In launching Hakuhodo DY partners, the new
holding company that incorporates three of Japan's largest agencies (Hakuhodo
(#2), Daiko (# 5), and Yomiko (#6), the new company's president, Toshio
Miyagawa, made it clear that he was throwing down the gauntlet at Dentsu.
" . . . this project is not about being Number 2 to Dentsu," he
told a news conference as the new company was launched on October 1st.
Based on 2002 billings, HDY commands a market share of 17% to Dentsu's
24% and Miyagi plans to grow this aggressively.
Consolidated billings are expected to reach 1.1 trillion yen in fiscal
2005 (April 04/March 05), up 12% from the combined figure for the three
agencies in 2002.
In December, HDY will launch Hakuhodo DY Media Partners. The media departments
of all three agencies will be transferred to this and integrated into
a single team that will handle buying, planning, content development,
sponsorship, and research. Inevitably there will be job losses, "We
will be streamlining the overall organization,"says Miyagi," and
we will be introducing early retirement programs to encourage people
to leave." Under both Japanese law and the lifetime employment system
operated by major companies, involuntary redundancies are not permitted
in Japan. Miyagi gave no figures for how many of the group's 5,000 employees
he would like to depart.
The media company will play a leading role in the discussions about
agency remuneration and transparency that are currently under way in
Japan. According to officials, Hakuhodo DY Media Partners "…offer
transparency to Western clients who seek it and help form a consensus
for change among Japanese advertisers, media, and other Japanese agencies."
The new company has no plans to form a partnership with any of the major
Western holding companies or agencies and will, instead build its own
network with the help of funds from an IPO that could take place as early
as Autumn 2004, if market conditions allow. Existing affiliations of
the three member agencies will continue unchanged: Hakuhodo has relationships
with Lowe and TBWA, Daiko with Lowe, and Yomiko with Bates.
HDY's quick path to growth would be to invite other agencies to join
the group. Miyagawa says, "This question is often raised about Asatsu," if
they joined, HDY's market share would rise to 23%, just a notch lower
than Dentsu's. Miyagawa says that " no agency has been excluded
from HDY," but neither have any approaches been made to others nor
overtures received from them.
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Background: Hakuhodo DY Holdings Press Release at launch . . .
Hakuhodo DY Holdings Begins Operations
Tokyo October 1, 2003 The holding company Hakuhodo DY Holdings Inc.
begins operations today, following the transfer of shares from Hakuhodo
Inc., Daiko Advertising Inc., and Yomiko Advertising Inc.
The establishment of the holding company is in line with the share transfer
agreement that Hakuhodo, Daiko and Yomiko adopted at the meeting of their
boards of directors on August 5, and that was subsequently endorsed by
the shareholders at the extraordinary general meetings held separately
by the three agencies on August 26.
The three advertising agencies, Hakuhodo Inc., Daiko Advertising Inc.,
and Yomiko Advertising Inc. now become fully owned subsidiaries of Hakuhodo
DY Holdings Inc., yet will continue to compete with one another, drawing
on the cultures and strengths that each has build over the years to provide
precisely tailored solutions to their client needs.
As announced previously, the three agencies will spin off their media
arms into Hakuhodo DY Media Partners, a new multidiscipline media agency
that will be established on December 1 of this year to provide clients
with enhanced solutions and services.
The formation of this new advertising group is unprecedented and will
pioneer a new framework for the advertising industry in Japan, and this
will provide the clients, the media, the consumers, and the society with
even greater creativity and diversified added value.
At the outset of this bold initiative, it is our pleasure to announce
the group’s corporate philosophy. Each of the group companies will
apply themselves to the twin tasks of providing the ultimate solutions,
and maximizing the corporate value of the group as a whole.
Group corporate philosophy
1. Strive continuously to provide advertisers the optimal services to
add value to their business.
2. Embrace changes in media and play an instrumental role in building
media value.
3. Build a dynamic global network to enhance services.
4. Create abundance in the next generation and work to further the society,
with our unique insight into seikatsusha – people who have lives
beyond what they consume.
5. Create value by drawing on individual dynamism and a solid team ethic,
while upholding freedom and self-discipline.
6. Take on the world by constantly seeking out new challenges in the
spirit of competition and harmony.
7. Work ceaselessly to increase corporate value and meet the trust and
the expectations of the shareholders.
Overview of Hakuhodo DY Holdings Inc.
Company name: Hakuhodo DY Holdings Inc.
