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    7832   JP3778630008

BANDAI NAMCO HOLDINGS INC.

(7832)
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BANDAI NAMCO : Integrated Report 20215.2 MB

09/29/2021 | 09:12pm EST

BANDAI NAMCO Group

INTEGRATED REPORT 2021

www.bandainamco.co.jp

OUR MISSION STATEMENT

OUR VISION

"Dreams, Fun and Inspiration" are the Engine of Happiness.

Through our entertainment products and services, BANDAI NAMCO will continue to provide

"Dreams, Fun and Inspiration" to people around the world, based on our boundless creativity and enthusiasm.

As an entertainment leader across the ages, BANDAI NAMCO is constantly exploring new areas and heights in entertainment. We aim to be loved by people who have fun and will earn their trust as "the Leading Innovator in Global Entertainment."

CONTENTS

02 OUR GROWTH TRACK

04 THE BANDAI NAMCO GROUP-1 YEAR OF RESULTS

06 THE BANDAI NAMCO GROUP- ORGANIZATIONAL STRUCTURE AND OVERVIEW

08 MAJOR IP IN GROUP PRODUCTS AND SERVICES

26 MESSAGE FROM THE DIRECTOR IN CHARGE OF MANAGEMENT PLANNING AND ESG

28 MESSAGES FROM THE PRESIDENTS OF THE BUSINESS MANAGEMENT COMPANIES

38 REVIEW OF THE PREVIOUS MID-TERM PLAN (APRIL 2018 TO MARCH 2021)

The strength of the BANDAI NAMCO Group is the IP axis strategy, under which we work to maximize the value of characters and other intellectual property (IP) to provide the optimal products and services at the optimal time in the optimal region.

Based on the IP axis strategy, we will strive to forge connections with fans in global markets and contribute to the creation of a world that fosters happiness by providing "Dreams, Fun and Inspiration" through the Group's products and services.

10 THE GROUP'S GREATEST STRENGTH- THE IP AXIS STRATEGY

12 THE BANDAI NAMCO GROUP- OUR VALUE CREATION PROCESS

14 BOARD OF DIRECTORS AND AUDIT & SUPERVISORY BOARD MEMBERS

16 CHAIRMAN'S MESSAGE

18 PRESIDENT'S MESSAGE

22 RISKS AND OPPORTUNITIES FOR THE BANDAI NAMCO GROUP

24 MESSAGE FROM THE DIRECTOR IN CHARGE OF FINANCE AND INFORMATION

40 SPECIAL FEATURE

EMPOWER, GAIN MOMENTUM, AND ACCELERATE EVOLUTION IN A NEW ERA

56 ESG SECTION

ROUNDTABLE DISCUSSION AMONG OUTSIDE DIRECTORS / CORPORATE GOVERNANCE / OFFICER SYSTEM / HUMAN RESOURCES INITIATIVES / CSR INITIATIVES

84 FINANCIAL SECTION

  1. CORPORATE DATA
  2. OVERVIEW OF MAIN GROUP COMPANIES

IR

CSR

Our website provides a variety of information about the BANDAI

NAMCO Group, such as IR information and CSR initiatives. Please utilize the website in conjunction with this report.

www.bandainamco.co.jp/en/index.html

About Integrated Report 2021

In editing this report, we made reference to the Value Reporting Foundation's International Integrated Reporting Framework and SASB disclosure standards for Toys & Sporting Goods and for Software and IT Services, as well as the TCFD recommendations.

Forward-Looking Statements

The forward-looking statements in this report are based on the information available to management as of August 2021 and include various risks and uncertainties. Accordingly, actual results may differ materially from these projections for a variety of reasons. Major factors that could influence actual results include changes in the BANDAI NAMCO Group's operating environment, market trends, and exchange rate fluctuations.

Notes:

  1. Figures in this report have been rounded down.
  2. FY2021.3 represents the one-year period ended March 31, 2021.
  3. Unless otherwise noted, figures in this report are as of August 2021.

