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Message from the President and CEO

信太明

Thank you for your support. On Friday, July 13, 2018, AUN Consulting Inc. announced its financial results of fiscal year ending May 2018.I would like to give a brief update on these results.

During the consolidated fiscal year under review (June 1, 2017 to May 31, 2018), the Japanese economy continued its moderate recovery against a background of improved corporate earnings and a stronger employment and income environment, however an uncertain future remained due to the instability of the international situation.
With regards to the domestic Internet advertising market, the primary area of business for the AUN Group, video advertisements for mobile devices have picked up and driven growth in the field of programmatic advertising, with Internet advertising expenditures for 2017 reaching 1 trillion 509.4 billion yen (up 15.2% year-on-year). (Dentsu Inc. “2017 Advertising Expenditures in Japan”).
Additionally, in the inbound market, the number of tourists visiting Japan from abroad in 2017 was 28.69 million (up 19.3% compared to the same period of the previous year), the largest number of visitors since statistics started being collected in 1964 (Japan National Tourism Organization (JNTO) "Visitor Arrivals"). With the economic growth of Asian countries, it is anticipated that the number of tourists visiting Japan will continue to increase and that the demand for promotions aimed at foreign visitors will continue to grow in Japanese companies.
Given this situation, the AUN Group’s top priority has been ensuring stability and expansion of profitability, and it has devoted its efforts to strengthening overseas and multilingual marketing support, ensuring stable operations of its asset services, and focusing on strengthening the organization through human resources development, in order to expand business.
As a result of the above factors, performance in this consolidated fiscal year under review saw a total turnover of 1,896.875 million yen (down 1% compared to the same period of the previous year), with an operating profit of 10.398 million yen (down 69.6% compared to the same period of the previous year), ordinary profit of 7.083 million yen (down 76.9% compared to the same period of the previous year), and a net profit of 1.011 million yen attributable to parent company shareholders (down 96.2% compared to same period of the previous year).

1. Marketing services
Against a background of vigorous inbound demand, particularly from the Asian-region, increased monetization of the growth areas of the multilingual (non-Japanese language) and overseas promotions domains boosted sales and profits. As a result, during the consolidated fiscal year under review, the AUN Group was able to steadily shift to becoming a global company, with a 53% share of sales in the overseas and multilingual domain and 62% gross profit. While sales and profit in the overseas and multilingual domain increased, both sales and profits in domestic Japanese language PPC services were down year on year due to the termination of contracts with certain clients.
Furthermore, in order to accelerate the expansion of earnings in the future, as a result of aggressively expanding the network of overseas affiliates, such as with the hiring and training, etc., of global human resources, both domestically and internationally, and the new establishment of a Vietnamese subsidiary, costs have been preceding.
As a result of the above, turnover for these services was 1,794.576 million yen (down 4.5% compared to the same period of the previous year), with a segment profit of 167.391 million yen (down 19.2% compared to the same period of the previous year).

2. Asset services
In its asset services, the AUN Group has been providing infrastructure such as offices for companies and condominiums for overseas employees as part of its support for overseas expansion of Japanese companies in the Philippines and Vietnam, where high economic growth continues even compared to other ASEAN member nations. During the current consolidated fiscal year, the AUN Group has endeavored to increase customer satisfaction and gain customer trust by having our CEO himself take the podium at not only seminars held by the Group itself, but also external seminars held in Osaka and Nagoya, to dispatch realistic information gained through on-site inspections. As a new initiative, the AUN Group was able to record sales and profits from the sale of real estate held for sale by a consolidated subsidiary in the Philippines. In addition, the AUN Group started real estate brokerage business in Seattle and is also carrying out local inspection tours.
In this consolidated fiscal year under review, costs have been preceding as a result of continuing aggressive activities such as the recruitment of human resources, expansion of the organization’s scale, investment of promotional activities and cultivation of newly partnered developers; however, profits and losses have greatly improved due to an increase in sales.
As a result of the above, turnover for these services was 102.298 million yen (up 177.6% compared to the same period of the previous year), with a segment loss of 302 thousand yen (a segment loss of 17.773 million yen for the same period of the previous year).

We look forward to your continued generous support.

AUN Consulting, Inc.
President & CEO
Akira Shida

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