Nintendo : Fiscal Year Earnings (938KB)

Nintendo Co., Ltd.

CONSOLIDATED FINANCIAL STATEMENTS

May 6, 2021

												Nintendo Co., Ltd.
												11-1Hokotate-cho, Kamitoba,
												Minami-ku, Kyoto 601-8501
												Japan
Consolidated Results for the Years Ended March 31, 2020 and 2021	(Amounts below one million yen are rounded down)
(1) Consolidated operating results
			Net sales				Operating profit		Ordinary profit			Profit attributable
									to owners of parent
			million yen	%		million yen	%			million yen	%		million yen	%
Year ended March 31, 2021		1,758,910		34.4			640,634	81.8		678,996	88.4		480,376	85.7
Year ended March 31, 2020		1,308,519		9.0			352,370	41.1		360,461	30.0		258,641	33.3
[Notes]
Percentages for net sales, operating profit etc. show increase (decrease) from the last fiscal year.
Comprehensive income: Year ended march 31, 2021: 527,951 million yen [123.2%] Year ended march 31, 2020: 236,490 million yen [18.0%]
		Profit per share			Diluted profit		Return on equity		Ordinary profit	Operating profit
				per share				on total assets	to net sales
			yen					yen					%		%		%
Year ended March 31, 2021	4,032.60					-			28.1			31.0		36.4
Year ended March 31, 2020	2,171.20					-			17.5			19.9		26.9
[Reference]
Share of profit of entities accounted for using equity method: Year ended march 31, 2021: 6,564 million yen Year ended march 31, 2020: 7,945 million yen
(2) Consolidated financial positions
			Total assets				Net assets			Capital adequacy ratio		Net assets per share
			million yen				million yen			%		yen
As of March 31, 2021		2,446,918					1,874,614			76.6			15,734.79
As of March 31, 2020		1,934,087					1,540,900			79.7			12,933.51
[Reference]
Shareholders equity: As of March 31, 2021: 1,874,371 million yen As of March 31, 2020: 1,540,687million yen
(3) Consolidated cash flows
		Cash flows from			Cash flows from		Cash flows from			Cash and cash
		operating activities	investing activities		financing activities		equivalents - ending
			million yen				million yen				million yen			million yen
Year ended March 31, 2021		612,106						(136,533)			(194,938)			932,079
Year ended March 31, 2020		347,753						(188,433)			(111,031)			621,402
Dividends
		Dividend per share				Dividends in total		Dividend payout ratio	Dividends on net assets
	End of 2nd quarter	Year-end			Annual			(annual)		(consolidated basis)	(consolidated basis)
		yen		yen			yen		million yen		%		%
Year ended March 31, 2020		270.00	820.00			1,090.00			129,844			50.2		8.8
Year ending March 31, 2021		810.00	1,410.00		2,220.00			264,453			55.1		15.5
Year ending March 31, 2022		-*	-*				1,430.00							50.1
(forecast)

[Note]

*Dividends are paid twice a year after the end of the second quarter and at the fiscal year-end based on profit levels achieved in each fiscal year as our basic policy. As for the dividend forecast for the fiscal year ending March 31, 2022, only the annual dividend is described because the financial forecast for the year is prepared only on a full fiscal year basis and the dividend cannot be separately forecasted between the interim and the fiscal year-end.

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Nintendo Co., Ltd.

Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2022

Net sales

Operating profit

Ordinary profit

Profit attributable to

Profit per share

owners of parent

million yen

%

million yen

%

million yen

%

million yen

%

yen

Year ending March 31, 2022

1,600,000

(9.0)

500,000

(22.0)

480,000

(29.3)

340,000

(29.2)

2,854.20

[Notes]

Percentages for net sales, operating profit etc. show increase (decrease) from previous period.

With respect to the impact of COVID-19, please refer to "2. Outlook for the Fiscal Year Ending March 31, 2022" on page 4.

Others

(1) Changes for important subsidiaries during the fiscal year ended March 31, 2021

: Not applicable

(2) Changes in accounting procedures:

: Not applicable

1)

Related to accounting standard revisions etc.

