Impact of advertisers' cautious stance on advertising demand and business performance

「As a result, the Group's advertising business revenue was ¥885 million, or 101.8% of the year-earlier period, and the segment loss was ¥108 million, compared with a loss of ¥128 million in the year-earlier period.」

「In addition to the decline following the recognition of a large one-off project in the previous consolidated fiscal year, the timing of revenue recognition for advertising packages in the sports marketing business was deferred to the following fiscal year or later. As a result, the Group's advertising business revenue was ¥2,044 million, or 99.8% of the previous fiscal year, and the segment recorded a loss of ¥18 million, compared with a profit of ¥30 million in the previous fiscal year.」

「During the current interim consolidated accounting period, in addition to maintaining steady orders for internet advertising, the Group received orders for events promoting regional tourism and food culture, a comprehensive sports competition targeting seniors, advertising related to the House of Councillors election in July, and office building renovation work. As a result, advertising business revenue came to ¥869 million, or 105.7% of the same period of the previous year, while the segment posted a loss of ¥128 million, compared with a loss of ¥162 million in the same period of the previous year.」

「Advertising demand increased against a backdrop of increased foot traffic and strong inbound tourism, while internet advertising also grew as society continued to go digital,」

「During the six-month cumulative period, internet advertising increased steadily and we continued to receive stable orders for website production and other services. In addition, outdoor advertising, including transit advertising, increased against a backdrop of greater foot traffic and inbound tourism. Revenue from the Group's advertising business was ¥822 million (96.8% year on year), while the segment loss was ¥162 million, compared with a loss of ¥91 million in the prior-year period.」

「In the advertising business, the Group undertook promotional activities related to travel and events as opportunities to go out increased, as well as promotional activities for the 35th National Health and Welfare Festival in Ehime, held in Ehime Prefecture in late October last year, the redevelopment around JR Takamatsu Station, and local employment and career-change support fairs. However, local companies became more cautious about placing advertisements due to soaring raw material and energy prices, and sales were at the same level as the previous year.」

「As advertising demand increased with the resumption of companies’ promotional activities accompanying the normalization of economic activity, companies showed strong interest in promotional activities using digital technologies, against the backdrop of the broader shift toward digitalization across the economy.」

「Sales at the Tokushima-Kagawa Tomoni Market remained at the same level as before its reopening, resulting in advertising business revenue of ¥857 million (100.0% year on year) and a segment loss of ¥107 million (loss of ¥59 million in the same period of the previous year) for the Group.」

「During the three-month period ended in the first quarter, the company steadily secured orders in digital marketing, particularly internet advertising, as well as orders for events promoting the appeal of the Setouchi region, the construction of exhibition booths for local companies at trade shows and customer-attraction events for mass retailers and other businesses. As a result, advertising business revenue was ¥386 million (103.9% year on year), and the segment loss was ¥92 million (loss of ¥85 million in the same period of the previous year).」

「In the Group's operating area, local companies became cautious about placing advertisements amid concerns over sluggish personal consumption due to higher prices and the end of stay-at-home demand. However, business performance improved, particularly in tourism and accommodation, due to the easing of activity restrictions and nationwide travel support measures, and advertising placements generally began to recover as various events resumed, although conditions varied by industry.」

「As a result, in addition to internet advertising and printed materials related to domestic travel, the Group received orders for advertising placements associated with the year-end and New Year shopping season, new stores and exhibition booths, as well as television commercials and Web video production. Advertising business revenue came to ¥1,319 million, or 106.6% of the same period of the previous year, while the segment posted a loss of ¥72 million, compared with a loss of ¥125 million in the same period of the previous year.」

「Although advertising orders varied by region and month, the Group’s advertising orders were generally on a recovery trend, in line with moves toward the resumption of economic activity.」

「As a result, in addition to steadily securing orders in the digital marketing field, centered on internet advertising, the Group received orders for printed materials related to domestic travel, anniversary events and store construction. Advertising business revenue came to ¥372 million, or 113.7% of the same period of the previous year, while the segment posted a loss of ¥85 million, compared with a loss of ¥116 million in the same period of the previous year.」

「As a result of efforts to improve margins by bringing production in-house, margins on orders improved toward the end of the fiscal year, resulting in segment profit of ¥58 million, compared with a segment loss of ¥136 million in the previous fiscal year.」

「As a result, advertising placements recovered in industries such as travel and leisure as the number of new novel coronavirus infections declined. The Group also received orders for advertising related to new-store renovations and the House of Representatives election, and advertising business revenue came to ¥1,238 million, while the segment posted a loss of ¥125 million, compared with a loss of ¥232 million in the same period of the previous year.」

「Although advertising activities, particularly events, were postponed or suspended in response to requests to refrain from going out following a sharp increase in new COVID-19 cases, more than a year had passed since infection-prevention measures were introduced, and local companies launched new initiatives and businesses. The company won orders related to the opening of new stores and exhibition venues, resulting in advertising business revenue of ¥791 million and a segment loss of ¥101 million (loss of ¥191 million in the same period of the previous year).」

「As a result, internet advertising increased, while advertising placements for television commercials also rose and the local Olympic torch relay was held. The advertising business generated revenue of ¥327 million, and the segment loss was ¥116 million (loss of ¥162 million in the same period of the previous year).」

「The Group's advertising business revenue was ¥6,241 million (76.2% of the previous fiscal year).」