Business content: As the holding company, maximize group’s corporate
value, in other words the shareholder value, by establishing and implementing
corporate strategy, and financial and group governance policies.
Location: Shiodome City Center5-2, Higashi Shinbashi 1-chomeMinato-ku,
TokyoNote: From Oct. 1?Nov. 25 the office will be located at:Granpark
Tower, 4-1, Shibaura 3-chome, Minato-ku, Tokyo
Management: Takashi Shoji, Chairman & Representative DirectorToshio
Miyagawa, President & Representative Director
Capital: \10 billion
No. of shares issued: 38,855,810
Fiscal year: 12 months to March 31
Original Announcement made on August 5th 2003 For Immediate Release
Hakuhodo Inc.
Daiko Advertising Inc.
Yomiko Advertising Inc.
Hakuhodo, Daiko and Yomiko announce corporate profile of Hakuhodo DY Holdings and Hakuhodo DY Media Partners
Tokyo, August 5, 2003 -- Hakuhodo Inc., Daiko Advertising Inc., and
Yomiko Advertising Inc. announced today that the decisions had been made
on the share transfer ratio pertaining to their business integration,
and also planned establishment dates, head office locations, representatives,
capital, and other details of Hakuhodo DY Holdings Inc. and Hakuhodo
DY Media Partners Inc. respectively. As announced previously, Hakuhodo
DY Holdings will be established as a holding company, and Hakuhodo DY
Media Partners will be its fully owned subsidiary.
The following details are still tentative and subject to approval by
the respective boards of directors and meetings of shareholders. They
will take effect on the date of establishment of the respective companies.
1. Share transfer ratio
Share transfer ratio indicated below was agreed by the three companies
through discussion with reference to the calculation made by a third
party auditing firm. (Net asset evaluation on adjusted book value and
Discounted Cash Flow calculation.)
Hakuhodo Daiko Yomiko
Share transfer ratio 1.000 0.341 0.276
2. Agreement on Hakuhodo DY Holdings Inc.
1) Date of establishment
October 1st, 2003
2) Head office location
Shiodome City Center, 1-5-2 Higashi-Shimbashi, Minato-ku, Tokyo
3) Appointments of senior executives
<
Members of the Board>Chairman and Representative Director(announced on April
7) Takashi Shoji(Current Chairman and Representative Director, Hakuhodo)
Vice Chairman(announced on April 7) Takeshi Adachi(Current Chairman and Representative
Director, Daiko)
Vice Chairman(announced on April 7) Makoto Toriyama(Current Chairman, Yomiko)
President and Representative Director(announced on April 7) Toshio Miyagawa(Current
President and CEO, Hakuhodo)
Managing Director Nobuo Hoshina(Current Corporate Senior Officer, Hakuhodo)
Managing Director Hirokazu Toda(Current Corporate Senior Officer, Hakuhodo)
Director Toshinobu Miyamoto(Current Operating Director, Daiko)
Director Takao Sato(Current Director and Senior Operation Executive, Yomiko)
Director Misaki Kakikawa(Current Corporate Officer, Hakuhodo)
Non-executive Director Hideki Nakao(Current President and Representative Director,
Daiko)
Non-executive Director Katsuhiko Koike(Current President and Representative
Director, Yomiko)
Non-executive Director Takashi Sato(Current Corporate Senior Executive Officer,
Hakuhodo)
Non-executive Director Junji Narita(Current Corporate Senior Executive Officer,
Hakuhodo)
Non-executive Director Tomokazu Jimbo(Current Corporate Executive Officer,
Hakuhodo)
<
Statutory Auditors>Full time Statutory Auditor Yutaka Hata(Current General
Manager of Internal Auditing Division, Hakuhodo)
Statutory Auditor Takao Nishimura
Statutory Auditor Takeshi Abe
Statutory Auditor Hironari Kitahara
Statutory Auditor Motohiko Aiba
Note: All appointments are still tentative and will take effect on the date
of establishment of Hakuhodo DY Holdings with completion of the approval process.
4) Method of establishment
As stated in the previous announcement, Hakuhodo DY Holdings Inc. will
be established by transferring existing shares from Hakuhodo, Daiko, and
Yomiko.
5) Capital
Capital of Hakuhodo DY Holdings Inc. is 10 billion yen.
6) Functions and organization scheme
The function of Hakuhodo DY Holdings Inc., as the group head office, is to
aim
for maximization of share holder and group company value through the
pursuit of group synergy 1) through mid-to-long term strategy planning and
implementation, 2) by support and coordination in management of the group
companies, and 3) by establishment and execution of corporate governance.
