Avex Group Holdings Inc.

Avex Group Holdings Inc.
21st Semiannual Business Report
'07.04.01-'07.09.30
01
To Our Shareholders
Medium-Term Business Vision of the Avex Group
To evolve into an “Entertainment Brand Company”
with the strongest creative and communication capabilities in Asia.
To Our Shareholders
The Avex Group is pleased to inform shareholders of its results for the
issues that need to be tackled have become evident. The Group will
six-month period ended September 30, 2007 in this Semiannual
continue in its endeavors to solve each of these issues and take
Business Report.
advantage of its core strengths to develop the Visual Content Business
Looking back on the six-month period, the production value of CDs
into a major source of Group revenue following the Music Business.
announced by the Recording Industry Association of Japan (RIAJ)
To promote the platform concept employed in Japan in Asia, the
decreased by nearly 6% year on year, demonstrating the severe
Company has endeavored to produce and distribute entertainment
conditions we are now facing. Two years ago, the Group implemented
content beyond national borders within a larger Asian framework. In
structural reforms, in which we hammered out strategies for the
the future, we will further work to cooperate and refine partnerships
music package industry in response to the harsh business
with various individuals and companies and evolve the business
environment. Specifically, these strategies focused on breaking away
model that we have built thus far, aiming to become “Asia’s Avex”
from the record company-style business model to become a
rather than “Japan’s Avex.”
comprehensive entertainment company.
The Group firmly believes that ensuring a long-term overall return
The Group will continue to concentrate its efforts on creating new
of profit to our shareholders is one of the most important
music trends and booms. The Group will also strengthen its talent
management policies of the Group and we stand by our policy of
management capabilities by utilizing its accumulated know-how to
maintaining an annual dividend of 40.0 yen per share (including 20.0
foster artists and consider how to connect “hits” with business while
yen per share for the interim dividend) for the 21st term.
acquiring and owning rights related to our artists and talent. That is to
Next year represents a major turning point for us—not only will we
say, the Group will aim to change its business into an evolutionary
celebrate our 20th anniversary, but it will also mark 10 years since we
production business.
went public. We sincerely appreciate the support of our many
The Visual Content Business, in which the Group engages in
shareholders and stakeholders, including users, offered thus far, and
unison and in friendly rivalry, has to date not proceeded as planned.
will steadfastly continue to endeavor to realize the Group’s medium-
However, in the three years since the Group made full-scale entry into
term business vision with agile mobility.
the business, it has accumulated precious experience and a variety of
In closing, I ask for your continued understanding and support.
December 2007
Masato Matsuura
CEO
Avex Group Holdings Inc.
02
To Our Shareholders
21st Semiannual Business Report
Results of Operations
In the CD package market, the production
from January 2007 to September 2007
from the same period last year (according to a
value of CDs during the period from April
increased by 42.1% from the corresponding
survey by the Japan Video Software
2007 to September 2007 decreased by 5.8%
period of the previous year (according to a
Association [JVSA]).
from the same period last year (according to a
survey by RIAJ). This market continued to
Amid this backdrop, the Group’s
survey by the Recording Industry Association
show steady growth centering on music
consolidated sales and operating income
of Japan [RIAJ]), thus reflecting continued
download services for cell phones.
during this semiannual period recorded
tight market conditions. In sharp contrast, in
In the video software industry, overall
45.545 billion yen (up 9.9% year on year) and
the online distribution market, sales for fee-
sales of DVD software during the period from
1.221 billion yen (up 180.4% year on year),
based online distribution during the period
April 2007 to September 2007 dropped 3.0%
respectively.
Interim Consolidated Statements of Income
Account
(Unit: Millions of yen)
20th Interim
21st Interim
From April 1, 2006 through
September 30, 2006
From April 1, 2007 through
September 30, 2007
Amount
Amount
41,437
45,545
Cost of sales
27,415
29,489
Gross profit
14,021
16,056
13,586
14,835
435
1,221
314
110
4
25
10
7
Operating income
Non-operating revenues
Interest income
Dividend income
Profit from investment partnership
221
28
Damages received
—
19
Others
78
29
Non-operating expenses
363
835
Interest expense
119
271
Commission fee
14
17
Bond issuance costs
—
31
193
450
35
64
386
497
26
381
Gain on sales and redemption of investment securities
19
20
Gain on transfer from allowance for business closings
—
142
Returned lease payments due to business closings
—
113
Profit from prior B/S account liquidation
—
68
6
35
281
262
Investment loss on equity method
Others
Ordinary income
Special profits
Others
Special losses
Loss on sales and disposition of fixed assets
Loss on permanent impairment write-down on investment securities
Loss on cancellation of lease contracts
Others
3
7
261
186
—
26
16
41
131
615
Income taxes–current
821
151
Income taxes–deferred
(166)
772
Net income before income taxes and minority interests
Minority shareholders’ income (loss)
Net income (loss)
(Unit: Millions of yen)