1

OUR GROWTH TRACK

The BANDAI NAMCO Group was created in September 2005 through the management integration of BANDAI CO., LTD., and NAMCO LIMITED. After the integration, the Group moved quickly to leverage synergy effects by implementing a range of internal measures. However, we were not able to respond adequately to changes in our markets and customers. Our operational speed declined, and we did not effectively utilize the strengths of each Group company. As a result, our performance was sluggish. In response, in April 2010 we launched the Restart Plan with the objective of transforming ourselves into a speedy Group under the IP axis strategy. The Group worked together to maximize the shared value of IP, and in this way we achieved a recovery in our results. In the fiscal year ended March 31, 2021, our businesses were affected by the spread of COVID-19, but the Group's wide-ranging business portfolio demonstrated its effectiveness, and we achieved record-high levels of net sales and operating profit.

Registered record-high

net sales for seven consecutive years.

Management

Integration

Net Sales

(¥ billion)

450.8

459.1

Operating 42.2

Profit 35.6

(¥ billion)

For the Fiscal Years

Ended March 31

Restart!

Launched the Restart Plan and announced the IP axis strategy to

transform ourselves into a speedy Group, improve our profitability,

and strengthen our financial standing.

620.0

575.5

565.4

507.6

487.2

63.2

460.4

426.3

454.2

56.3

378.5

394.1

48.6

49.6

44.6

34.6

Reorganized our business

33.4

segments. Established

the Network Entertainment

and Visual and Music

22.3

Production Units.

16.3

1.8

Achieved record-high

Attained record-high

operating profit

net sales and

for three

operating profit.

consecutive years.

740.9

732.3723.9

678.3

84.0

84.6

75.0

78.7

Transitioned from a system

of three business

segments

to a system of

five Units,

Changed to a system of three Units.

including the newly

The Toys and Hobby Unit and the

established

Network Entertainment Unit were

Real Entertainment Unit and

combined to form the Entertainment

IP Creation Unit.

Unit, while the Visual and Music

Production Unit and the IP Creation Unit

were combined to form the

IP Production Unit. The Real

Entertainment Unit changed its name to

the Amusement Unit.

TRACK GROWTH OUR

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Reduction in speed

Introduction of

Transformation

Adoption of IP

IP axis strategy:

Unresponsive to operating

Restart Plan

into a speedy Group

axis strategy by

From adoption to acceleration

environment and trends

the Group

2021.4-2022.3 Enhancing

2007.3-2009.3Mid-term Plan2010.3-2012.3 Mid-term Plan2013.3-2015.3 Mid-term Plan 2016.3-2018.3Mid-term Plan2019.3-2021.3 Mid-term Plan Business Foundations and

Systems for the Next Mid-term Plan

2

3

THE BANDAI NAMCO GROUP-

FY2021.31 YEAR OF RESULTS

BANDAI NAMCO Holdings Inc. and Consolidated Subsidiaries

For the Fiscal Years Ended March 31

Net Sales

Operating Profit

¥740.9billion

¥84.6 billion

+2.3%

+7.5%

YoY

YoY

732.3

723.9 740.9

84.0

84.6

678.3

75.0

78.7

620.0

Operating 63.2

Net Sales

Profit

(¥ billion)

(¥ billion)

10.2

11.1

11.5

10.9

11.4

Operating

20.6

20.5

22.3

Profit

Overseas

20.0

Margin

18.7

(%)

Sales

Proportion

2017

2018

2019

2020

2021

2017

2018

2019

2020

2021

(%)

Overview of Results

In the fiscal year ended March 31, 2021, the spread of COVID-19 had an effect on the Real Entertainment Unit, the Visual and Music Production Unit, and other businesses. However, we advanced a variety of initiatives to adapt to the changes in customer lifestyles and preferences, such as strengthening sales and marketing through the use of digital technologies. In the Toys and Hobby Unit, multiple products enjoyed popularity with customers, such as products for the mature fan base and products utilizing new IP. In addition, in the Network Entertainment Unit, sales of network content and repeat sales of home video games were favorable. The Group's favorable overall results are attributable to the effectiveness of our wide-ranging business portfolio.

