Message from the President

Hakuhodo DY Holdings was formed on October 1, 2003, so the Hakuhodo DY Group has been in existence for exactly 20 years. Our Group, formed through the merger of three Japanese advertising companies, has grown to now encompass more than 400 companies, including overseas entities. With a workforce of over 25,000 employees, we continue to expand our business domains beyond the confines of advertising.

We aim to achieve sustainable business growth by leveraging our strength in creativity and becoming a value creation partner in the evolution of companies’ marketing. As partners to sei-katsu-sha, we also strive to continue creating new value that contributes to social development. As we approach our next milestone, we are collectively challenging ourselves to embark on new endeavors in such value creation.

Meanwhile, we deeply apologize to our shareholders and other stakeholders for the significant inconvenience and concern caused by the indictment of a Group employee on suspicion of violating the Antimonopoly Act in relation to the Tokyo 2020 Olympic and Paralympic Games in February 2023.

We are determined to work to the fullest extent possible to restore trust in our Group by thoroughly enforcing business compliance.

Over the past 20 years, the advancement of digitalization has transformed the advertising industry. The Group has already expanded its business activities into various fields beyond the advertising sector. Also, during the period of the current Medium-Term Business Plan, society and the economy have felt the impact of unexpected events such as the COVID-19 pandemic.

Amid the accelerating shift to digitalization, which is one of the core environmental changes, we have updated our strategies to respond swiftly and flexibly to change. I believe we are making steady progress toward our goals under newly adopted initiatives to transform the services we provide, strengthen cross-organizational functions to accelerate transformation, continuously pursue transformation based on existing strategies, and strengthen our foundation for sustainable business management.

Although centered on the advertising business, our business has undergone significant changes. Regardless of their industry or sector, our clients’ businesses have also been transforming rapidly as a result of digitalization.

In response to this trend, the Hakuhodo DY Group has expanded the scope of its activities to contribute to the evolution of its clients’ marketing and business activities through full-funnel Sei-katsu-sha Data-Driven Marketing. This covers all aspects of marketing by making full use of our strength in sei-katsu-sha data.

The list of business and specialist companies that make up the Group demonstrates that we have evolved into a corporate entity that extends beyond the traditional boundaries of an advertising company to offer a diverse range of functions and services.

We have been strengthening our data and technology offerings in order to promote digital transformation (DX) of the media business, which has been a fundamental source of revenue to date. In particular, we have developed and deployed a unique Advertising as a Service (AaaS) model. We have seen steady progress and numerous results from our efforts to provide high added value to both media and clients.

Marketing DX efforts mainly target clients. In this area, cross-Group organization HAKUHODO DX_UNITED provides various solutions for building marketing infrastructure and data analysis. By crossing our media DX and marketing DX efforts, we are substantially transforming the Group’s offerings.

As it expands beyond the framework of an advertising company, we recognized the need to reinforce the Group’s technological core to enhance overall competitiveness further. To this end, in April 2022 we established HAKUHODO Technologies Inc. This company, which is recruiting talented engineers and other technologists, will consolidate and augment the Group’s leading-edge technological expertise. Meanwhile, in April 2023 we formed Hakuhodo DY Corporate Initiative Inc. to provide Groupwide oversight and make corporate functions more sophisticated and efficient. As a result, in addition to our existing media function (Hakuhodo DY Media Partners), we have evolved into a Group with three shared foundations.

While having these function as the core of the Hakuhodo DY Group, we aim to leverage Group synergies to further improve the value creation capabilities of the Group.

In terms of expanding our global business, we have achieved steady growth centered on the marketing communications business while effectively pursuing M&A, particularly in Asia. Additionally, through kyu, the strategic operating unit that enhances the Group’s specialization and innovation, we continue to pursue strategic M&A deals. Through such acquisitions, we welcome unique and cutting-edge companies into the Group, thereby expanding our functions, with a focus on advanced consulting services. As a result, in fiscal 2022 gross profit in the overseas business domain rose to 25.8%* of consolidated gross profit.

In addition, we are actively engaged in activities to accelerate innovation through external collaboration. We have established specialized organizations (such as the MIRAI Business Division) within Hakuhodo and other core operating companies to engage in various joint venture projects and launch new companies. We have also invested in more than 50 startups through the HAKUHODO DY FUTURE DESIGN FUND, our corporate venture capital arm, which is run by Hakuhodo DY Ventures Ltd.

* This figure indicates the percentage of consolidated gross profit (excluding investment business) accounted for by the overseas business domain in fiscal 2022.

We are also working to strengthen our foundation for sustainable business management from a medium- to long-term perspective.

In April 2022, we established the Corporate Sustainability Division to serve as the Group’s hub for sustainable management. We recognize that creative human resources are our most valuable source of value creation. As human capital is our greatest asset, diversity and growth of human resources as well as respect for human rights are crucial themes. Beginning in fiscal 2022, we are making steady progress in promoting diversity, equity, and inclusion (DE&I) initiatives and conducting human rights due diligence.

In the ESG domain, our efforts on the environmental (E) front include response to climate change by disclosing environmental targets in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). We are also engaging in efforts focused on 2030, the target year for achieving the Sustainable Development Goals (SDGs), and 2050, the year in which companies and governments alike aim to achieve carbon neutrality. In fiscal 2023, we are accelerating the activities of each Group company, not just our core subsidiary Hakuhodo.

To attain our topmost values of Sei-katsu-sha Insight and Commitment to Partnership, we must be trusted by sei-katsu-sha and society. To achieve this, each of us must be vigilantly aware of compliance and strive for integrity in our business practices.

We are committed to continuously improving and strengthening the governance system of the Group overall and make concerted efforts to create mechanisms and raise awareness toward addressing such issues as respect for human rights, climate change, and broader social challenges. We need to progress in order to coexist and thrive with our diverse stakeholders, and we aim to always be proactive in these efforts.

We feel keenly responsible for the public outcry over the alleged violation of the Antimonopoly Law in connection with the Tokyo 2020 Olympic and Paralympic Games. We have already taken measures to prevent recurrence, and are committed to deploying these measures as quickly and effectively as possible. We strongly resolve to re-instill strict compliance awareness and the pursuit of integrity in all our employees throughout the Group.