Sales (Millions of yen)
50,000
Sales
Selling, general and administrative expenses
Consolidated Performance
(0)
(54)
(523)
(254)
40,000
45,545
41,437
38,179
30,000
20,000
10,000
0
19th Interim
20th Interim
21st Interim
Operating Income/Ordinary Income (Millions of yen)
Operating income
Ordinary income
2,500
2,000
1,999
2,153
1,500
1,221
1,000
497
435 386
500
0
19th Interim
20th Interim
21st Interim
Interim Net Income/Interim Net Income per Share (Millions of yen)
Interim net income
Interim net income per share
1,087
1,000
30
25.32
500
15
0
0
-5.92
-12.19
-254
-500
-523
19th Interim
20th Interim
21st Interim
-15
03
Semiannual Financial Highlights
Consolidated Balance Sheets
(Unit: Millions of yen)
20th Interim
21st Interim
20th Interim
21st Interim
As of September 30, 2006
As of September 30, 2007
As of September 30, 2006
As of September 30, 2007
Amount
Amount
Amount
Amount
Account
Account
Assets
Liabilities
Current assets
30,245
39,785
Current liabilities
Fixed assets
52,072
58,381
Long-term liabilities
26,761
35,061
Total liabilities
1,219
1,240
24,091
22,080
Property and equipment
Intangible fixed assets
Investments and other assets
23,250
51,181
66,066
30,205
31,825
Common stock
4,229
4,229
Capital surplus
5,001
5,001
Retained earnings
26,441
28,062
Treasury stock
(5,466)
(5,468)
Shareholders’ equity
824
(286)
Valuation difference on other securities
868
(374)
Foreign currency translation adjustments
(43)
88
52
208
Share warrants
55
352
Total amount of net assets
31,137
32,100
Total amount of liabilities and net assets
82,318
98,167
Minority interest
82,318
42,815
6,720
Net assets
Valuation or foreign exchange differences
Total assets
44,460
98,167
Consolidated Statements of Cash Flows
(Unit: Millions of yen)
Account
20th Interim
21st Interim
From April 1, 2006 through
September 30, 2006
From April 1, 2007 through
September 30, 2007
Amount
Amount
Cash flow from operating activities
(5,198)
(668)
Cash flow from investing activities
(7,520)
(396)
Cash flow from financing activities
10,639
1,734
55
724
6,371
(4)
(11)
Foreign currency translation adjustments on cash and cash equivalents
(2,089)
Net increase (decrease) in cash and cash equivalents
5,486
Cash and cash equivalents at beginning of period
(116)
Increase (decrease) in cash and cash equivalents due to changes in the scope of consolidation
3,280
Cash and cash equivalents at end of interim period
S e m i a n n u a l
F i n a n c i a l
H i g h l i g h t s
7,091
Consolidated Statements of Change in Shareholders’ Equity
(Unit: Millions of yen)
Shareholders’ equity
Current interim period
(From April 1, 2007 through September 30, 2007) Common
stock
Amount outstanding as of March 31, 2007
4,229
Capital
surplus
5,001
Valuation or foreign exchange differences
Total amount of
shareholders’
equity
Retained
earnings
Treasury
stock
29,169
(5,467) 32,931
Valuation
difference on
other securities
277
Share
Foreign currency
Total amount of
warrants
translation
valuation or foreign
adjustments
exchange differences
(42)
234
130
Minority
interest
Total
amount of
net assets
402
33,699
Change during the interim consolidated account year
Surplus dividend *1
(858)
(858)
(858)
Interim net loss
(254)
(254)
(254)
(0)
(0)
6
6
Acquisition of treasury stock
(0)
Increase in retained earnings due to the
decreased number of consolidated subsidiaries
6
Net change in items except shareholders’ equity
during the interim consolidated account year
—
Total change during the interim consolidated account year
—
—
Amount outstanding as of September 30, 2007
4,229
5,001
(1,106)
28,062
*1 Items for appropriation of profit at the Regular General Shareholders Meeting in June 2007.
(0)
(1,106)
(5,468) 31,825
(651)
130
(520)
(651)
130
(520)
78
(50)
(1,599)
(374)
88
(286)
208
352
32,100
78
(50)
(492)
04
Semiannual Financial Highlights
21st Semiannual Business Report
Package Communication (PC) Business
Network Communication (NC) Business
This segment produces and sells packaged music and visual content.
This segment conducts online digital distribution of music and visual
content, operates the membership website “mu-mo” and fan clubs, and
conducts merchandising business.
Before elimination of intersegment revenues
Before elimination of intersegment revenues
PC Business
Sales
(Unit: Millions of yen)
20th Interim
21,037
Cost of sales
21st Interim
19,969
NC Business
Changes
(1,068)
Sales
Cost of sales
(Unit: Millions of yen)
20th Interim
21st Interim
Changes
10,250
12,807
2,556
6,871
8,117
1,245
3,379
4,689
1,310
18,032
16,508
(1,524)
3,005
3,460
455
Gross profit margin
14.3%
17.3%
3.0%
Gross profit margin
33.0%
36.6%
3.6%
Total SG&A expenses
3,633
3,747
114
Total SG&A expenses
2,858
3,249
390
Operating income (loss)
(628)
(287)
341
Operating income (loss)
520
1,440
919
(3.0%)
(1.4%)
1.6%
5.1%
11.2%
6.1%
20,912
19,866
(1,045)
9,593
12,281
2,687
Gross profit
Operating margin
Sales to unaffiliated customers
Gross profit
Operating margin
Sales to unaffiliated customers
Along with the expansion of the market of “Chaku-Uta Full®,” a feeSales reached 19,969 million yen (down 5.1% year on year) due to
based online distribution service for cell phones, the online
a decrease in major titles of commissioned labels, while operating
distribution business showed steady growth. In addition, the
loss stood at 287 million yen (down 341 million yen year on year)
number of members of the membership website “mu-mo”
due to the improved gross profit margin.
increased significantly compared with last year. Consequently,
sales reached 12,807 million yen (up 24.9% year on year). We
recorded operating income of 1,440 million yen (up 176.7% year
on year) as a result of the improved gross profit margin.
