Decline in Advertising Demand and Business Interruptions Due to the Novel Coronavirus Disease

「During the first-quarter cumulative consolidated period (1 April 2023 to 30 June 2023), Japan progressed toward the normalisation of social and economic activity following the global pandemic, including the classification of COVID-19 as a Class 5 infectious disease, while」

「During the current consolidated fiscal year (1 April 2022 to 31 March 2023), social and economic activity was moving toward normalisation in anticipation of the end of the COVID-19 pandemic, while」

「During the third-quarter cumulative consolidated period (1 April 2022 to 31 December 2022), policy shifted from emergency measures implemented over 3 years toward economic normalisation, while global conditions grew increasingly unsettled due to tensions between the United States and China and Russia's invasion of Ukraine. In Japan, cost-push inflation progressed as food, raw material and energy prices, labour costs and distribution costs rose, and the domestic economic environment remained uncertain. Against this backdrop, the operating environment for the domestic advertising business improved on expectations of economic normalisation and a recovery in inbound demand, but the recovery trend remained gradual.」

「Although the seventh wave of COVID-19 infections arrived, restrictions on activities were kept to a minimum in an effort to balance infection prevention with economic activity, and signs of recovery continued, led by personal consumption.」

「During the cumulative third quarter period (1 April 2021 to 31 December 2021), the state of emergency and priority preventive measures introduced due to the fifth wave of COVID-19 infections in the latter half of the first half were lifted from October, and the business environment surrounding advertisers and sponsors of the Company's media began to improve in the third quarter. However, the outlook remained uncertain as a highly transmissible new variant spread in various parts of the world toward year-end.」

「Following the fourth wave of pandemic infections, which peaked in mid-May, the fifth wave in the second quarter resulted in several times the previous numbers of infected and treatment-requiring patients, restricting the movement of people and the operations of restaurants and other businesses in urban areas nationwide and curbing regional economic activity.」

「The first-quarter cumulative consolidated period (1 April 2021 to 30 June 2021) began with rising expectations for the restart of the domestic economy, as COVID-19 vaccinations were being scheduled in Japan. However, the third declaration of a state of emergency was issued at the end of April and extended before its expiration, and restrictions on domestic economic activity, including in regional areas, intensified particularly in May.」

「The operating environment for the advertising industry remained challenging throughout the fiscal year, as a resurgence of infections in the third wave from around November led to a reissuance of the state of emergency in January and other measures.」

「However, the resurgence of infections overseas from late October and the third wave of infections in Japan in November led to the nationwide temporary suspension of Go To Travel in December and increasingly severe restrictions on travel and economic activity as the year-end approached, making the operating environment surrounding the advertising industry even more challenging.」

「During the second-quarter cumulative consolidated period, economic activity rapidly stagnated under the impact of COVID-19, which had expanded globally since the end of the previous fiscal year, leaving regional economies in an unprecedentedly difficult situation. Restrictions on the business activities of many advertisers (sponsors) and the deterioration of the business environment led to restraint in spending on advertising and other marketing activities, making the operating environment for the advertising business even more challenging.」

「During the first-quarter cumulative consolidated period, the suspension and stagnation of economic activity nationwide to prevent the spread of COVID-19, which had expanded globally since the end of the previous fiscal year, adversely affected companies nationwide regardless of industry or size, leaving regional economies in an unprecedentedly difficult situation. In addition, a resolution of the pandemic and a full-scale resumption of economic activity were still not expected,」

「The spread of COVID-19 infections in Japan has continued. Restrictions on going out and holding events following the declaration of a state of emergency have caused advertising demand to plummet, and the media advertising business was affected by a decline in advertising orders in March 2020.」