2)

Other changes

: Not applicable

3)

Changes in accounting estimates

: Not applicable

4)

Modified restatements

: Not applicable

1. Outstanding shares (common shares)
2. 1. Number of shares outstanding (including treasury shares)

	As of Mar. 31, 2021 :	131,669,000	shares	As of Mar. 31, 2020 :	131,669,000	shares
2)	Number of treasury shares
	As of Mar. 31, 2021 :	12,546,233	shares	As of Mar. 31, 2020 :	12,545,354	shares
3)	Average number of shares
	Year ended Mar. 31, 2021 :	119,123,333	shares	Year ended Mar. 31, 2020 :	119,124,148	shares

(Reference) Non-consolidated Results

Non-consolidated Results for the Years Ended March 31, 2020 and 2021

(1) Non-consolidated operating results

	Net sales		Operating profit		Ordinary profit		Profit
	million yen	%	million yen	%	million yen	%	million yen	%
Year ended March 31, 2021	1,468,563	36.4	540,217	80.0	573,057	93.5	403,339	91.3
Year ended March 31, 2020	1,076,852	7.4	300,108	35.0	296,204	25.2	210,842	28.9

[Note] Percentages for net sales, operating profit etc. show increase (decrease) from the last fiscal year.

	Profit per share	Diluted Profit per share
	yen	yen
Year ended March 31, 2021	3,385.90	-
Year ended March 31, 2020	1,769.94	-
(2) Non-consolidated financial positions
	Total assets	Net assets	Capital adequacy	Net assets per share
	ratio
	million yen	million yen	%	yen
As of March 31, 2021	1,765,683	1,281,948	72.6	10,761.57
As of March 31, 2020	1,367,766	1,051,147	76.9	8,824.00
[Reference]

Shareholders equity: As of March 31, 2021: 1,281,948 million yen As of March 31, 2020: 1,051,147 million yen [Notes]

1. This earnings release report is not subject to audit by certified public accountant or audit firm.
2. Forecasts announced by the Company (Nintendo Co., Ltd.) referred to above were prepared based on management's assumptions with information available at this time and therefore involve known and unknown risks and uncertainties. Please note such risks and uncertainties may cause the actual results to be materially different from the forecasts (earnings forecast, dividend forecast, and other forecasts). For details, please refer to "2. Outlook for the Fiscal Year Ending March 31, 2022" on page 4.

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Nintendo Co., Ltd.

Description of Operating Results

1. Operating Results and Financial Positions for the Fiscal Year Ended March 31, 2021

(1) Operating Results and Financial State for the Fiscal Year Ended March 31, 2021

The results for this fiscal year (April 2020 through March 2021) showed strong software sales for Nintendo Switch, which contributed greatly to the growth of hardware sales. In particular, sales continued to grow for titles released in previous fiscal years, with units of Animal Crossing: New Horizons at 20.85 million (cumulative sales of 32.63 million units), Mario Kart 8 Deluxe at

1. million (cumulative sales of 35.39 million units), and Ring Fit Adventure at 7.38 million (cumulative sales of 10.11 million units). Super Mario 3D All-Stars and Super Mario 3D World + Bowser's Fury, which were released this fiscal year as part of the Super Mario Bros. 35th Anniversary campaign, saw sales of 9.01 million units and 5.59 million units, respectively. In addition to Nintendo titles, sales of titles from other software publishers also continued to grow steadily, for a total of 36 million-seller titles for this fiscal year, including titles from these other software publishers.

As a result, hardware sales reached 28.83 million units (an increase of 37.1% year-on-year), and software sales reached 230.88 million units (an increase of 36.8% year-on-year).

Turning to our digital business for dedicated video game platforms, sales were strong for downloadable versions of packaged software for Nintendo Switch. Sales also grew for add-on content, including Pokémon Sword Expansion Pass, Pokémon Shield Expansion Pass, and Super Smash Bros. Ultimate Fighters Pass Vol. 2. In addition, sales of download-only titles and sales related to Nintendo Switch Online were also steady, helping to bring digital sales to 344.1 billion yen (an increase of 68.5% year-on-year).