Live Communication (LC) Business
Content Creation (CC) Business
This segment plans and produces live entertainment, including live
concerts and other events.
This segment produces music and visual content and conducts the
management of artists and talent.
Before elimination of intersegment revenues
Before elimination of intersegment revenues
(Unit: Millions of yen)
20th Interim
21st Interim
Changes
5,120
6,621
1,500
4,462
5,985
1,523
658
635
(23)
Gross profit margin
12.9%
9.6%
(3.3%)
Total SG&A expenses
288
369
80
Operating income (loss)
370
266
(103)
7.2%
4.0%
(3.2%)
4,530
5,708
1,177
LC Business
Sales
Cost of sales
Gross profit
Operating margin
Sales to unaffiliated customers
(Unit: Millions of yen)
20th Interim
21st Interim
Changes
19,030
21,309
2,279
9,871
11,944
2,072
9,158
9,365
207
Gross profit margin
48.1%
44.0%
(4.1%)
Total SG&A expenses
9,507
10,279
771
Operating income (loss)
(348)
(913)
(564)
(1.8%)
(4.3%)
(2.5%)
5,513
6,567
1,054
CC Business
Sales
Cost of sales
Gross profit
Operating margin
Sales to unaffiliated customers
Both the frequency of performances and attendance at live
Sales amounted to 21,309 million yen (up 12.0% year on year)
concerts were up, resulting in sales of 6,621 million yen (up 29.3%
partly due to an increase in income from artist management.
year on year). Operating income, meanwhile, recorded 266 million
Operating loss was 913 million yen (up 564 million yen year on
yen (down 28.0% year on year) due to an increase in the cost of
year) due to an increase in SG&A expenses.
sales.
05
Avex Domestic Artists
Av ex J a p a n e s e A r t i s t s
T h e
F a c e s
Main Domestic Artists/A to Z (As of September 30, 2007)
ACOUSTIC ASTURIAS
Namie Amuro
asphalt frustration
BRIGHT
DAKOTA STAR
Every Little Thing
Nanase Aikawa
Yuko Ando
AIR
Kumiko Aizawa
Beni Arashiro
BACK-ON
C-999
DA PUMP
EXILE
ARIA
BAZRA
GANGA ZUMBA
ASIA ENGINEER
BeForU
Caravan
DELICATESSEN
AKINA
CEYREN
DJ EMMA
GIANT SWING
Hironari Amano
ASIAN2
BoA
Chokesleeper
COLOR
DRM
8-BALL
globe
Ayumi Hamasaki
06
Avex Domestic Artists
21st Semiannual Business Report
Miyuki Hatakeyama
HINOI Team
Nanase Hoshii
J Soul Brothers
KIRITO
Kumiko
Marty Friedman
m-flo
Mariko Ide
kaede
hiro/Coco d'Or
Eriko Imai (elly)
Takuya Kanatsuki
kiyo
Tetsuya Kuwayama
Kumi Koda
Lambsey
mink
Janne Da Arc
MAY
misono
Aiko Kayo
Riyu Kosaka
LISA
MAX
hitomi
J
Tsuyoshi Kawakami and His Moodmakers
Shunsuke Kiyokiba
lecca
HITOE
Taro Iwashiro
kannivalism
Akihiko Matsumoto
MICRON'STUFF
Tadashi Hirosawa
kotringo
Hiroki Maekawa
m.c.A・T
Missile Innovation
★For details, please refer to Avex’s entertainment portal Web site.
Seikyo Kim
Mai
MEGARYU
Daichi Miura
http://avexnet.jp/
07
Avex Domestic Artists
Dan Miyakawa
Alisa Mizuki
Nao Nagasawa
Ataru Nakamura
Ai Okumura
OLIVIA
Rin'
Ryuichi Sakamoto
shuji
Katsunori Takahashi
Haruko Momoi
Masae Nakada
O's
sifow
Kunio Tago
rock-senti
Hiroshi Tamaki
Serina
SOFFet
Shinji Tanimura
My Little Lover
NEVER LAND
Ai Otsuka
Ryohei
Sembello
SLY MONGOOSE
m.o.v.e
Mari Natsuki (GIBIER du MARI)
Ossan
Rinka
schadaraparr
MONKEY MAJIK
PANG
RYO the SKYWALKER
Shibusa Shirazu
Song for Memories
Sutorobo
Tenjochiki
Noria
Rei Mastrogiovanni
Yutaka Sado
Hitomi Shimatani
Ami Suzuki
Akira Terao
08
Avex Domestic Artists
21st Semiannual Business Report
Terry&Francisco
the do-nuts
TOHOSHINKI
Joji Tokoro
Tourbillon
THE LOOSE DOGS
The Phanky OKstra
TOKYO NO.1 SOUL SET
Keisuke Toyama
Tokyo Purin
TRAX
The Strikers
Tokyo 60 WATTS
TRF
TRIPLANE
Tackey & Tsubasa
TOKYO SKA PARADISE ORCHESTRA
AAA
Anna Tsuchiya
Nobuyuki Tsujii
2BACKKA
Takako Uehara
V6
Vanilla Mood
Tomiko Van
Masaya Wada
Wu Ru-jun
Sayaka Yamamoto
Yokai Project
ZAN
★
M
a
n
A
BOO BEE BENZ
Good Dog Happy Men
mihimaru GT
a
r
g
t
nangi
e
i
s
m
e
t
s
plane
n
t
SEAMO
Sentiline
talk talk records
★For details, please refer to Avex’s entertainment portal Web site.