Shareholders' Equity Ratio

69.7%

429.3

453.0 472.8

394.1

357.6

Total

71.3

71.5

72.5

69.7

Shareholders'

70.0

Equity

(¥ billion)

Shareholders'

Equity Ratio

(%)

2017 2018 2019 2020 2021

RESULTS OF YEAR 1

Cash Dividends per Share

Basic Earnings per Share

¥112

¥-20

¥222.58

YoY

YoY

¥-39.81

145

132

288.40

(Yen)

123*2

262.39

112

246.29

222.58

201.03

Cash

82*1

49.9

50.3

50.3

50.3

Dividends

40.8

per Share

(Yen)

Total Payout

Ratio

(%)

2017

2018

2019

2020

2021

2017

2018

2019

2020

2021

*1 FY2017.3 includes a special dividend of ¥20.

*2 FY2018.3 includes a special dividend of ¥25.

Segment Sales Ratio

Breakdown of Operating Profit (Loss) by Segment

Debt/Equity Ratio*2

ESG (For detailed data, please refer to FACT BOOK 2021, a separate publication.)

IP Creation

Others

3.6%

4.3%

Visual and Music

Toys and Hobby

Production

3.5%

37.3%

Real

Network

Entertainment

Entertainment

8.0%

43.3%

Note: Percentage figures are calculated based on sales before elimination of inter-segment transactions.

Toys and Hobby

Network Entertainment

Real Entertainment

Visual and Music Production

IP Creation

Others

Operating

Operating

Profit (Loss)

Profit Margin

¥38.2 billion

12.9%

¥57.3 billion

16.7%

¥-8.3 billion

-

¥0.9 billion

3.5%

¥2.7 billion

9.7%

¥1.4 billion

4.2%

0.05 times

27.3

Interest-Bearing Debt*1

(¥ billion)

Debt/Equity

6.1

0.05

Ratio*2

(times)

0.8

1.4

0.9

0.01

0.00

0.00

0.00

Number of Female Managers*

157 people

Ratio of Female Managers to Total Managers*

19.1%

Number of Independent Directors or Independent Audit & Supervisory Board Members

7 people

Number of Consolidated Employees

9,550 people

Industrial Waste

2,099t

CO Emissions

52,256t-co2

2017

2018

2019

2020

2021

*1 From FY2020.3, certain overseas consolidated subsidiaries applied IFRS 16 "Leases." Increase in long-term borrowings in FY2021.3

*2 Debt/equity ratio = Interest-bearing debt / Total shareholders' equity

* Figures are for the five Unit core companies in FY2021.3.

Contributions to Net Sales by Geographic Region

Asia, excluding Japan

Europe 7.0%

7.4%

Americas

Japan

7.9%

77.7%

Note: Percentage figures are calculated based on external sales. Figures are estimates based on management accounting.

Return on Equity (ROE)

Return on Assets (ROA)

10.2%

13.0%

511.4

732.7

387.3

429.6

454.6

612.9 619.8

348.7

540.4

15.5

488.0

14.7

13.3

13.1

14.7

15.1

13.0

13.5

12.9

10.2

Total Net Assets

Total Assets

(¥ billion)

(¥ billion)

ROE

ROA

(%)

(%)

2017

2018

2019

2020

2021

2017

2018

2019

2020

2021

Sales of IP* Products and Services (Group Total)

KAMEN RIDER series

Mobile Suit Gundam series

2020

2021

2020

2021

¥28.9 billion

¥95.0 billion

¥31.2 billion

¥78.1 billion

DRAGON BALL series

BORUTO/NARUTO

2020

2021

2020

2021

¥134.9 billion

¥127.4 billion

¥13.0 billion

¥21.4 billion

ONE PIECE

2020

2021

¥38.0 billion

¥34.9 billion

* IP: Characters and other intellectual property

Game Content R&D Investment and Capital Investment

83.5

83.2

84.7

72.4

59.0

54.8

Game Content

R&D Investment

(¥ billion)

27.3

22.7

19.5

22.0

Capital

Investment

(¥ billion)

2017

2018

2019

2020

2021

4

5

The BANDAI NAMCO Group-

ORGANIZATIONAL STRUCTURE

AND OVERVIEW

In advance of the next Mid-term Plan, which starts in April 2022, we implemented a reorganization from the previous five-Unit system to a three-Unit system.

