TOHOKUSHINSHA FILM CORPORATION

Business Details

This segment's core businesses are TV commercial production and sales promotion, undertaken by the Company along with Nibankobo Co., Ltd., Soda Communications Inc., ENJIN Co., Ltd., Double TFC Inc., Moversal Inc., Hakuhodo Cabin, Inc., and others. Orders in the commercial production division have remained strong, supported by continued proactive order-taking activities and the promotion of human resource development, with large orders for comprehensive exhibitions also contributing. This segment is the core segment, accounting for approximately 66% of the Group's net sales to external customers, and profitability improvement measures are being pursued under an order-based business model.

Recent Overview

Driven by TV commercial production and large-scale exhibition projects, net sales rose 10.3% and operating income surged 34.9% year on year

In FY2026 (ending March 2026), the Advertising Production segment achieved net sales of ¥31,719 million (up 10.3% year on year) and operating income of ¥4,063 million (up 34.9% year on year). In addition to continued proactive order-taking activities and human resource development promotion in the commercial production division, orders for large-scale comprehensive exhibition projects contributed to increased revenue. In addition to the revenue increase effect, profitability improvement measures were successful, improving the segment margin from 10.5% in the prior period to 12.8%. Note that a cyberattack occurred at consolidated subsidiary Omnibus Japan Inc. in December 2025, but the impact on results for the current fiscal year was limited (recorded in the Content Production segment).

Key Products

Growth Drivers

• Expansion of orders through continued proactive order-taking activities and human resource development promotion in the commercial production division
• Securing orders for comprehensive exhibitions and large spot projects
• Improved profitability through profit margin improvement measures and planned execution of selling, general and administrative expenses
• Concentration of management resources on the core segment as Group-wide structural reforms progress

Risks

• Changes in the business environment due to the shrinking mass promotion market centered on TV commercials and the shift toward digital advertising
• Risk of revenue concentration on major clients (Dentsu and Hakuhodo)
• Ongoing risk from decreased orders and recovery costs resulting from the ransomware attack on consolidated subsidiary Omnibus Japan Inc.
• Impact on production capacity from personnel reductions due to the voluntary early retirement program (special retirement benefits of ¥603 million recorded in the current period)
• Reduced financial flexibility due to the decrease in cash and cash equivalents (period-end balance of ¥50,742 million) resulting from the acquisition of graniph Co., Ltd. (acquisition cost of ¥17,763 million)