Consolidated Financial Statements
Results for the fiscal year ended March 31, 2021
April 1, 2020, to March 31, 2021
May 13, 2021
SANKYO CO., LTD.
https://www.sankyo-fever.co.jpShares listed: Tokyo (1st Section) Code number: 6417
Representative: | Kimihisa Tsutsui, President & COO |
Contact: | Yoko Oshima, Executive Operating Officer |
Telephone: | +81-3-5778-7777 |
Planned Date for Annual Meeting of Shareholders: | June 29, 2021 |
Planned Date for Start of Dividend Payment: | June 30, 2021 |
Planned Date for Submittal of the Financial Statements Report: | June 30, 2021 |
Supplementary materials for the financial statements: | Yes |
Presentation to explain for the financial statements: | Yes |
(Figures less than 1 million yen have been omitted.)
1. Results for the fiscal year (From April 1, 2020, to March 31, 2021)
(1) Consolidated operating results
(Percentage figures denote year-over-year changes.)
Net sales | Operating income | Recurring income | Profit attributable to | |||||||
owners of parent | ||||||||||
Millions of yen | Millions of yen | Millions of yen | Millions of yen | |||||||
Year ended March 31, 2021 | 58,129 | (25.9%) | 6,587 | (47.5%) | 7,488 | (44.4%) | 5,749 | (55.9%) | ||
Year ended March 31, 2020 | 78,416 | (11.5%) | 12,551 | (41.0%) | 13,476 | (39.6%) | 13,045 | (2.5%) | ||
(note) Comprehensive income | Year ended March 31, 2021 | ¥8,306 million | [(25.3%)] | Year ended March 31, 2020 | ¥11,114 million | [(7.7%)] |
Net income per | Fully diluted net | Return on equity | Return on assets | Return on sales | |
share | income per share | (net income) | (recurring income) | (operating income) | |
Yen | Yen | % | % | % | |
Year ended March 31, 2021 | 93.97 | 93.08 | 2.1 | 2.4 | 11.3 |
Year ended March 31, 2020 | 183.43 | 172.69 | 4.3 | 3.7 | 16.0 |
(reference) Equity in earnings of affiliates Year ended March 31, 2021 - millionYear ended March 31, 2020 - million
(2) Consolidated financial position
Total assets | Net assets | Capital adequacy | Net assets | |
ratio | per share | |||
Millions of yen | Millions of yen | % | Yen | |
As of March 31, 2021 | 292,104 | 268,887 | 91.4 | 4,365.81 |
As of March 31, 2020 | 325,232 | 269,521 | 82.4 | 4,380.33 |
(reference) Shareholders' Equity | As of March 31, 2021 | ¥267,121 million | As of March 31, 2020 | ¥267,946 million |
(3) Consolidated cash flows
Cash flows from | Cash flows from | Cash flows from | Cash and cash equivalents | |
operating activities | investing activities | financing activities | at the end of the year | |
Millions of yen | Millions of yen | Millions of yen | Millions of yen | |
Year ended March 31, 2021 | 10,563 | 29,638 | (29,177) | 203,318 |
Year ended March 31, 2020 | 18,971 | (21,748) | (79,223) | 192,294 |
2. Dividends
Cash dividend per share | Amount of | Dividend | Dividend rate | ||||||
(Base date) | 1st quarter | 2nd quarter | 3rd quarter | Year-end | Full Year | dividends | payout ratio | of net assets | |
Yen | Yen | Yen | Yen | Yen | Millions of yen | % | % | ||
Year ended March 31, 2020 | - | 75.00 | - | 75.00 | 150.00 | 9,175 | 81.8 | 3.5 | |
Year ended March 31, 2021 | - | 75.00 | - | 75.00 | 150.00 | 9,177 | 159.6 | 3.4 | |
Year ended March 31, 2022 (forecast) | - | 50.00 | - | 50.00 | 100.00 | 92.7 |
3. Forecast for FY2022 (From April 1, 2021, to March 31, 2022)
(Percentage figures denote year-over-year changes.)
