Investors

Latest Performance

Consolidated business results for the year ended March 31, 2019 (April 1, 2018 to March 31, 2019)

Consolidated operating results (Percentage figures denote YoY changes)

(Unit: Millions of yen) Year ended March 31, 2018 Year ended March 31, 2019 YoY Change %
Net sales 61,055 51,639 (15.4)
Operating profit (5,738) (1,363) -
Ordinary profit (5,204) (1,396) -
Profit attributable to owners of parent (7,691) (298) -

Consolidated balance sheets (summary)

(Unit: Millions of yen) Year ended March 31, 2018 Year ended March 31, 2019 Increase /
Decrease
Assets
Total current assets 42,175 48,225 6,049
Total non-current assets 30,160 19,971 (10,189)
Total assets 72,336 68,196 (4,139)
Liabilities
Total current liabilities 22,480 21,754 (726)
Total non-current liabilities 14,346 11,337 (3,009)
Total liabilities 36,827 33,091 (3,735)
Net assets
Total net assets 35,509 35,105 (403)
Total liabilities and net assets 72,336 68,196 (4,139)

Consolidated statement of cash flows (summary)

(Unit: Millions of yen) Year ended March 31, 2018 Year ended March 31, 2019 Increase /
Decrease
Cash flows from operating activities (1,094) 2,178 3,273
Cash flows from investing activities 4,399 3,217 (1,181)
Cash flows from financing activities (2,021) (962) 1,059
Effect of exchange rate change on cash and cash equivalents (0) 0 0
Net increase (decrease) in cash and cash equivalents 1,282 4,434 3,151
Cash and cash equivalents at beginning of period 23,090 24,373 1,282
Cash and cash equivalents at end of period 24,373 28,807 4,434


1.Overview of operating results

(1) Operating results for the year ended March 31, 2019

i.) Overview of consolidated business results

During the fiscal year ended March 31, 2019, the FIELDS CORPORATION Group substantially changed direction by promoting large-scale management reforms through a management structure centered on its four core companies. Accordingly, we strictly enforced a variety of policies aimed at increasing management efficiency in order to optimize management costs.

In the pachinko and pachislot (hereinafter, “PS”) business, the nucleus of which is formed by FIELDS CORPORATION, we returned to our original role as a distributor and focused on further expanding our distribution base through the enhancement of our marketing functions, which are one of its major strengths. Efforts aimed at achieving this expansion included, of course, concentration on sales of new machines and the launching of new businesses capable of responding to diverse customer needs.
In the PS market environment during the fiscal year under review, the Amendment of the Regulation for Enforcement of the Amusement Businesses Law* went into effect on February 1, 2018. Under this market environment, manufacturers actively developed and launched PS machines that were compliant with new regulations (hereinafter, “new-regulation machines”). New-regulation pachinko machines were launched in August, followed by new-regulation pachislot machines in October. These machines, which have been well-received by both pachinko halls and PS fans alike, feature varied game functions and can be enjoyed with peace of mind while limiting spending to an appropriate amount. Against this backdrop, the market saw further increases in demand for new-regulation PS machines. In this environment, the number of manufacture applications for model certification tests increased rapidly during the second half of the fiscal year under review, rising to the point at which the very process of receiving them became difficult. This, as well as other factors, such as stagnation in the model certification test passing ratio caused by stricter standards, contributed to sluggish supply of titles to the market.
Under these conditions, we endeavored to achieve its full-year targets while holding on to several titles waiting for approval in accordance with model certification tests. However, we postponed sales for a portion of titles that required more time than anticipated between the receipt of test applications and subsequent approval. As a result, the number of PS machines sold during the fiscal year under review fell by 53,000 units YoY, to 138,000.

