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Latest Performance

Consolidated Financial Results for the Three Months Ended June 30, 2022 (April 1, 2022 to June 30, 2022)

Consolidated operating results (Percentage figures denote YoY changes)

(Unit: Millions of yen) Three Months Ended June 30, 2021 Three Months Ended June 30, 2022 YoY Change (%)
Net sales 22,930 8,243 (64.1)
Operating profit 378 186 (50.7)
Ordinary profit 559 291 (47.9)
Profit attributable to owners of parent 338 (209) -

Consolidated balance sheets (summary)

(Unit: Millions of yen) Fiscal year ended March 31, 2022
(as of March 31, 2022)
Q1 of fiscal year ending March 31, 2023
(as of June 30, 2022)
Increase /
Decrease
Assets
Total current assets 56,698 42,900 (13,797)
Total non-current assets 13,303 13,999 696
Total assets 70,001 56,899 (13,101)
Liabilities
Total current liabilities 27,864 16,044 (11,819)
Total non-current liabilities 10,584 9,671 (913)
Total liabilities 38,449 25,715 (12,733)
Net assets
Total net assets 31,551 31,184 (367)
Total liabilities and net assets 70,001 56,899 (13,101)


Consolidated statement of cash flows (summary)

(Unit: Millions of yen) Three Months Ended June 30, 2021 Three Months Ended June 30, 2022 Increase /
Decrease
Cash flows from operating activities (443) (4,759) (4,315)
Cash flows from investing activities (679) (974) (294)
Cash flows from financing activities (1,368) (1,891) (522)
Effect of exchange rate change on cash and cash equivalents 0 0 0
Net increase (decrease) in cash and cash equivalents (2,491) (7,624) (5,133)
Cash and cash equivalents at beginning of period 24,510 32,304 7,793
Increase in cash and cash equivalents resulting from inclusion of subsidiaries in consolidation 14 - (14)
Cash and cash equivalents at end of period 22,033 24,679 2,646

1. Qualitative information on the quarterly financial results

(1) Analysis of operating results

The energy crisis, the food crisis, soaring prices, and other unforeseen circumstances triggered by the situation in Ukraine, have created new social tensions. On the other hand, COVID-19 pandemic, now in its third year, has continued to expand quantitatively by replacing conventional Omicron variant. However, as society takes a “living with Covid” approach, the impact on the socio-economy has been minimized, and while there is no denying that the situation will fluctuate, the normalization of economic activities is proceeding steadily along with the restoration of inherent daily life.
Even in this challenging environment, people always need leisure time to enrich their own lives, and the pandemic has created a variety of new ways of leisure with creativity in response to the new phenomena that have emerged, such as “staycations.” We learned a lot from the courage of people who need leisure no matter what hardships or difficulties they face, and who are positive about their creation.
Under these circumstances, our corporate philosophy of “The Greatest Leisure for All People” has been steadily developing our business, centered on Tsuburaya Productions Co., Ltd. (hereinafter, “TPC”) and FIELDS CORPORATION.

Content and digital business: domestic market
The movie SHIN ULTRAMAN, released in May 2022 in Japan, has already been a big hit with more than ¥4.3 billion in box office revenues, and it has been a pleasure to blow out a temporary “movie recession” caused by the pandemic and other events. As a result, we were able to acquire new fans across a broad range of segments, which will be irreplaceable for our next development. We have reaffirmed that the existence of Ultraman is becoming more and more popular and loved not only by Japanese fans but also by many fans worldwide, and that it is increasingly raising the value of the brand. This is a strong intention for our group, which is dedicated to growing the Ultraman-related business in the future.

Content and digital business: overseas markets
In China, Ultraman Area, in a Chinese government-authorized entertainment facility, opened in Shanghai, has been hugely popular, and each event has attracted so many customers that the venue is packed beyond capacity. This momentum has expanded to include sales of card games, figures, and other related merchandise business revenues in the Chinese market which grew rapidly and dynamically from approximately ¥200 million in the same period of the previous fiscal year to approximately ¥740 million in excess of three times as high as in the same period of the previous fiscal year.
Going forward, we are implementing a variety of measures to ensure that Ultraman is becoming popular not only in China but also in other Asian countries.

