of stock to the TSE Prime Market • Establishment of the Sustainability Committee 2020 2021 2022 Improvement of Groupwide governance through enhancement of Group management frameworks 4. Corporate Governance System Strengthening of Corporate Governance Systems
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Yasushi Fujita Shin Niina Atsushi Mizoguchi Four Internal Directors Two Outside Directors Designated as External Directors Note: The following directors will be proposed for appointment at the General Meeting of Shareholders scheduled to be held onMay 26, 2022. New director appointments scheduled for approval at the General Meeting of Shareholders to be held on May 26, 2022; pursuit of more transparent and objective oversight functions → Phased increase in the ratio of outside directors and transition from management-oriented Board of Directors (involvement of directors in executive decision-making) to monitoring-oriented Board of Directors (oversight of operational execution of managers) Six Directors New New New Management Team Director, Vice President, and COO President and CEO Member of the Nomination and Compensation Committee Hiroshi Kanda Director and CBDO Chairperson of the Nomination and Compensation Committee Ayako Kanamaru Member of the Nomination and Compensation Committee Haruo Miyagi Director, CSO, and CFO Chairperson of the Sustainability Committee 4. Corporate Governance System
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Board of Directors (4 internal directors, 2 outside directors, 1/3 ratio of outside directors) Sustainability Committee Representative Director Executive Committee Audit & Supervisory Board Internal Audit Office Executive Officers(6) Audit Report Report Report Nomination and Compensation Committee (3 or more members including representative director, majority of outside directors, chaired by outside director) Operating Divisions / Companies Establishment of the Sustainability Committee; incorporation of risks and opportunities into management strategies Established in June 2022 by reorganizing the Risk Management Committee, tasked with comprehensive risk management and maximization of business opportunities based on social issues Establishment of the Sustainability Committee Established in June 2021 to improve objectivity and transparency of officer nominations and compensation decision processes 4. Corporate Governance System
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) 5. Financial Strategies / Shareholder Returns Investment and M&A Policies Promotion of aggressive investment for becoming a game changer; regular revision of business portfolio Conduct policy or leadership changes or sale of / withdrawal from acquisitions projected to generate ROIC of less than 7% after the third year Business portfolio revision policy Imprint Business Publishing Solution Business Global Business Fan Marketing Business Partnerships and alliances with IP holders Enhancement of SaaS businesses with large shares that serve major publishers Alliances with vertical scroll comic production studios and eBook distributors Alliances for growing businesses and bolstering competitiveness in the NFT and Web3 fields Future Investment and M&A Targets Numerous M&A opportunities made possible due to presence based on trust earned in the eBook distribution business
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Financial Targets and Cash Flow Management Creation of ongoing growth cycle through earnings capacity augmentation and disciplined cash flow management Growth Financial Targets (FY2026) Cash Flow Management Profitability Efficiency Shareholder returns ROE of around 20% Total return ratio of around 30% *1 Five-year aggregate for period of medium-term management plan *2 The boxes are visual approximations and do not accurately reflect plan target figures. Cash Flows Debt repayment Shareholder returns Growth investments, etc. *2 Augmentation of business earnings capacity Net sales of \150.0 billion Operating margin of 5% or more Profit attributable to owners of parent \15.0 billion or more*1 Depreciation \5.0 billion or more*1 5. Financial Strategies / Shareholder Returns
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Renovate and relocate offices to revitalize inter-employee communication diminished by the COVID-19 pandemic Office Renovation and Relocation of Group Company Offices Renovation of eighth floor of the MEDIA DO head office with goal of making a space to which employees feel excited to go Relocation of offices of Group companies (Nihonbungeisha, Flier, Nagisa) to same building as the MEDIA DO head office → Renovation and relocation expense of \4.6 billion (increasing FY2023 expenses by \2.2 billion, including \1.2 billion in one-time expenses) incurred to catalyze teamwork, communication, and consequently innovation 5. Financial Strategies / Shareholder Returns
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Consolidated EBITDA (Billions of yen) ∸5.0 ∸1.3 ∸0.6 +1.0 Growth of eBook Distribution Business Decrease in major business partners Publishing Solution Business eBook distribution ∸1.6 39.2 35.9 ∸1.0 +3.4 +2.1 M&A Impact （EVERYSTAR, Supadü） Fan Marketing Business ＋0.3 Global Business Imprint Business ∸2.2 Increase in personnel expenses etc. Renovate and relocate offices Strategic investment ∸0.6 Others ∸1.1 5. Financial Strategies / Shareholder Returns Profit decrease in FY2022 due to lower earnings in the eBook distribution business and upfront investment in strategic investment businesses FY2021 Results FY2022 Target Plan for the fiscal year ending February 28, 2023
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) EBITDA target of \10.0 billion to be accomplished by creating a second business axis FY2021 FY2022 (1st year of plan) FY2025 (3rd year of plan) FY2026 (5th year of plan) eBook distribution Imprint Publishing solution Global Fan marketing 104.7 100.0 3.9 3.5 Consolidated EBITDA Consolidated Net Sales Examination of potential future M&A activities for expanding business eBook distribution 75% 120.0 Strategic investment 25% 150.0 5.5 10.0 Performance Targets FY2021 FY2022 (1st year of plan) FY2025 (3rd year of plan) FY2026 (5th year of plan) Strategic investment 50% eBook distribution 50% 5. Financial Strategies / Shareholder Returns (Billions of yen) (Billions of yen) The numerical targets in the medium-term management plan are under review (as explained on page 37 of the financial results briefing FY2023 3Q, disclosed on January 15, 2024). The numerical targets in the medium-term management plan are under review (as explained on page 37 of the financial results briefing FY2023 3Q, disclosed on January 15, 2024).
｜MEDIA DO Co., Ltd. Medium – Term Management Plan FY2022-2026 (Five Years) Conduct stock buybacks totaling \1.0 billion in FY2022; raise total return ratio in phased manner going forward Total return ratio*1 *1 Total return ratio = (Total dividend payments + Total treasury stock acquisitions) ÷ Profit attributable to owners of parent Shareholder Returns Policy 20% or more Previously: FY2022 and forward: 30% or more Shareholder Returns-Related Indicators FY2018 FY2019 FY2020 FY2021 (tentative) FY2022 (forecast) Profit (loss) -1,243 884 1,519 1,576 850 Total dividend payments*2 130 184 322 333 0 Stock buybacks - - - - 1,000 Total return ratio N/A*3 20.1% 20.1% 21.1% 117.6% *2 Dividend payments for FY2021 will be decided at the Board of Directors’ meeting to be held on April 21, 2022. *3 No figure is displayed for total return ratio in FY2018 as a loss was recorded in this year. (no dividend issued) (Millions of yen) Shareholder Returns Policies 5. Financial Strategies / Shareholder Returns
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