Nintendo : Nine Months Financial Results Briefing for the Fiscal Year Ending March 2022 (Online) - Financial Results Explanatory Material (with Notes) (847KB)

Financial Results Explanatory Material

3rd Quarter of Fiscal Year Ending March 2022

Nintendo Co., Ltd.

February 3, 2022

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Nintendo Co., Ltd.

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1. Consolidated Financial Results and Outlook

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• We would like to talk about the consolidated financial results for the first nine months of the fiscal year ending March 2022 (hereinafter referred to as "the third quarter").

Nintendo Co., Ltd.

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Consolidated Financial Highlights

FY21/Q1-Q3FY22/Q1-Q3 Comparison

Net sales	1,404.4	bn yen	1,320.2	bn yen	-6.0	%
Operating profit	521.1	bn yen	472.5	bn yen	-9.3	%
Operating profit ratio	37.1	%	35.8	%	-1.3	pt.
Ordinary profit	528.2	bn yen	513.7	bn yen	-2.7	%
Net profit	376.6	bn yen	367.3	bn yen	-2.5	%
Net profit ratio	26.8	%	27.8	%	+1.0	pt.

*Net profit: Profit attributable to owners of parent *FY = Fiscal Year

FY22/Q1-Q3 indicates the period between April 1 and December 31, 2021.

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• Year-on-year,net sales for the third quarter declined by 6.0% to 1,320.2 billion yen, operating profit declined by 9.3% to 472.5 billion yen, ordinary profit declined by 2.7% to 513.7 billion yen, and profit attributable to owners of parent declined by 2.5% to 367.3 billion yen.

Nintendo Co., Ltd.

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Consolidated Sales

	FY21/Q1-Q3	FY22/Q1-Q3	Comparison
Net sales	1,404.4 bn yen	1,320.2	bn yen	-6.0%
Dedicated video game platform*1	1,361.0 bn yen	1,278.2	bn yen	-6.1%
Mobile, IP related income, etc.*2	42.0	bn yen	39.8	bn yen	-5.2%
Playing cards, etc.	1.3	bn yen	2.1	bn yen	+57.8 %

*1 Includes hardware, software (including downloadable versions of packaged software, download-only software, add-on content, and Nintendo Switch Online) and accessories.

*2 Includes income from smart-device content and royalty income.

Effect of changes in foreign exchange rates on net sales: +59.8 billion yen

FY22/Q1-Q3 Regional Sales Ratio

9.7%	Japan
21.0%
26.5%	The Americas
	Europe
42.8%	Other

Proportion of overseas sales: 79.0%

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• Next, we would like to give a breakdown of consolidated sales.
• Sales from our dedicated video game business declined by 6.1% year-on-year to 1,278.2 billion yen. Sales have decreased this fiscal year, compared to last fiscal year, when Animal Crossing: New Horizons was such a large driver of the overall Nintendo Switch business. However, cumulative sales of Nintendo Switch hardware have now grown beyond 100 million units, and as a result of continued good sales of new and evergreen titles that have leveraged this install base, overall net sales reached the third highest level of sales seen in a third quarter.
• Income from smart-device content declined year-on-year, but royalty income increased, with the result that overall sales in our mobile and IP related business declined by 5.2% to 39.8 billion yen.
• The impact of the exchange rate on net sales was a gain of 59.8 billion yen.

Nintendo Co., Ltd.

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Gross Profit

		FY21/Q1-Q3	FY22/Q1-Q3	Comparison
Gross profit		768.8 bn yen	734.0	bn yen	-4.5%
Gross profit ratio	54.7 %		55.6	%	+0.9 pt.
		Main Variable Factors
		FY21/Q1-Q3		FY22/Q1-Q3	Comparison
Proportion of hardware	54.0 %		50.4		-3.6pt.
sales*1			%
Proportion of first-party	81.6 %		77.7		-3.9pt.
software sales*2		%
Proportion of digital	40.9 %		40.2		-0.7pt.
sales*2			%
Average	1 USD	106.04 yen		111.06	yen	+5.02 yen
exchange rate	1 Euro	122.35 yen		130.54	yen	+8.19 yen
*1 Proportion of sales to total dedicated video game platform sales				5
*2 Proportion of sales to total dedicated video game platform software sales

• Next, we would like to take an itemized look at profits.
• Gross profit declined 4.5% year-on-year to 734.0 billion yen due to the decrease in net sales.
• The gross profit margin increased by 0.9 percentage points year-on-year to 55.6%, due mainly to the exchange-rate effect of a weak yen, even though the ratio of first-party software sales to total software sales declined.

Nintendo Co., Ltd.

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