「During the nine-month period ended in the third quarter, the company received orders for promotional activities related to the government's Go To campaign. However, COVID-19 began spreading again around November of the previous year, forcing companies to implement measures to prevent its spread, and advertising order volume during the year-end and New Year sales season, when an increase in advertising demand had been expected, was lower than usual. As a result, the Group's advertising business revenue was ¥4,349 million (72.9% year on year), and the segment loss was ¥232 million (loss of ¥51 million in the same period of the previous year).」

「Events continued to be cancelled or postponed, companies continued to voluntarily refrain from advertising to avoid the 3 Cs, and advertising placements remained suspended as business performance deteriorated. As a result, the Group's advertising business revenue was ¥2,632 million (67.1% year on year), and the segment loss was ¥191 million (loss of ¥43 million in the same period of the previous year).」

「During the three-month period ended in the first quarter, events were repeatedly cancelled or postponed, companies voluntarily refrained from advertising to avoid the 3 Cs, and some stopped placing advertisements altogether as their business performance deteriorated. As a result, advertising order volume declined sharply, and the Group's advertising business revenue was ¥1,135 million (58.9% year on year), with a segment loss of ¥162 million (loss of ¥61 million in the same period of the previous year).」

「In addition to the cancellation or downsizing of events and voluntary restraint on advertising activities from late February onward as measures against COVID-19, the contraction in inbound consumption led to a significant decline in advertising placements. As a result, Group revenue was ¥8,186 million (93.4% of the previous fiscal year).」

「However, alongside changes in companies’ marketing communications strategies, advertising budgets were reviewed and consolidated in urban areas, among other developments. Combined with caution about placing advertisements, this reduced the volume of advertising in printed materials such as newspaper inserts, resulting in Group revenue of ¥5,985 million, or 98.2% of the same period of the previous year, and gross profit of ¥1,096 million, or 95.8%.」

「Companies remained cautious about placing advertisements, resulting in advertising business revenue of ¥3,920 million (98.7% year on year) and a segment loss of ¥43 million (segment loss of ¥25 million in the same period of the previous year).」

「Amid uncertainty over the economic outlook caused by difficulties in hiring and the rise in the consumption tax rate, companies became more cautious about placing advertisements, resulting in fewer orders for printed materials and advertising business revenue of ¥1,925 million (99.0% year on year) for the Group.」

「In the Group's operating area, a preference for saving continued amid the impact of the heavy rains in western Japan and concerns about the revision of the consumption tax rate. Against this backdrop, the Group continued working to provide services that would deliver high customer satisfaction, with the aim of providing the region's No. 1 communications services, while strengthening its ability to propose digital media, enhancing the added value of its services, strengthening coordination among Group locations, collaborating with business partners and holding seminars on web advertising operations. However, these efforts did not offset the decline in the volume of business handled through existing media, and Group revenue was ¥6,094 million (94.2% year on year).」

「However, local companies remained cautious about spending their advertising budgets, reflecting increasingly diverse consumer purchasing behavior, and the Group’s revenue came to ¥3,985 million, or 94.8% of the same period of the previous year.」

「However, companies' increasingly cautious approach to the timing of advertising expenditure led to shorter event periods and slower advertising placements for new promotional projects. As a result of an overall decline in advertising placements, the Group's advertising business revenue was ¥1,946 million (93.5% year on year).」

「Higher service standards demanded by consumers and increasingly diverse preferences changed customers’ marketing strategies, which surfaced as reductions in event scale, reviews of advertising media and consolidation of advertising budgets. As a result, the Group’s revenue came to ¥8,817 million, or 94.8% of the previous fiscal year.」

「In the advertising business, the company received orders for new store openings, store renovations, customer-attraction events and various exhibitions, mainly from the retail, automotive and education sectors, as well as for a summit to promote tourism and events related to the Ehime National Sports Festival. However, in addition to market contraction due to the declining birth rate and the need to respond to rising service standards and diversifying needs, advertisers' investment in new digital promotional initiatives led to media reviews and changes, consolidation of advertising budgets and smaller event sizes, while also pressuring profit margins. As a result, the Group's advertising business revenue was ¥6,452 million (98.3% year on year), and the segment recorded a loss of ¥14 million (segment profit of ¥60 million in the same period of the previous year).」

「During the six-month period ended in the second quarter, the company received orders for new store openings, store renovations and events to attract new customers, mainly from the retail, automotive and education sectors, as well as for a summit to promote tourism to the local area. However, advertisers reviewed their advertising budgets and allocations, resulting in advertising business revenue of ¥4,191 million (96.5% year on year) for the Group.」

「The Group worked to improve profit margins by providing high-value-added services, but some advertisers remained cautious about spending their advertising budgets. As a result, the segment posted a loss of ¥31 million, compared with a loss of ¥33 million in the same period of the previous year.」

「In addition to stable advertising placements from major advertisers, the company promoted sales of digital media and undertook new initiatives, including promotional activities using YouTube videos and LINE stickers.」

「Amid continued uncertainty over the economic outlook, advertisers remained cautious about allocating advertising budgets, and changes in advertising media and awarded projects reduced profit margins. As a result, the segment loss was ¥33 million (loss of ¥31 million in the same period of the previous year).」

「Advertisers have become increasingly cautious about promotional activities, and the decline in corporate sentiment has led to changes in advertisers’ sales models, cancellations of advertising placements and reductions in advertising budgets associated with downsizing sales activities.」