Pachinko/pachislot (hereinafter, “PS”) business
In the pachinko market, with the removal of all old regulation machines from the market at the end of January 2022, we have entered a new stage of providing a stable and sustainable lineup of high-quality titles, both hardware and software, that can be enjoyed by users at a reasonable cost of consumption. Starting with the Evangelion series of pachinko machines launched last year, and driven by popular pachinko machine in the previous fiscal year, we were able to meet the expectations of fans. As a result, the operation of pachinko halls improved significantly, rising 6.1% YoY. On the other hand, in pachislot, PACHISLOT INUYASHA, which we began delivering in the Q1 of this fiscal year, was positively acknowledged as appropriate for the beginning of the new pachislot era. As a result, pachinko halls’ desire to invest in pachislot machines, which has been stagnant since the appearance of regulation 6.0 machines in 2018, has shifted to a positive orientation, and the trend has turned upward for the first time in about four years. We will continue to strive to provide merchandise services that meet the needs of pachinko halls and fans without missing this opportunity.

As a result of these business activities, the consolidated results for the Q1 of the fiscal year under review were net sales ¥8,243 million (down 64.1% YoY), operating profit ¥186 million (down 50.7%), ordinary profit ¥291 million (down 47.9%), and a loss attributable to owners of parent of ¥209 million (profit attributable to owners of parent of ¥338 million for the same period of the previous fiscal year). Against the backdrop of robust sales forecasts for the contents and digital business, and the strategic PS business, the Company is making steady progress toward its initial forecasts.


Operating results by business segment for the Q1 of the fiscal year under review are as follows.

Content and digital business segment
As shown in Table 1 below, the business revenue of TPC, which forms the core of the content and digital segment, grew significantly YoY.

[Table 1:Trends in business revenues of TPC]

短信表

Both domestic MD and license revenue and the imaging business performed well, reflecting the big hit of the movie SHIN ULTRAMAN released in Japan. Overseas, sales of figures, other toys and card games continued to grow against backdrop of expanding licensees in China.
Digital Frontier Inc. (hereinafter, “DF”) posted net sales of ¥1,074 million (up 24.1% YoY) and operating profit of ¥107 million (up 290.7% YoY), supported by continued firm sales of CG video production led by major domestic gaming companies and VFX video production with Netflix.

As a result of the above, the contents and digital segment’s Q1 results grew significantly, with net sales at ¥2,911 million (up 71.3% YoY) and operating profit at ¥1,038 million (up 331.0% YoY).

PS business segment
In Q1, we sold PACHISLOT INUYASHA, which was highly anticipated by halls and fans. The planned number of 15,000 units (approximately 6,000 units recorded in the Q1) was largely in line with the plan. In addition, planned unit sales of three titles for pachinko and one title for pachislot to be delivered in Q2 have also been completed.
In business domains other than new machine sales, operating revenues grew steadily to ¥541 million (up 72.5% YoY), reflecting the growing need for measures to attract customers, such as web-based advertising accompanying the improvement in hall operations.
As a result of the above, unit sales in PS business segment for the Q1 of the fiscal year under review were 11,000 units, which was generally in line with the plan. The results for the Q1 were net sales of ¥4,858 million (down 76.6% YoY) and an operating loss of ¥860 million (operating profit of ¥104 million for the same period of the previous fiscal year).
Quarterly sales of PS for the fiscal year ending March 31, 2023 are shown in Table 2 below.

[Table 2: PS quarterly sales titles for the year ending March 31, 2023]

短信表

In PS business, we are planning to sell seven pachinko titles and seven pachislot titles in the fiscal year ending March 2023, and we plan to deliver three pachinko titles and two pachislot titles in the H1 of the fiscal year.

Other
The performance of other group companies progressed steadily in general.

(2) Consolidated earnings forecasts

As described below, each of our group’s business segments is making steady progress in accordance with the Company’s initial plan, and the forecast for the fiscal year ending March 31, 2023 remains unchanged from the content announced on May 10, 2022.