Net sales | Operating | Recurring | Profit attributable to | Net income | |||||
income | income | owners of parent | per share | ||||||
Millions of yen | Millions of yen | Millions of yen | Millions of yen | Yen | |||||
Year ending | 73,000 | 25.6% | 8,900 | 35.1% | 9,600 | 28.2% | 6,600 | 14.8% | 107.87 |
March 31, 2022 | |||||||||
SANKYO Group manages its business plan on a full-year basis and thus only discloses full-year figures. For details, please refer to Qualitative Information and Financial Statements "1.Overview of business results etc. (4) Future outlook" of the attached documents on Page 4.
English translation of "KESSAN TANSHIN" originally issued in Japanese language | - 1 - |
SANKYO CO., LTD. (TSE #6417) Results for FY2021
* Notes
- Changes for important subsidiaries during the fiscal year ended March 31, 2021: Not applicable
- Changes in accounting procedures
a. Related to accounting standard revisions etc.: | Not applicable |
b. Other changes: | Not applicable |
c. Changes in accounting estimates: | Not applicable |
d. Retrospective restatements: | Not applicable |
- Outstanding shares (common shares)
a. Number of shares outstanding (including treasury stock)
As of March 31, 2021: | 69,597,500 | shares |
As of March 31, 2020: | 69,597,500 | shares |
b. Number of treasury stock | 8,412,575 | |
As of March 31, 2021: | shares | |
As of March 31, 2020: | 8,427,105 | shares |
c. Average number of shares issued and outstanding
As of March 31, 2021: | 61,181,989 | shares |
As of March 31, 2020: | 71,118,016 | shares |
(Reference) Non-consolidated results
1. Non-consolidated results for the fiscal year (From April 1, 2020, to March 31, 2021)
(1) Non-consolidated operating results
(Percentage figures denote year-over-year changes.)
Net sales | Operating income | Recurring income | Net income | |||||
Millions of yen | Millions of yen | Millions of yen | Millions of yen | |||||
Year ended March 31, 2021 | 54,666 | (19.5%) | 5,149 | (26.4%) | 8,336 | (5.4%) | 7,023 | (15.1%) |
Year ended March 31, 2020 | 67,913 | (15.9%) | 6,996 | (65.8%) | 8,813 | (61.7%) | 8,274 | (43.6%) |
Net income | Fully diluted net | |
per share | income per share | |
Yen | Yen | |
Year ended March 31, 2021 | 114.79 | 113.69 |
Year ended March 31, 2020 | 116.35 | 109.47 |
(2) Non-consolidated financial position
Total assets | Net assets | Capital adequacy | Net assets | |||
ratio | per share | |||||
Millions of yen | Millions of yen | % | Yen | |||
As of March 31, 2021 | 277,242 | 253,851 | 90.9 | 4,120.05 | ||
As of March 31, 2020 | 308,516 | 253,175 | 81.6 | 4,113.10 | ||
(reference) Shareholders' Equity | As of March 31, 2021 | ¥252,085 million | As of March 31, 2020 | ¥251,600 million |
* This document is not subject to audit procedures
* Disclaimer regarding Forward-looking Statements
The statements concerning future performance that are presented in this document are based on judgments using information available to the Company and which are deemed reasonable as of the release date of this material, and they are not intended to assure the achievement of such forecasts presented herein. Actual results may differ due to various factors. For information regarding performance forecasts, please refer to "1. Overview of business results etc. (4) Future outlook" in the accompanying material.
English translation of "KESSAN TANSHIN" originally issued in Japanese language | - 2 - |
SANKYO CO., LTD. (TSE #6417) Results for FY2021
1. Overview of business results etc.
(1) Overview of business results, etc. for the fiscal year under review
During the fiscal year ended March 31, 2021, it is unclear when the COVID-19 will be contained and there are also signs of a new surge in infection. As there are concerns over prolonged effects on the Japanese economy, future prospects remain unclear.