http://avexnet.jp/
09
Avex International Artists
Av ex I n t e r n a t i o n a l A r t i s t s
T h e
F a c e s
Main International Artists/A to Z (As of September 30, 2007)
ALAINE
Fantastic Plastic Machine
Hilary Duff
Misha Williams
sweetbox
Aly & AJ
FATMAN SCOOP
Jesse McCartney
Q;indivi
Swing Out Sister
Ana Johnsson
BORN CRAIN
FERRY CORSTEN
Katie Melua
CLAZZIQUAI PROJECT
RASCAL FLATTS
SIMPLY RED
Tiësto
Dave Rodgers
GEORGE
Genki Rockets
Lim Hyung Joo
Cutie Mommy
L.O.C
GTS
Lumidee
STAIREO
US5
D-SIDE
Hibiki Inamoto
Milry Cyrus as Hannah Montana
SUGARCULT
sugiurumn
Vanessa Hudgens
YOJI BIOMEHANIKA
10
Talents/Athletes/Artists
21st Semiannual Business Report
Av ex Ta l e n t s & A t h l e t e s & A r t i s t s
T h e
F a c e s
The main contract artist (As of September 30, 2007)
★
Ta l e n t
Shidou Nakamura
Koyuki
Yuri Nakamura
Ara
Aki Shibuya
Narumi Konno
Maimi Okuwa
Hironari Amano
Kazuma Yamane
Hiroki Aiba
Hiroya Matsumoto
Miho Sugiura
Mitsuki Ooishi
Miori Takimoto
Tomokazu Yoshida
Erika
Ami Takeishi
Rihoko Shimomiya
Seira Hoshino
Rina Okamoto
Seiya Uehara
Hiroaki Haruguchi
Sairi Itoh
Shion Umezawa
Tohko Miura
Misako Uno (AAA)
Sawa Yamaguchi
Mai Masaki
Yurika Tanaka
Miho Kanazawa
ZOE
Kumi Takeshita
Yumi Itoh
★
Kozo Takeda
(Kickboxing)
Hiroyasu Shimizu
(Speed skating)
★
Athletes
Daisuke Miura
(Professional baseball)
Fumie Suguri
(Figure skating)
Yu Darvish
(Professional baseball)
★For details, please refer to Avex’s entertainment portal Web site.
Artists
Sekijyo Kaneda
(Calligrapher)
http://avexnet.jp/
11
Newcomer
N e w c o m e r
Artists who joined the Avex Group this year
T h e
F a c e s
These artists joined the Avex Group between January and December 2007.
We hope you will offer them the same level of support you offer established Avex artists.
FONK
Demon Kogure
Erina Koyama
LOW IQ 01
UNCHAIN
Ken Matsudaira
01.17 Debut
01.24 move
01.24 Debut
01.31 move
01.31 Debut
02.07 move
the pillows
Seventh Tarz Armstrong
02.07 move
02.07 Debut
100s
02.14 Debut
02.14 move
©AEI/LOVE
Jackson vibe
□□□
D'ERLANGER
BOREDOMS (V∞REDOMS)
LOVE
02.14 move
02.14 move
03.14 move
03.28 move
04.11 Debut
CLUB PRINCE
CLARABELL
Rockamenco
Ari Onishi
KEMURI
05.02 Debut
05.09 Debut
05.09 Debut
05.16 Debut
05.23 move
Nana Tanimura
SHORT LEG SUMMER
Satomi Takasugi
U-DOU & PLATY
you
Remark Spirits
05.30 Debut
06.06 Debut
06.06 Debut
06.13 Debut
06.20 Debut
07.04 Debut
*The dates above are the dates of the first release with Avex.
12
Newcomer
21st Semiannual Business Report
Makoto Saito
tron
Lisa Ono
Rickie-G
Acid Black Cherry
07.04 Debut
07.04 Debut
07.11 move
07.11 Debut
07.18 Debut
5050
Kazuki Kato
Seara Kojo
Shion Miyawaki
MASH
Natural Radio Station
07.25 Debut
07.25 Debut
07.25 Debut
07.25 Debut
08.08 Debut
08.08 Debut
Noriyuki Makihara
Kazuyuki Matsumoto
JONTE
Mother Ninja
moumoon
THE CHILL
twenty4-7
08.15 move
08.15 Debut
08.22 Debut
08.22 Debut
08.22 Debut
08.22 Debut
08.29 Debut
Hatsune Okumura
WRENCH
J-Min
FULLSCRATCH
KAT
Shinji Miyake
09.05 Debut
09.05 move
09.12 Debut
09.12 move
09.12 Debut
09.12 move
Shinichi Osawa (MONDO GROSSO)
JAMOSA
Takuji Aoyagi
Miki Arimura
ASUKA
Soma
09.26 move
10.10 move
11.07 Debut
11.07 Debut
11.14 Debut
11.14 Debut
tomboy
alan
Asako Toki
IKKO
Shin Seung Hun
THE HELLO WORKS
11.14 Debut
11.21 Debut
11.21 move
12.05 Debut
12.05 move
12.05 Debut
★For details, please refer to Avex’s entertainment portal Web site.
http://avexnet.jp/
13
Visual Works
V i sual Wor ks Line Up
T h e
F a c e s
The main visual works
“XX (Ekusu Kurosu)—Makyo Densetsu”
A 90-minute nonstop roller-coaster
thriller starring
actresses Nao
Matsushita and
Ami Suzuki. The
theme song is
sung by Aly & AJ,
a top idol duo
from the United
States. Other major performers include Maju Ozawa, Shoko
Nakagawa and Hiroyuki Ikeuchi. The film is now showing at
Toei theaters nationwide.