Tsuburaya Productions Co., Ltd. (hereinafter, “Tsuburaya Productions”), a company at the center of the IP business of the Group, promoted strategic expansion overseas through measures such as video distribution of the new animated feature ULTRAMAN in North America and China in an effort to become a global entertainment company grounded in its brand strategy. Accordingly, Tsuburaya Productions energetically worked to maximize its domestic monetization infrastructure and form strategic alliances.
In addition, Digital Frontier Inc. (hereinafter, “Digital Frontier”), which operates the Group’s video business, focused on the production of new video titles, such as the original TV anime The Magnificent Kotobuki, which was developed jointly with partnering companies. It also promoted the acceptance of video production orders globally, primarily in China.

The consolidated operating performance for the fiscal year under review included net sales of ¥51,639 million (down ¥9,416 million YoY), an operating loss of ¥1,363 million (a YoY improvement of ¥4,375 million), and an ordinary loss of ¥1,396 million (a YoY improvement of ¥3,808 million). Additionally, the Company posted ¥298 million in loss attributable to owners of parent, an improvement of ¥7,392 million YoY that was due to the recording of extraordinary income such as gains on sales of shares of subsidiaries and associates and gains on step acquisitions.
The consolidated business results detailed above have been impacted by the Group’s decision to record licensing royalty revenues of about ¥1,600 million, which were projected for the fiscal year under review, in April 2019 and after when fees corresponding to these sales are collected. More details can be found in the "Notification of differences between the consolidated performance forecast and actual results for the year ended March 31, 2019, and differences between the non-consolidated results for the year ended March 31, 2019 and the results for the previous fiscal year", dated May 15, 2019.

*: Regulation Partially Amending the Ordinance for Enforcement of the Act on Control and Improvement of Amusement Business and the Regulations for the Verification of Licenses, Formats and Other Aspects of Pachinko and Pachislot Machines, which were enforced on February 1, 2018.



ii.) Forecast for the year ending March 31, 2020

Profit plan for the year ending March 31, 2020

(Unit: Millions of yen) Results of FY3/2018 Results of FY3/2019 Forecast of FY3/2020
  Change   Change
Operating profit(loss) (5,738) (1,363) +4,375 1,500 +2,863
Ordinary profit(loss) (5,204) (1,396) +3,808 1,500 +2,896
Profit(loss) attributable to owners of parent (7,691) (298) +7,392 1,000 +1,298

The FIELDS CORPORATION Group considers focus on its core PS business and the growth of Tsuburaya Productions to be its most important issues in terms of business promotion during the fiscal year ending March 31, 2020.

In the PS business, at the center of which is FIELDS CORPORATION, we will demonstrate the results of our thorough product analysis and marketing. We will also focus on the planning, development and sale of optimal products that will entertain fans and make welcome additions to pachinko halls.
On the other hand, we have taken great care to ensure the careful and precise inclusion of possible impact from lead times between receipt of applications for model certification tests mandated by the Security Communications Association and subsequent model approvals in our earnings forecasts for the PS business in the fiscal year ending March 31, 2020.
In terms of product development, we will improve our grasp of market needs by raising the precision of our marketing technology while continuously working to optimize, and maximize the size of, the market and aiming for growth in sales of new machines.

Tsuburaya Productions, as the key to business growth of the Group, will use all of the Group’s collective strength to promote business expansion both inside and outside Japan. Tsuburaya Productions will focus on achieving three main points during the fiscal year ending March 31, 2020: raising the profitability of movies; promoting monetization and raising the brand value of IPs through measures such as active tie-ups with other companies; and accelerating global expansion, primarily in North America and China.
Digital Frontier will aim for further earnings expansion by continuing to conduct video production and accept orders for video development in Japan. It will also pursue this goal through work on high-quality video titles produced with its superior 3DCG technology and strategies such as the promotion of global expansion, primarily in China.

Our profit forecasts for the fiscal year ending March 31, 2020 have been disclosed in the table above. We have refrained from disclosing a forecast for net sales, as we expect the volatilities of net sales result from the flexible products mix*.
In accordance with the factors above, we forecast operating profit of ¥1,500 million (a YoY improvement of ¥2,863 million), ordinary profit of ¥1,500 million (a YoY improvement of ¥2,896 million), and profit attributable to owners of parent of ¥1,000 million (a YoY improvement of ¥1,298 million) in the fiscal year ending March 31, 2020.