While the due date for removal of machines compliant with the former regulations in line with the amendment of the Pachinko and Pachislot Machines Regulations is approaching, the pachinko and pachislot industry faced a challenging market environment, such as temporary closure of pachinko parlors nationwide, low machine utilization at pachinko parlors, and temporary stalling of replacement with new machines under the first declaration of a state of emergency issued in April 2020. Following the lifting of the state of emergency in late May 2020, machine utilization at pachinko parlors and sales volume of pachinko and pachislot manufacturers showed signs of recovery. However, as a state of emergency covering the Tokyo Metropolitan area and major cities nationwide was declared again in early 2021, machine utilization at pachinko parlors and the market for new pachinko and pachislot machines showed little growth.
In these circumstances, the Group released nine pachinko titles and two pachislot titles. Although fewer titles were introduced than in a typical year because the Group minimized the number of titles for launch in light of an assessment of the market trend during the COVID-19 pandemic, the Group introduced diverse products to stimulate demand, including models equipped with "Yu-Time," which delivers new gaming performance, and drum-type models and dot-type models, which are not equipped with LCD screens.
As a result, net sales were ¥58.1 billion, a decrease of 25.9% year on year. Operating income was ¥6.5 billion, a decrease of 47.5%, and recurring income was ¥7.4 billion, a decrease of 44.4%. Profit attributable to owners of parent was ¥5.7 billion, a decrease of 55.9%.
Results of segments are presented below:
Pachinko Machines Business
Regarding the pachinko machines business, the Group released a grand total of 9 pachinko titles (excluding reuse models). For the SANKYO brand, major titles released included Fever Shinkagetsu 2 Yozakura ver. (introduced in April 2020), which equipped with "Yu-Time," in the first in the industry, Fever Symphogear 2 (introduced in April 2020), the successor to Fever Symphogear, which became an unusually long-running hit product in recent years and Fever THE iDOLM@STER MILLION LIVE! (introduced in February 2021), which tied up with the popular game that cultivates pop idols. For the Bisty brand, major titles released included CODE GEASS Lelouch of the Rebellion (introduced in January 2021). For the JB brand, major titles released included Fever Queen Ⅱ (introduced in October 2020) and PATRUSH V (introduced in March 2021).
As a result, segment sales amounted to ¥52.3 billion, a decrease of 13.6% compared with the same period of the previous year, and operating income was ¥12.9 billion, a decrease of 12.8%. Sales of pachinko machines amounted to 126,000 units.
Pachislot Machines Business
Regarding the pachislot machines business, two titles released included Pachislot for CHAR AZNABLE -REDCOMET's Counterattack- (introduced in August 2020) and Pachislot THE iDOLM@STER MILLION LIVE! (introduced in March 2021) under the Bisty brand.
The Group released only two titles, because the Group postponed the roll out of one title under the SANKYO brand, which was initially scheduled for introduction in the fourth quarter, until the next fiscal year.
As a result, segment sales amounted to ¥3.0 billion, a decrease of 73.6% compared with the same period of the previous year, and operating loss was ¥1.8 billion, compared with operating income of ¥2.4 billion in the same period of the previous fiscal year. Sales of pachislot machines amounted to 7,000 units.
Ball Bearing Supply Systems Business
Sales of the ball bearing supply systems business were ¥2.5 billion, a decrease of 57.1% year on year. An operating loss of ¥89 million was recorded compared with operating income of ¥300 million for the previous year.
Other Businesses
Sales of other businesses were ¥200 million, a decrease of 53.0% year on year. An operating income of ¥26 million was recorded compared with operating loss of ¥100 million for the previous year.
(2) Overview of financial position for the fiscal year under review
Total assets at the end of the fiscal year ended March 31, 2021 amounted to ¥292.1 billion, having decreased ¥33.1 billion compared with the figure at the previous fiscal year-end. This decrease was mainly attributable to a ¥33.9 billion decrease in cash and deposits, a ¥5.8 billion decrease in notes and accounts receivable-trade, a ¥4.9 billion decrease in accounts receivable for provision of parts and materials for value, and a ¥2.3 billion decrease in deferred tax assets, despite a ¥15.0 billion increase in marketable securities.