“Tsubaki Sanjuro”
“KIDS”
Akira Kurosawa’s
period film, “Tsubaki
Sanjuro,” 45 years
after its initial
release. Sanjuro
Tsubaki is played
by Yuji Oda,
marking his debut
in a leading role in
a period film. For
director Yoshimitsu Morita, this is also his first full-scale period
film. This is a topical winter holiday movie with an outstanding
cast. The film is now showing at Toho theaters nationwide.
“The Nativity Story”
“The Hunting Party” (original title)
This film depicts
the birth of Jesus
Christ from an
original point of
view. How do you
feel about the love
of a husband and
wife who never
forgot to believe in
one another while
they were made a sport of by fortune? The film is now
showing nationwide at Chanter Cine, Theatre Times Square
and other theaters.
Featuring Teppei Koike and
Hiroshi Tamaki, who are
making a spectacular showing
in movies, TV programs and
dramas, and CMs, this movie
is the pair’s first foray as a tag
team in a pure fantasy movie.
The movie beautifully depicts
childhood “friendship, dreams,
hope, and trust” that adults
tend to forget. The film will
premiere on February 2, 2008
at Toei theaters nationwide.
“Tae Wang Sa Shin Gi”
Set in Sarajevo,
the frontline of the
Bosnian conflict,
this film revolves
around a TV
journalist who is
chasing the world’s
most wanted war
criminal. Powerful
performances by
Richard Gere and Terrence Howard, who really shine in this
fact-inspired film. The film is due for release in 2008.
“Confession of Pain”
Why did he have to take
revenge? After coming to
know why—viewers will be
swayed by this shocking
fact. This is a touching
human suspense film
starring Tony Leung and
Takeshi Kaneshiro. The
DVD will be released on
February 29, 2008.
“VEXILLE—2077 Nippon Sakoku”
Ten years after Japan closed the
country to the outside world,
what does female soldier
“Vexille” of the U.S. Special
Forces see there? This is a great
SF action movie directed by
Fumihiko Sori who produced
“APPLESEED.” The DVD of the
film that was shown to the
public in 129 countries will be
released on January 25, 2008.
“Hokuto No Ken DVD-BOX in Commemoration of the
25th Anniversary—TV Series HD Remaster Edition”
“Mokke”
“Mokke,” an original cartoon
drawn by Takatoshi Kumakura
that is serialized to appear every
other month in the monthly comic
magazine, “Afternoon” (published
by Kodansha Ltd.) was made into
animated TV show and is now
enjoying popularity. It depicts
“something important” that
Japanese people tend to forget
through two sisters who live in a
country town. The DVD will be
released on December 21, 2007.
To commemorate the 25th
anniversary of “Hokuto No
Ken,” a DVD-BOX including
all 152 episodes will be
released. With HD remastering,
more clear and real images
have been captured. The
DVD-BOX will be released on
March 28, 2008 with a
bonus DVD.
After an absence of five years, Bae
Yong Joon returns to the screen to
play the leading role in this drama,
which defies conventional South
Korean dramas in terms of having an
unprecedented production cost,
outstanding staff and the use of CG.
Having been a major hit in South
Korea, it is now being aired on NHK/BS
hi-vision and scheduled to start being
aired in April 2008 on NHK/BS2. Its
soundtrack and related DVDs will be
sold sequentially from December 2007.
“Kamen Rider Den-O”
This is aired on the
ANN
Network
at 8:00 a.m. on
Sundays. It is
the newest of
the Kamen Rider
series and enjoys
enormous popularity,
with its unconventional
bright pop feeling.
Not only its theme music, but almost all CD products that were
released in relation to this show, were ranked in the top 10 on
the Oricon Chart, becoming major hits.
“Saint Seiya”
Masami Kurumada’s masterpiece
“Saint Seiya,” which was a big
hit in the 1980s—not only the
original comic version, but also
the TV animation version—will
be released as an Original
Video Animation (OVA) series.
It was also decided to produce
the newest work of the series,
“Meio Hades Elysion Hen,” and
brave figures of the Saints will
appear in 2008.
©2007 XX Production Committee/ ©2007 “Tsubaki Sanjuro” Production Committee/ ©2008 “KIDS” Production Committee/ ©MMVI NEW LINE PRODUCTIONS, INC. All RIGHTS RESERVED./ ©2007 IM Filmproduktions
GmbH All Rights Reserved./ ©TSG Production Company LLC/ ©2006 Media Asia Films (BVI) Ltd. All Rights Reserved./ ©2007 “VEXILLE” Production Committee/ ©2007 Ishimori Productions/TV Asahi
Corporation/ASATSU-DK INC./Toei Co., Ltd./ ©Takatoshi Kumakura/Kodansha Ltd. Publishers/“Mokke” Production Committee/ ©Buronson/Tetsuo Hara/NSP 1983/ ©Toei Animation Co., Ltd. 1987 Copyright License TB308, TC-308/ ©Masami Kurumada/SHUEISHA Inc./Toei Animation Co., ltd.
