ValueCommerce (2491) Q4 2024 earnings summary

Executive summary

• Net sales increased 3.4% year-over-year to ¥30,410 million for FY2024, driven by recovery in Affiliate Marketing and growth in StoreMatch, despite a year-on-year income decline due to strategic investments and higher SG&A expenses.

• Operating income declined 20.5% year-over-year to ¥4,160 million, and net income attributable to owners fell 16.0% to ¥2,855 million, impacted by increased income taxes and investments.

• Year-end dividend increased by 3 yen to ¥57.00, with a payout ratio of 50.3%, reflecting strong performance against initial plans.

• Major business restructuring includes the planned absorption-type merger with Dynatech inc. and the termination of key service agreements with LY Corporation.

• Agreement with respect to StoreMatch and STORE's Roo will be terminated July 31, 2025, with transition support services provided.

Financial highlights

• FY2024 net sales: ¥30,410 million (+3.4% year-over-year); operating income: ¥4,160 million (-20.5% year-over-year); EBITDA: ¥4,594 million (-19.4% year-over-year); net income attributable to owners: ¥2,855 million (-16.0% year-over-year).

• Q4 net sales: ¥8,142 million (+6.5% year-over-year, +11.4% sequentially); operating income: ¥1,038 million (-23.8% year-over-year, +12.4% sequentially).

• Gross margin was ¥9,983 million, slightly down from ¥10,149 million the previous year; gross income margin declined as cost of sales increased 6.1% year-over-year.

• SG&A expenses rose 18.4% year-over-year.

• Basic EPS: ¥113.24; ROE: 16.2%.

Outlook and guidance

• FY2025 full-year forecast: net sales ¥23,900 million (-21.4% year-over-year), operating income ¥2,500 million (-39.9%), net income ¥2,100 million (-26.5%).

• The forecast includes ¥1 billion compensation from LY for transition support services, but revenue decline expected due to termination of StoreMatch and STORE's Roo agreements, with an estimated ¥7.3 billion impact.

• Strategic investments to continue, especially in new business areas and social commerce.

• Absorption-type merger with Dynatech planned for April 1, 2025.

• Dividend payout ratio target remains at 50% or more; forecast annual dividend per share: ¥49.00.