English translation of "KESSAN TANSHIN" originally issued in Japanese language | - 3 - |
SANKYO CO., LTD. (TSE #6417) Results for FY2021
Total liabilities amounted to ¥23.2 billion, having decreased ¥32.4 billion compared with the figure at the previous fiscal year-end. This decrease was mainly attributable to a ¥20.0 billion decrease in current portion of bonds with subscription rights to shares, a ¥10.1 billion decrease in notes and accounts payable-trade, and a ¥2.8 billion decrease in electronically recorded obligations-operating.
Net assets decreased ¥600 million compared with the figure at the previous fiscal year-end. This decrease was mainly attributable to cash dividends paid amounting to ¥9.1 billion, despite recording of profit attributable to owners of parent amounting to ¥5.7 billion, and a ¥2.5 billion increase in net unrealized gain on other securities. As a result, net assets amounted to ¥268.8 billion and the shareholders' equity ratio increased 9.0 percentage points to 91.4%.
(3) Overview of cash flows for the fiscal year under review
Cash and cash equivalents (hereinafter "cash") at the fiscal year-end were ¥203.3 billion, having increased ¥11.0 billion from the previous fiscal year-end.
Net cash provided by operating activities decreased ¥8.4 billion from the previous fiscal year-end to ¥10.5 billion. Principal cash inflow items were income before income taxes amounting to ¥7.7 billion, a ¥5.8 billion decrease in notes and accounts receivable-trade, a ¥4.9 billion decrease in accounts receivable for provision of parts and materials for value, depreciation and amortization amounting to ¥2.3 billion, income taxes refund amounting to 1.5 billion, and a ¥1.5 billion decrease in inventories. Principal cash outflow items were a ¥12.9 billion decrease in notes and accounts payable-trade and income taxes paid amounting to ¥1.0 billion.
Net cash provided by investing activities increased ¥51.3 billion from the previous fiscal year-end to ¥29.6 billion. Principal cash inflow items were proceeds from redemption of marketable securities amounting to ¥100.0 billion, and proceeds from withdrawal of time deposits amounting to ¥5.5 billion. Principal cash outflow items were payment for purchase of marketable securities amounting to ¥70.0 billion, and payment into time deposits amounting to ¥5.5 billion.
Cash flows from financing activities increased ¥50.0 billion from the figure at the previous fiscal year-end and, as a result, net cash used in financing activities amounted to ¥29.1 billion. Principal cash outflow items were redemption of bonds with subscription rights to shares amounting to 20.0 billion, and cash dividends paid amounting to ¥9.1 billion.
For fiscal 2022, the Company forecasts an increase in net cash provided by operating activities of ¥15.0 billion, a decrease in net cash used in investing activities of ¥3.0 billion attributable to capital investment, and a decrease in net cash used in financing activities of ¥8.0 billion attributable to payment of cash dividends.
As a result, the Company forecasts an increase of ¥4.0 billion in the cash balance at the end of fiscal 2022 compared to the end of fiscal 2021.
(reference) Change in cash flow indicators | |||||
March 31, 2018 | March 31, 2019 | March 31, 2020 | March 31, 2021 | ||
Shareholders' equity ratio (%) | 84.8 | 84.1 | 82.4 | 91.4 | |
Shareholders' equity ratio at market value (%) | 76.8 | 85.7 | 59.2 | 61.4 | |
Ratio of interest-bearing debt to cash flows (%) | 0.1 | 0.1 | - | - | |
Notes: | Shareholders' equity ratio: Shareholders' equity / Total assets | ||||
Shareholders' equity ratio at market value: Market capitalization / Total assets | |||||
Ratio of interest-bearing debt to cash flows: Interest-bearing debt / Cash flows | |||||
Interest coverage ratio: Cash flows / Interest expenses | |||||
Notes: |
- All indices are calculated using consolidated financial figures.
- Market capitalization is calculated using the number of shares issued and outstanding excluding treasury stock.
- Cash flows are operating cash flows.
- Interest-bearingdebt comprises all interest-bearing liabilities recorded in the consolidated balance sheets.
- Figures are rounded up or down to the nearest single decimal place.