★For details, please refer to Avex’s visual works portal Web site.
http://avexmovie.jp/
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Topics
21st Semiannual Business Report
PHOTO BY JAMES PORTO
Topics
“BLUE MAN GROUP” is
finally here!
BLUE MAN GROUP, which presents a sophisticated show that combines music,
art and comedy, has staged long-running performance in various countries
throughout the world. BLUE MAN GROUP gives a unique performance that
features unmatched musical instruments, inorganic stage decoration that is
suggestive of an abandoned house, and messages hidden in various places on
the stage, and its artistic quality has been highly evaluated.
The Avex Group has put together Asia’s first “BLUE MAN GROUP”
performance as a project to commemorate the Company’s 20th anniversary.
The show made its debut on December 1, 2007 at a specially constructed
theater in Roppongi, Tokyo. Its popularity has exceeded expectations, with
tickets for performances in December and January sold out. Accordingly, the
show will be extended through April 2008.
We hope you will go along and see for yourself how amazing the BLUE
MAN GROUP actually is.
★For details, please access the “Kinoshita Koumuten presents BLUE MAN
GROUP in TOKYO” official website. http://blueman.jp/
Topics
“mu-mo” has started a
flood of new services!
Our online distribution website, “mu-mo,” whose membership
exceeded one million in less than two years since its launch in
June 2005, has started a flood of new services.
“mu-mo Music Gadget” that started in July 2007 is an
affiliate service in which registered users can sell music that is
traded via “mu-mo Music,” mu-mo’s site for PCs, on their own
websites, using a system called music gadget.
“Uta Box ♪ mu-mo” that started in August 2007 is a flatrate schedule service for cell phones compatible with “Utahodai” sold by NTT DoCoMo, Inc. You can download and enjoy
up to 30 pieces of “Chaku-Uta®” per month, centering on songs
by artists who belong to Avex, at 580 yen per month.
“mu-mo friends,” which is a social networking site (SNS)
that became an official site of three mobile phone carriers and
had its full-scale launch in August 2007, provides functions
linked with the existing mu-mo services such as online
distribution, EC trading, etc., based on Consumer Generated
Media (CGM) like blogs and community sites, which represent
typical SNS content.
In the future, “mu-mo” will continue to aim to create
services in which “artists,” “fans,” and “services” are linked
together to generate synergetic effects.
“mu-mo Music Gadget”
Topics
The Talent Management Division has taken off!
Koyuki and Shidou Nakamura have transferred to Avex!
To further strengthen management of actors, talent and models, the Entertainment Department
that was located within the Visual Content Business Headquarters was reorganized into Talent
Management Division in June 2007.
Utilizing the know-how that we have cultivated in our management of mainly music-related
artists, we will actively foster, acquire, and promote talent.
In July 2007, we concluded a talent management contract with actress Koyuki and in August
2007, we concluded a business collaboration agreement with the Nakamura Shidou Office for the
management of actor Shidou Nakamura’s entertainment activities excluding his Kabuki-related
activities.
Shidou Nakamura plays a leading role in “RED CLIFF,” a movie in which we invested. It will
make its worldwide premiere in 2008.
“mu-mo friends”
Koyuki
* “mu-mo” is a registered trademark of Avex
Marketing Inc.
* “Chaku-Uta®” and “Chaku-Uta Full®” are registered
trademarks of Sony Music Entertainment (Japan), Inc.
Shidou Nakamura as Wa Long in the movie “RED CLIFF”
Shidou Nakamura
15
Topics
Topics
New “Avex Artist Academy” to be opened
in Osaka in April 2008!
Topics
Since opening in Harajuku, Tokyo,
as a training institution for
entertainers in 2001, the Avex
Artist Academy has produced a
large number of vocalists, dancers
and creators and sent them to the
entertainment world. It has been
recently decided that the “Avex
Artist Academy” Osaka School will
be opened as the Academy’s
second school. In the future, we
will open new schools, aiming to
establish a nationwide system to
discover and foster new artists.
★Profile of the “Avex Artist Academy”
Osaka School
●Address:
Shinsaibashi W-Place 6&7F
2-1-25 Nishi Shinsaibashi,
Chuo-ku, Osaka City
●Commencement of acceptance of
entrance applications:
January 2008
(Requests for information materials are
now being accepted.)
★For details, please access the website of the “Avex Artist Academy”
http://aaa.avex.jp/
●Scheduled opening:
April 2008
Topics
We will release
visual content on
the next-generation
disc formats
“Blu-ray Disc™”
and “HD DVD”
As user needs for high-quality picture and sound
content are increasing, the Company has decided
to sell visual software corresponding to the nextgeneration disc formats “Blu-ray Disc™” and “HD
DVD.”
First, we will release Ai Otsuka’s “[LOVE IS
BORN]—4th Anniversary 2007—at Hibiya-Yagai
Ongaku-Do on 9th of September 2007” on January
1, 2008 simultaneously in three different formats,
“Blu-ray Disc™,” “HD DVD,” and “regular DVD.”
This represents the first time a title by a Japanese
artist will be released in the three formats
simultaneously.
Next, on January 9, we will release “AAA 2nd
Anniversary Live—5th ATTACK 070922—at
Nippon Budokan” on “HD DVD” disc. In addition,
we will release the “VEXILLE—2077 Nippon
Sakoku,” a powerful 3D CG animation epic, on
“HD DVD” disc on January 25, 2008.