Content and digital business segment
Full-year forecasts for TPC are as follows.
The domestic MD and license business is expected to continue contributing to merchandising and other activities through the ripple effect of the movie SHIN ULTRAMAN from the Q2 onward. The impact of this title, which has been seen by about three million people, is expected to extend to the entire Ultraman brand. We also expect steady progress in sales of merchandise related to the latest TV series Ultraman Decker aimed at acquiring a children and family fanbase, and in other conventional measures, such as various events.
In the Chinese market, we anticipate continued growth in the Q2 and beyond, based on the success of our long-standing efforts to increase the value and awareness of Ultraman brand. The Ultraman Area within government-certified facility, the SHANGHAI HAICHANG OCEAN PARK, which was pre-opened in July this year, is under consideration, and we will continue working to expand touch points to Ultraman brand. The impact of the worried lock-down in Shanghai is only temporary, and related merchandise business for China is expected to continue to grow further.
In the North American market, we will continue to conduct market research and prepare for the development of this business in light of the favorable response in Anime Expo 2022.
DF continues to make steady progress due to orders utilizing its CG and VFX video production technologies, and will actively promote initiatives for new business domains such as metaverse as well as the video field.

PS business segment
In PS business, all of the three pachinko titles and one pachislot title scheduled to be delivered in the Q2 have been sold out after receiving orders in excess of the planned number of units, and we are already working with allied manufacturers to respond to additional orders in the Q3.
In the H2 of the fiscal year, we are planning four titles for pachinko and five titles for pachislot. Sales of all of these products are steady, including the passing of inspections, procuring parts and materials, and preparing for manufacturing. In conjunction with the significant upward trend in customer attraction in pachinko hall, sales are expected to exceed forecasts for the planned number of units.

(Note 1) All figures in this report are based on our estimates.
(Note 2) Merchandise names in this report are trademarks or registered trademarks of each company.
(Note 3) The results of Contents and digital and PS businesses are calculated by considering the elimination of intra-group transactions from the simple sum of the figures within the respective businesses.

(3) Overview of financial position

  1. Assets
    Current assets decreased by ¥13,797 million from the end of the previous fiscal year to ¥42,900 million. This was mainly due to a decrease in cash and deposits and a decrease in trade receivables.
    Property, plant and equipment decreased by ¥0 million from the end of the previous fiscal year to ¥4,538 million.
    Intangible assets decreased by ¥65 million from the end of the previous fiscal year to ¥2,417 million. This was mainly due to a decrease in goodwill.
    Investments and other assets increased by ¥762 million from the end of the previous fiscal year to ¥7,044 million. This was mainly due to an increase in investments in capital and investment securities.
    Consequently, assets decreased by ¥13,101 million from the end of the previous fiscal year to ¥56,899 million.

  2. Liabilities
    Current liabilities decreased by ¥11,819 million from the end of the previous fiscal year to ¥16,044 million. This was mainly due to a decrease in trade payables.
    Non-current liabilities decreased by ¥913 million from the end of the previous fiscal year to ¥9,671 million. This was mainly due to a decrease in long-term borrowings.
    Consequently, liabilities decreased by ¥12,733 million from the end of the previous fiscal year to ¥ 25,715 million.

  3. Net assets
    Net assets decreased by ¥367 million from the end of the previous fiscal year to ¥31,184 million. This was mainly due to a decrease in retained earnings.

  4. Analysis of cash flows
    Cash and cash equivalents (hereinafter referred to as “cash”) at the end of Q1 of the fiscal year under review decreased by ¥7,624 million from the end of the previous fiscal year to ¥24,679 million.

  5. Cash flows from operating activities
    Net cash used in operating activities was ¥4,759 million (¥443 million used in the same period of the previous fiscal year). This was mainly attributable to profit before income taxes of ¥285 million, a decrease in trade payables of ¥10,128 million, a decrease in trade receivables of ¥7,150 million, an increase in inventories of ¥1,334 million and income taxes payments of ¥544 million.

  6. Cash flows from investing activities
    Net cash used in investing activities was ¥974 million (¥679 million used in the same period of the previous fiscal year). This was mainly due to payments for investments in capital of ¥528 million and purchase of non-current assets of ¥223 million, and purchase of investment securities of ¥200 million.

  7. Cash flows from financing activities
    Net cash used in financing activities was ¥1,891 million (¥1,368 million used in the same period of the previous fiscal year). This was mainly due to repayments of long-term borrowings of ¥1,257 million and dividends paid of ¥622 million.