- Future outlook
Regarding the next fiscal year ending March 31, 2022, there had been expectations of an upturn in the pachinko and pachislot machines market reflecting rising demand for replacement with machines compliant with the new regulations, manufacturers' accumulated knowhow on development of machines compliant with the new regulations, and diversification of gaming performance of pachinko and pachislot machines following the revision of internal regulations, etc. However, in view of the impact of the COVID-19 pandemic, improvement of the machine utilization at pachinko parlors has stalled and some parlor operators may close their parlors and reduce the numbers of pachinko and pachislot machines installed before completion of the transition to
English translation of "KESSAN TANSHIN" originally issued in Japanese language | - 4 - |
SANKYO CO., LTD. (TSE #6417) Results for FY2021
machines compliant with the new regulations. Thus, competition in a challenging business environment is expected to continue. The Group intends to respond to replacement demand and contribute to machine utilization at pachinko parlors by offering pachinko machines that strongly appeal to players, such as sequels to series with good track records and models involving tie-ups with new licensors. Whereas the Group released only two pachislot titles in the fiscal year ended March 31, 2021, the Group intends to release four titles with the aim of increasing sales and the Group's market share despite the challenging environment. The Group's plan calls for sales volumes for the fiscal year ending March 31, 2022, of 154,000 pachinko machines and 30,000 pachislot machines.
The consolidated business results forecast for the fiscal year ending March 31, 2022, are as follows:
Forecast | Year-on-year change | FY 2021 results | ||||
Net sales | ¥73.0 | billion | 25.6% | increase | ¥58.1 | billion |
Operating income | ¥8.9 | billion | 35.1% | increase | ¥6.5 | billion |
Recurring income | ¥9.6 | billion | 28.2% | increase | ¥7.4 | billion |
profit attributable to owners of parent | ¥6.6 | billion | 14.8% | increase | ¥5.7 | billion |
*Caution regarding Forward-looking Statements
The forecasts and other forward-looking statements contained in this report are based on information currently available to the Company and on certain assumptions deemed rational. The company does not guarantee their realization. Actual results, performance or achievements may differ materially from those expressed in forward-looking statements owing to various factors.
(5) Basic policy on profit sharing and cash dividends for fiscal 2021 and fiscal 2022
The Company regards the return of profits to shareholders as one of the most important management priorities. The Company's dividend policy is to continue stable dividend payments, taking into consideration financial results, the financial position, the payout ratio, and other factors comprehensively.
The Company plans to pay a dividend of ¥150 per share (including a ¥75 interim dividend, a consolidated payout ratio of 159.6%) for fiscal 2021. Regrettably, for the fiscal year ending March 31, 2022, the Company plans to pay a dividend of ¥100 per share (including a ¥50 interim dividend, a consolidated payout ratio of 92.7%).
In a challenging market environment where both the number of pachinko parlors and the player population have been trending downward, the Company's consolidated dividend payout ratio has intermittently exceeded 100% since the fiscal year ended March 31, 2013. Moreover, amid sluggish market conditions, the COVID-19 pandemic was an additional blow and it is difficult to predict the outlook of the industry and when the market will clearly bottom out. In light of these circumstances, we will review the dividend level with a view to maintaining the Company's sound financial structure. At the same time, we will endeavor to restore the profit level by seizing opportunities, including the completion of the transition to machines compliant with the new regulations and the launch of a new generation of pachinko and pachislot machines, such as pachinko machines with digital payout and token-less pachislot machines.
Considering that the Company's dividend will decrease for the first time (excluding the decrease of the commemorative dividend) since the Company's listing, at a meeting of the board of directors of the Company held today, it was resolved to reduce directors' and officers' compensation for 12 months in order to clarify management's responsibilities and to strive for a recovery of performance from in the future.
The Company will effectively utilize retained earnings, such as for investment to facilitate vitalization of the industry and for investment that contributes to the strengthening of product capabilities to ensure competitiveness is maintained in the persistently challenging pachinko and pachislot industry, with a view to enhancing corporate value.
English translation of "KESSAN TANSHIN" originally issued in Japanese language | - 5 - |
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Sankyo Co. Ltd. published this content on 13 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 May 2021 18:07:03 UTC.