For the mobile business, many consumers continue to enjoy playing our mobile applications, and our mobile and IP related income reached 57.0 billion yen (an increase of 11.3% year-on-year).

As a result, net sales reached 1,758.9 billion yen, with overseas sales of 1,361.4 billion yen accounting for 77.4% of the total. Operating profit came to 640.6 billion yen, ordinary profit was 678.9 billion yen, and profit attributable to owners of parent totaled

1. billion yen for this fiscal year.

1. Financial positions as of March 31, 2021

Total assets increased by 512.8 billion yen compared to the prior fiscal year-end to 2,446.9 billion yen mainly due to an increase in cash and deposits and securities. Total liabilities increased by 179.1 billion yen compared to the prior fiscal year-end to 572.3 billion yen mainly due to an increase in income taxes payable and notes and accounts payable-trade. Net assets increased by 333.7 billion yen compared to the prior fiscal year-end to 1,874.6 billion yen.

(3) Cash flows for the fiscal year ended March 31, 2021

The ending balance of "Cash and cash equivalents" (collectively, "Cash") as of March 31, 2021 was 932.0 billion yen, with an increase of 310.6 billion yen during the fiscal year. During the prior fiscal year, there was an increase of 36.0 billion yen. Net increase (decrease) of Cash and contributing factors during the fiscal year ended March 31, 2021 are as follows:

Net cash provided by (used in) operating activities:

There were decreasing factors contributing to 681.3 billion yen of profit before income taxes such as payment of income taxes. However, due to increasing factors such as an increase in trade payables, net cash resulted in an increase of 612.1 billion yen compared to an increase of 347.7 billion yen during the prior year.

Net cash provided by (used in) investing activities:

Net cash from investing activities decreased by 136.5 billion yen compared to a decrease of 188.4 billion yen during the prior year mainly due to proceeds from withdrawal of time deposits and sales and redemption of short-term and long-term investment securities being lower than payments into time deposits and purchase of short-term and long-term investment securities.

Net cash provided by (used in) financing activities:

Net cash from financing activities decreased by 194.9 billion yen compared to a decrease of 111.0 billion yen during the prior year mainly due to payments of cash dividends.

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Nintendo Co., Ltd.

2. Outlook for the Fiscal Year Ending March 31, 2022

For Nintendo Switch, our goal is to continue to convey the appeal of the hardware and software and maintain sales momentum at a high level. Regarding the hardware, we will release a new blue color Nintendo Switch Lite in May. First-party software titles planned for global release include Miitopia in May, Mario Golf: Super Rush in June, and The Legend of Zelda: Skyward Sword HD in July. In addition, the Pokémon series is receiving new additions with the planned release of Pokémon Brilliant Diamond and Pokémon Shining Pearl in late 2021. Other software publishers also plan to release a wide variety of titles, and we will work to invigorate the platform with this continuous stream of new titles combined with existing popular titles.

In our mobile business, we are collaborating with Niantic to develop a new application featuring Pikmin for smart devices. This title is expected to be released by Niantic in the second half of 2021. We will also focus on efforts that encourage consumers to continue to enjoy playing the mobile applications we have previously released.

Through these initiatives, we expect to see results for the fiscal year ending March 31, 2022 of 1,600.0 billion yen in net sales,

500.0 billion yen in operating profit, 480.0 billion yen in ordinary profit, and 340.0 billion yen in profit attributable to owners of the parent.

The unit sales for key products used in these forecasts can be found on page 14 under the heading "(4) Consolidated sales units, number of new titles, and sales units forecasts" in the section titled "Others." Assumed exchange rates for the major currencies are 105 yen per US dollar, and 120 yen per euro.

Regarding the risk associated with COVID-19, while the impact on business results for the fiscal year ended March 31, 2021 was limited, the supply of products might be affected if production and shipments are hindered. Other risk factors which are difficult to predict also continue to exist, involving areas such as development and marketing of products and services.