We will make the most of our capabilities as a
content holder and provide users with a lineup of
attractive and high-quality visual software in the
future.
“avex island” opened in
Second Life®!
We opened “avex island” in Second Life ® in
September 2007.
We will open spaces for our artists
sequentially within “avex island” to create new
places where users can meet our artists.
Among Japanese companies operating in
Second Life ®, we are the first to provide a
Japanese-language explanation concerning
account registration and a Japanese-language
operating manual for beginners.
What is Second Life®?
Second Life ® is a 3D-virtual Internet
space operated by the U.S. Linden Lab.
Users operate characters (avatars) that
express themselves and can enjoy
shopping and other things using virtual
money.
Second Life® is a registered trademark of Linden
Research, Inc.
★To register an account, please access the following website
http://www.meltingdots.net/avexisland/
Topics
Workplace visit website “Avex e iko
(Let’s go to Avex)!” has been opened!
In recent years, as part of “integrated study”
methods, opportunities for junior high and high
school students to visit companies and learn about
the structure of society and various occupations
have expanded.
We have traditionally accepted workplace visit
programs for junior high and high school
students. To further promote these activities in the
future, in September 2007 we opened the “Avex e
iko (Let’s go to Avex)!—Benkyo ga asobi de asobi
ga benkyo—(Studying is playing and playing is
studying),” a dedicated website for junior high and
high school students who want to visit our
workplace. By accessing this site, users can
gain an outline of the visit program and gain
information on how to apply for a workplace visit.
★For details, please access the “Avex e iko” website. http://www.avex.co.jp/avexgo/
16
Company Outline
Company Outline
Company name
Head offic
21st Semiannual Business Report
(As of September 30, 2007)
Board of
directors
Avex Group Holdings Inc.
3-1-30 Minami-Aoyama, Minato-ku, Tokyo 107-8577
Date of establishment
April 11, 1988
Capital
¥4,229.6 million
166 (1,249 employees within the Avex Group)
Number of
employees
Note: Temporary employees are not included in the number of employees.
Company Information
Website
http://www.avex.co.jp/
For more information on Avex Group
Holdings Inc., group companies, press
releases, and financial statements, visit
the above URL.
Masato Matsuura
CEO
Ryuhei Chiba
Co-CEO
Takashi Araki
COO, Senior Executive Director
Toshio Kobayashi
CFO, Senior Managing Director
Shinji Hayashi
CIO, Senior Managing Director
Hiroshi Inagaki
Managing Director
Hisahiko Iida
Managing Director
Hajime Taniguchi
Managing Director
Katsuro Oshita
Managing Director
Hiroyuki Kishi
Managing Director
Tadasu Ohe
Outside Director
Toru Arakawa
Outside Director
Shin Ushijima
Outside Director
Minoru Onozato
Outside Director
Nobuo Kawakami
Outside Director
Shinkichi Iwata
Full-time Auditor
Kenji Nomura
Full-time Auditor
Toshiaki Katsushima Outside Auditor
Yoshiya Takahashi
Entertainment Information
http://avexnet.jp/
For entertainment information, such as
Avex artists and online distribution of
music and visual content, please visit
the above URL.
Operating
officers
Outside Auditor
Kenzo Katakura
Takahiro Miura
Akihiro Terada
Tomoaki Sato
Yuko Suzuki
Masahiro Anan
Avex Group’s organizational chart
Avex Entertainment Inc.
General Shareholders Meeting
Velfarre Entertainment Inc.
Midea Inc.
Meeting of Auditors
Avex Marketing Inc.
Meeting of Board Directors
Para.TV Inc.
Hatch Entertainment inc.
Corporate Executive Committee
Internal Affairs
Avex Live Creative Inc.
Avex Planning & Development Inc.
Representative Director
Avex Management Service Inc.
Avex Asia Holdings Limited
Avex Asia Limited
Corporate Planning Headquarters
Group IT Headquarters
Group Administration Headquarters
Business Planning
Chief Director Office
Planning Implementation
Investors & Public Relations
Computer Systems
General Affairs and Personnel Affairs
International Strategy
IT Administration
Financial & Accounting
Avex Taiwan Inc.
Avex China Co., Ltd.
Avex Hawaii, Inc.
Label Mobile Inc.
Memory-Tech Corporation
El Camino Real Inc.
IP Strategy
avex & East, Inc.
Dwango Co., Ltd.