The company will have a streamlined organizational structure composed of
back office support divisions such as Corporate Public Relations Division,
General Affairs Division, IPO Project Division, Accounting & Finance Division,
Human Resources Management Division, and Corporate Strategy Division.
<Organization chart>
7) Human resources
Hakuhodo DY Holdings will initially consist of employees seconded from
Hakuhodo, Daiko, and Yomiko. Number of employees will be approximately 70.
8) Company logo (Please see the attachment)
Design concept
With consideration given to the role of the holding company to integrate
operations of the four individual operating companies with distinctive
characteristics, a logo design was applied as opposed to a symbolic mark.
English characters of the basic Roman font are used to represent credible and
universal nature of the company. Deep blue was selected as a corporate color
to
symbolize faithfulness toward stakeholders of the company which will aim to
go public.
3. Agreement on Hakuhodo DY Media Partners Inc.
1) Date of establishment
December 1st, 2003
2) Location of head office and Kansai office
Head office: Shiodome City Center, 1-5-2 Higashi-Shimbashi, Minato-ku,
Tokyo
Kansai office: Nakanoshima Mitsui Building, 3-3-3 Nakanoshima, Kita-ku,
Osaka
3) Appointments of senior executives
<Members of the Board>
President and Representative Director(Announced on April 7) Takashi Sato(Current
Corporate Senior Executive Officer, Hakuhodo.)
Managing Director Kazuo Shimamura(Current Senior Managing Director and Chief
Operation Executive, Yomiko)
Managing Director Yoshinobu Haba(Current Corporate Executive Officer, Hakuhodo)
Managing Director Hiyoshi Ando(Current Managing Director and Operating Director,
Daiko)
Director Toru Aizawa(Current Corporate Officer, Hakuhodo)
Director Takao Kubo(Current Operating Director, Daiko)
Director Haruo Oki(Current Corporate Officer, Hakuhodo)
Director Kazuyoshi Yoshikawa(Current Corporate Officer, Hakuhodo)
Director Hisao Omori(Current Corporate Officer, Hakuhodo)
<
Statutory Auditors>Full time Statutory Auditor Takashi Mori(Current General
Manager of Radio Division, Hakuhodo)
Statutory Auditor Atsushi Yoshioka
Statutory Auditor Akira Fujishima
Statutory Auditor Motohiko Aiba
Note: All appointments are still tentative and will take effect on the date
of establishment of Hakuhodo DY Media Partners with completion of the approval
process.
4) Method of establishment
Hakuhodo DY Media Partners will be established by means of corporate
separation from the three existing companies.
5) Capital
Capital of Hakuhodo DY Media Partners Inc. is 1 billion yen.
6) Functions and organization scheme
Hakuhodo DY Media Partners will be organized to function in the following
fields:
a) Producing
To offer and promote sales of appropriate ad space and contents in a way to
meet needs of both clients and media.
b) Media buying
To procure and buy ad space and contents, and coordinate to optimize their
combination.
c) Business opportunities expansion
To develop systems and methods, and tools for planning and developing
services to offer the following;
* Media planning and development of planning tool to maximize efficiency
and effect of advertisement
* Development of database, data collection and analysis tool to
support sales and enhance value of ad space and contents
* Research to respond to new business styles in the evolving media market
* Planning and development of methods and tools to enhance media
advertising value
d) Operations
Functions such as media trafficking (to control and ensure material
submission to media,) confirmation of ad exposure, control of EDI
transactions and digital data transmission
e) Content development
To develop contents and business to realize synergy effect with media,
including entertainment business – such as sports, culture events and
movies
and performances – and all related rights business.
f) Planning and management
Business planning, sales planning, operating management and support, and
administrations (i.e. human resources, general affairs, public relations, legal,
finance and accounting)
<Organization Chart>
7) Human resources
In accordance with the Law Regarding Succession of Employment Contract,
employees engaged in media business at Hakuhodo, Daiko, and Yomiko at the
time of the establishment in December will be transferred to Hakuhodo DY
Media Partners. Number of employees will be approximately 600.
8) Company logo (Please see the attachment)
Design concept
The logo represents the scale of the new media company and its progressive
posture to make the media environment more open. Three spindles of the logo
is
an extreme deformation of M from Hakuhodo DY Media Partners. At the same
time it symbolizes the three brand agencies - Hakuhodo, Daiko, and Yomiko -
and also media companies, clients, and sei-katsu-sha. Green color of the logo
means “innovation” and “openness.”
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