*: The accounting method of our PS machine has two different ways of distribution sales and agency sales. There is a possibility that some machines have a large impact on net sales. Please refer to "Our Market" for details.



iii.) Basic policy for profit distribution, dividends for the fiscal year under review and the fiscal year ending March 31, 2020

The Company considers increasing corporate value to be a crucial management issue and follows a basic policy of paying appropriate dividends commensurate with profits realized. On the other hand, we consider that, due to the rapid changes of the market environment, stabilizing the financial capacity in medium- and long-term perspectives to give the priority to secure funds for investment toward expansion of profits will lead to the maximum return to shareholders which includes the future increase in corporate value.
In terms of specific figures, we have decided to propose a year-end dividend of ¥10 per share for the fiscal year ended March 31, 2019. This matter will be on the agenda at the 31st Annual General Meeting of Shareholders to be held on June 19, 2019. The dividends for the next fiscal year are to be ¥10 per share as well.

(2) Overview of financial position for the year ended March 31, 2019

  1. Assets
    Current assets amounted to ¥48,225 million, up ¥6,049 million YoY. The principal factors behind this were increase in cash and deposits, raw materials and supplies, and work in process.
    Property, plant and equipment amounted to ¥6,165 million, up ¥885 million YoY. The principal factor behind this was an increase in tools, furniture and fixtures.
    Intangible assets amounted to ¥3,170 million, up ¥1,785 million YoY. The principal factor behind this was an increase in goodwill.
    Investments and other assets amounted to ¥10,635 million, down ¥12,860 million YoY. The principal factor behind this was a decrease in long-term loans receivable.
    As a result of the above, total assets amounted to ¥68,196 million, down ¥4,139 million YoY.

  2. Liabilities
    Current liabilities amounted to ¥21,754 million, down 726 million YoY. The principal factor behind this was an increase in short-term loans payable and a decrease in notes and accounts payable-trade.
    Non-current liabilities amounted to ¥11,337 million, down ¥3,009 million YoY. The principal factor behind this was a decrease in long-term loans payable.
    As a result of the above, total liabilities amounted to ¥33,091 million, down ¥3,735 million YoY.

  3. Net assets
    Net assets amounted to ¥35,105 million, down ¥403 million YoY. The principal factor behind this was a decrease in retained earnings.

(3) Overview of cash flows for the year ended March 31, 2019

During the fiscal year under review, cash and cash equivalents (hereinafter, “cash”) increased by ¥4,434 million YoY, amounting to ¥28,807 million at the end of the year ended March 31, 2019.
Cash flow for the year ended March 31, 2019 and contributing factors are as follows:

  1. Cash flows from operating activities
    Net cash provided by operating activities amounted to ¥2,178 million (¥1,094 million of expenditure for the same period of the previous fiscal year). This was mainly due to a loss before income taxes of ¥26 million, a decrease in notes and accounts payable-trade of ¥2,668 million, a decrease in notes and accounts receivable-trade of ¥1,658 million, loss (gain) on sales of shares of subsidiaries and associates of ¥1,348 million, depreciation of ¥1,239 million, amortization of equity investment of ¥1,072 million, a decrease in inventories of ¥570 million, and share of profit (loss) of entities accounted for using equity method of ¥458 million.

  2. Cash flows from investing activities
    Net cash provided by investing activities amounted to ¥3,217 million (¥4,399 million of revenue for the same period of the previous fiscal year). This was mainly due to proceeds from purchase of shares of subsidiaries resulting in change in scope of consolidation totaling ¥2,818 million, proceeds from sales of shares of subsidiaries and associates totaling ¥1,800 million, and purchase of non-current assets totaling ¥1,391 million.

  3. Cash flows from financing activities
    Net cash used in financing activities amounted to ¥962 million (¥2,021 million of expenditure for the same period of the previous fiscal year). This was mainly due to repayments of long-term loans payable totaling ¥2,580 million, an increase in short-term loans payable totaling ¥1,809 million, and dividends paid totaling ¥169 million.