Chengtian Entertainment Group (International) Holding Company Limited
■Domestic consolidated subsidiaries ■ Consolidated foreign subsidiaries ■ Associated companies
17
Stock Data
Distribution of Shareholding
[Number of shareholders]
Total 35,382
[Number of shareholders by region/Number of shares]
(As of September 30, 2007)
1
0.00%
Domestic financial
institutions
57
0.16%
Domestic securities
companies
31
0.09%
Domestic corporations
194
0.55%
Foreign investors
107
0.30%
34,992
98.90%
3,212,593
6.96%
11,239,708
24.35%
Treasury stock
Japanese individuals
and others
Total 35,382
46,157,810 shares
Overseas 95 0.27%
6,864,315 shares 14.87%
Total 46,157,810 shares
Domestic financial
institutions
Domestic securities
companies
817,729
1.77%
Domestic corporations
4,103,408
8.89%
Foreign investors
6,877,940
14.90%
19,906,432
43.13%
Japanese individuals
and others
Top Ten Shareholders
1,330 3.76%
453,820 shares 0.98%
Kanto
region
1,436 4.06%
554,652 shares 1.20%
Chubu
region
Kinki
region
Chugoku
region
18,760 53.02%
33,386,117 shares 72.33%
Shikoku
region
Kyushu
region
6,661 18.83%
2,420,280 shares 5.24%
772 2.18%
292,898 shares 0.63%
5,105 14.43%
1,788,388 shares 3.87%
Number of Shareholders
(As of September 30, 2007)
Number of shares
March 2005
The Master Trust Bank of Japan, Ltd. (Trust account)
2,952,800 shares
September 2005
Masato Matsuura
2,240,124 shares
March 2006
Toshio Kobayashi
2,240,118 shares
September 2006
Credit Suisse Euro PB Client SFPVL
1,516,000 shares
March 2007
Designated independent money trust, Mitsui Asset Trust and Banking Co., Ltd.,
Trust Account 1
1,502,500 shares
Japan Trustee Services Bank, Ltd. (Trust account)
1,403,200 shares
MAX 2000 INC.
1,150,000 shares
T’S CAPITAL INC.
1,150,000 shares
Trust & Custody Services Bank, Ltd. (Securities investment trust account)
1,104,300 shares
Shareholder’s name
Tohoku
region
812 2.29%
268,818 shares 0.58%
[Number of shares]
Treasury stock
Hokkaido
region
411 1.16%
128,522 shares 0.28%
Caceis Bank Ordinary Account
25,677
20,739
26,233
25,593
33,810
September 2007
35,382
Share Information
(As of September 30, 2007)
Authorized number of shares
184,631,000 shares
Number of shares outstanding
46,157,810 shares
989,500 shares
One unit of shares
Notes:
● In addition to the above table, there are 3,212,593 treasury shares (6.96%) owned by the Company.
Note: The Company owns 3,212,593 treasury shares, and the number of
outstanding shares (excluding treasury shares) is 42,945,217.
● CEO Masato Matsuura and Senior Managing Director Toshio Kobayashi serve as representative directors of MAX 2000
INC. and T’S CAPITAL INC., respectively.
Stock Price/Trading Volume
100 shares
(from April 6, 2007 to November 9, 2007)
Trading volume (Thousands of shares)
Share price (Yen)
2,000
8,000
7,000
6,000
5,000
1,500
4,000
3,000
2,000
1,000
1,000
0
2007
Apr.
2007
May
2007
Jun.
2007
Jul.
2007
Aug.
2007
Sep.
2007
Oct.
2007
Nov.
2007
Apr.
2007
May
2007
Jun.
2007
Jul.
2007
Aug.
2007
Sep.
2007
Oct.
2007
Nov.
18
Stockholder Memo & Important Information
21st Semiannual Business Report
Information
*01
Memo for Shareholders
● Accounting
year
April 1 to March 31 of the following year
● Date
March 31
● Date
September 30
for determining shareholders eligible
for year-end dividend receipt
for determining shareholders eligible
for interim dividend receipt
● Regular
● Holder
general shareholders meeting
of shareholders’ registry
June of each year
Mitsubishi UFJ Trust and Banking Corp.
● Contact
Corporate Agency, Mitsubishi UFJ Trust and
Banking Corp.
7-10-11 Higashisuna, Koto-ku, Tokyo 137-8081
TEL: 0120-232-711 (toll free)
● Share
transfer agents
Branches of Mitsubishi UFJ Trust and Banking Corp.
● Stock
exchange where Avex stock is listed
First Section of Tokyo Stock Exchange
(Security code No.7860)
● Media
where shareholder information is posted
Via on-line notification
URL where shareholder information is posted
http://www.avex.co.jp/
(Shareholder information is posted in the Nihon Keizai Shimbun newspaper
in the event of accidents or other unavoidable incidents that make on-line
notification impossible.)
Information
*02
Information
●For
request of forms concerning shares
Please contact the managing agent of the shareholders registry via telephone or the Internet (24 hours a
day) to request a form to complete stock-related procedures, such as notifying a change of registered
address, seal and name, instructing a dividend transfer, requesting purchase of odd-lot shares, or
requesting a transfer of share ownership.
0120-244-479 (Corporate Agency Division, Mitsubishi UFJ Trust and Banking Corp.)
0120-684-479 (Osaka Corporate Agency Division, Mitsubishi UFJ Trust and Banking Corp.)
http://www.tr.mufg.jp/daikou/ (Internet address)
If you use the central securities custody and book-entry transfer system (JASDEC), please contact the
securities company with which you have an account.
●How
to receive dividends
Shareholders who have not designated a transfer account have traditionally received dividend payment
via a “Mail Transfer Payment Notice.” Following the privatization of Japan Post on October 1, 2007, such
shareholders will now receive dividend payment via “Dividend Receipt” instead of the “Mail Transfer
Payment Notice.” (As before, you can receive dividends at the savings counter of the nearest Japan Post
Bank office or post office.)
ART DIRECTOR & DESIGNER Masaki Maekawa Design Office EDITOR Avex Planning & Development Inc. PRINTING DIRECTOR TAKARA PRINTING CO.,LTD.
©Avex Group Holdings Inc.
Avex Group Holdings Inc.
Avex Group Holdings Inc.
Avex bldg.,
Stock Affairs Section,
Group Administration Headquarters
Avex Group Holdings Inc.
70