In addition, the production of products might be affected by obstacles to the procurement of parts, including the increase in global demand for semiconductor components. The consolidated earnings forecast is based on the premise that we will be able to secure the parts needed for the manufacture of products in line with our sales plans.

The Nintendo group will take the necessary measures and continue business operations to provide an environment in which consumers can continue to enjoy Nintendo products and services.

[Note] Forecasts announced by the Company referred to above were prepared based on management's assumptions with information available at this time and therefore involve known and unknown risks and uncertainties. Please note such risks and uncertainties may cause the actual results to be materially different from the forecasts (earnings forecast, dividend forecast and other forecasts).

3. Basic Policy of Profit Distribution and Dividends

It is the Company's basic policy to internally provide the capital necessary to fund future growth, including capital investments, and to maintain a strong and liquid financial position in preparation for changes in the business environment and intensified competition. As for direct profit returns to our shareholders, dividends are paid based on profit levels achieved in each fiscal period.

The annual dividend per share will be established at the higher of the amount calculated by dividing 33% of consolidated operating profit by the total number of outstanding shares, excluding treasury shares, as of the end of the fiscal year rounded up to the 10 yen digit, and the amount calculated based on the 50% consolidated profit standard rounded up to the 10 yen digit.

The end of 2nd quarter (interim) dividend per share is calculated by dividing 33% of consolidated operating profit by the total number of outstanding shares, excluding treasury shares, as of the end of the six-month period rounded up to the 10 yen digit.

The annual dividend per share for the fiscal year ended March 31, 2021 is expected to be 2,020 yen based on our basic dividend policy. However, after considering the consolidated financial results for this fiscal year, we have decided to add 200 yen per share to this amount, which will bring the annual dividend per share to 2,220 yen (interim: 810 yen, year-end: 1,410 yen). Dividend for the fiscal year ending March 31, 2022 will be 1,430 yen if earnings are in line with the financial forecast herein. The end of 2nd quarter dividends are yet to be determined as there are no interim financial forecasts, but there are no changes to our dividend policy.

Retained earnings are maintained for effective use in research of new technology and development of new products and services, capital investments and securing materials, enhancement of selling power including advertisements, strengthening of network infrastructure, and treasury share buyback whenever deemed appropriate.

Basic Policy on the Selection of Accounting Standards

In light of the comparability of consolidated financial statements over different fiscal years, Nintendo has a policy of preparing its consolidated financial statements in accordance with accounting principles generally accepted in Japan, which has been designed for convergence with International Financial Reporting Standards (IFRS), for the time being. Taking into account the possible adoption of IFRS in the future, Nintendo continues to collect information and conduct various studies, participating in seminars hosted by external organizations.

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		Nintendo Co., Ltd.
Consolidated Balance Sheets
		million yen
Description	As of March 31, 2020	As of March 31, 2021
(Assets)
Current assets
Cash and deposits	890,402	1,185,151
Notes and accounts receivable-trade	133,051	140,570
Securities	326,382	557,238
Inventories	88,994	86,817
Other	63,268	50,692
Allowance for doubtful accounts	(515)	(94)
Total current assets	1,501,583	2,020,375
Non-current assets
Property, plant and equipment
Buildings and structures, net	38,149	42,230
Tools, furniture and fixtures, net	4,681	4,783
Machinery, equipment and vehicles, net	1,678	1,591
Land	37,685	34,785
Construction in progress	672	178
Total property, plant and equipment	82,866	83,569
Intangible assets
Software	12,832	11,106
Other	2,185	3,815
Total intangible assets	15,017	14,922
Investments and other assets
Investment securities	237,710	214,832
Retirement benefit asset	6,407	8,205
Deferred tax assets	72,199	82,819
Other	18,329	22,194
Allowance for doubtful accounts	(27)	-
Total investments and other assets	334,619	328,051
Total non-current assets	432,504	426,543
Total assets	1,934,087	2,446,918

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