Purpose of Reorganization

Business Overview

Results in the Fiscal Year Ended March 31, 2021*

AND STRUCTURE ORGANIZATIONAL

ENTERTAINMENT UNIT

Digital Business

Toys and Hobby Business

Through the combination of the Digital business (formerly the Network Entertainment Unit) and the Toys and Hobby business (formerly the Toys and Hobby Unit), the Entertainment Unit will promote closer coordination of business activities centered around the IP axis and cooperation and expansion that mutually utilize a wide range of outputs, while enhancing the creation of entertainment and strengthening the digitalization corresponding to customers' new sense of value.

With these changes, the Unit aims to increase competitiveness in global markets.

Digital Business

Business Management Company:

BANDAI NAMCO Entertainment Inc.

Planning, development, and distribution of network content; planning, development, and sales of home video games

Toys and Hobby Business

Business Management Company:

BANDAI CO., LTD.

Planning, development, production, and sales of toys, capsule toys, cards, confectionery and foods, apparel, sundries, plastic models, prizes, stationery, and other products

Digital Business

Net Sales

Operating Profit

¥337.9 billion

¥56.7 billion

Toys and Hobby Business

Net Sales

Operating Profit

¥300.8 billion

¥39.0 billion

OVERVIEW

IP PRODUCTION UNIT

Visual and Music Business Creation Business

The IP Production Unit will consolidate the studio and production function that creates IP, in order to strengthen the capabilities to create IP which enables it to produce more-diverse synergy effects through collaboration not only within the Unit but also with various businesses of the Group and external partners.

Visual and Music Business

Business Management Company:

BANDAI NAMCO Arts Inc.

Planning, production, and management of visual and music content; artist discovery and development; and live entertainment operations

Creation Business

Business Management Company:

SUNRISE INC.

Planning and production of animations; management and administration of copyrights and other rights; production of music related to animations and management and administration of music and masters related to animations

Visual and Music Business

Net Sales

Operating Profit

¥34.2 billion

¥1.5 billion

Creation Business

Net Sales

Operating Profit

¥28.2 billion

¥2.7 billion

AMUSEMENT UNIT

The Amusement Unit provides points of customer contact in the IP axis strategy. The Unit will select and focus on the strengths unique to the BANDAI NAMCO Group in such ways as utilizing IP and the Group's resources, and work to build a strong business foundation to generate earnings stably under a more unified framework for collaborating with the Group's other businesses.

Business Management Company:

BANDAI NAMCO Amusement Inc.

Planning, development, production, and sales of amusement machines; planning and operation of amusement facilities, etc.

Net Sales

Operating Loss

¥63.9 billion

¥-8.3 billion

AFFILIATED BUSINESS

and administrative services

Net Sales

Operating Profit

Supporting the Units in such areas as distribution, logistics,

¥24.6 billion

¥0.6 billion

COMPANIES

* Due to the change in the Unit system, FY2021.3 results were reorganized to the business segment classifications after the change.

6

7

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Bandai Namco Holdings Inc. published this content on 30 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 September 2021 01:11:06 UTC.


© Publicnow 2021
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Last Close Price 9 053,00 JPY
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Spread / Average Target 13,1%
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Masaru Kawaguchi President & Representative Director
Mitsuaki Taguchi Chairman
Shuji Ohtsu Director & General Manager-Group Administration
Yuzuru Matsuda Independent Outside Director
Satoko Kuwabara Independent Outside Director
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