Sankyo : Consolidated Financial Statements for the First Nine Months of FY2022

Consolidated Financial Statements for the First Nine Months of FY2022

April 1, 2021, to December 31, 2021	(The Year Ending March 31, 2022)
	February 8, 2022

SANKYO CO., LTD.

https://www.sankyo-fever.co.jp/	Representative:	Akihiko Ishihara, President & COO
Shares listed:	Tokyo (1st Section)	Contact:	Yoko Oshima, Senior Executive Operating Officer
Code number:	6417	Planned Date for Submittal of the Financial Statements Report:	February 10, 2022
Telephone:	[phone]	Planned Date for Start of Dividend Payment:	-
		Supplementary materials for the quarterly financial statements:	Yes
		Presentation to explain for the quarterly financial statements:	No

(Figures less than 1 million yen have been omitted.)

1. Consolidated results for the first nine months of FY2022 (From April 1, 2021, to December 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
1st nine months of FY2022	70,344	71.6%		20,033	371.0%		20,851	311.9%		16,949	313.0%
1st nine months of FY2021	41,000	(33.6%)		4,253	(59.7%)		5,061	(55.5%)		4,104	(68.3%)
(note) Comprehensive income	1st nine months of FY2022	¥16,651 million [174.2%]	1st nine months of FY2021	¥6,072 million [(56.4%)]

	Net income	Fully diluted net
	per share	income per share
	Yen	Yen
1st nine months of FY2022	277.42	274.76
1st nine months of FY2021	67.08	66.45

(2) Consolidated financial position

	Total assets	Net assets	Capital adequacy
	ratio
	Millions of yen	Millions of yen	%
As of December 31, 2021	317,466	273,296	85.6
As of March 31, 2021	292,104	268,887	91.4

(reference) Shareholders' Equity As of December 31, 2021 ¥271,695 million As of March 31, 2021 ¥267,121 million

2. Dividends

				Cash dividend per share
(Base date)		1st quarter	2nd quarter		3rd quarter		Year-end	Full Year
	Yen	Yen		Yen		Yen	Yen
Year ended March 31, 2021		-	75.00		-		75.00	150.00
Year ended March 31, 2022		-	50.00		-		-	-
Year ended March 31, 2022 (Forecast)	-	-		-		50.00	100.00

Note: Changes in the projected cash dividends in this quarter : No

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	Net income
	income	income	to owners of parent	per share
	Millions of yen	Millions of yen	Millions of yen	Millions of yen	Yen
Year ending	83,600	43.8%	20,500	211.2%	21,400	185.8%	17,200	199.2%	283.79
March 31, 2022

Note: Changes in the forecasts of conslidated Financial results in this quarter : Yes

English translation of "KESSAN TANSHIN" originally issued in Japanese language

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* Notes

1. Changes for important subsidiaries during the 1st Nine Months of FY2022:
2. Application of peculiar accounting methods:
3. Changes in accounting procedures

1. Related to accounting standard revisions etc.:
2. Other changes:
3. Changes in accounting estimates:
4. Retrospective restatements:

1. Outstanding shares (common shares)

1. No. of shares outstanding (including treasury stock) As of Dec. 31, 2021:

b. No. of treasury stock	As of Dec. 31, 2021:
c. Average number of shares issued and outstanding	1st 9M of FY2022:

* This quarterly report is not subject to quarterly review procedures.

Not applicable

Not applicable

Applicable

Not applicable

Not applicable

Not applicable

69,597,500	shares	As of March 31, 2021:
9,876,215	shares	As of March 31, 2021:
61,096,691	shares	1st 9M of FY2021:

69,597,500 shares

8,412,575 shares

61,180,978 shares

* 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.Qualitative Information and Financial Statements (3)Forecast of Consolidated Results and Other Forecast Information" in the accompanying material.

English translation of "KESSAN TANSHIN" originally issued in Japanese language

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SANKYO CO., LTD. (TSE #6417) Results for 1st Nine Months of FY2022

1.Qualitative Information and Financial Statements

(1)Operating Results

During the first nine months of the fiscal year ending March 31, 2022 (from April 1, 2021 to December 31, 2021), the Japanese economy showed signs of recovery as the number of new COVID-19 cases tended to decline, reflecting the increasing COVID-19 vaccination rate and preventive measures against infections. However, the outlook is unclear in view of the concern about a resurgence of COVID-19 cases heightened by the emergence of a new variant.

The pachinko and pachislot industry is confronted by a challenging business environment. For example, it is taking time for machine utilization at pachinko parlors to recover, partly due to the protracted pandemic, and, in addition, the supply of pachinko and pachislot machines has become unstable owing to the impacts of the worldwide shortages of semiconductors and other parts. However, supported by a certain level of replacement demand arising from the deadline of January 31, 2022 for removing machines compliant with the former regulations, the sales volumes of both pachinko and pachislot machines have been higher than the levels for the same period of the previous year when the impact of the COVID-19 pandemic was more tremendous.

During the first nine months of the current fiscal year, the Group released seven new pachinko titles (excluding reuse models), and two pachislot titles. Fever Mobile Suit Gundam Unicorn, a pachinko title introduced in August, has been a market leader as evidenced by its brisk machine utilization, and we have received additional orders. Amid difficulty in parts procurement, we made an all-out effort to secure parts for the additional production. As a result, the number of units of pachinko machines sold exceeded the forecast. NEON GENESIS EVANGELION -Roarfor tomorrow-, the 15th title of the series introduced in December, became a hit product with sales exceeding 40,000 units and the machine utilization following the introduction was also brisk. Thus, the Group's sales of pachinko machines were robust. Regarding pachislot machines, the Group introduced Pachislot Symphogear "Yuki no Uta", the Group's first #6.2 model, in December.

As a result, on a consolidated basis, net sales were ¥70.3 billion, an increase of 71.6% compared with the same period of the previous year, operating income was ¥20.0 billion, an increase of 371.0%, recurring income was ¥20.8 billion, an increase of 311.9%. Profit attributable to owners of parent amounted to ¥16.9 billion, an increase of 313.0%, partly owing to the recording of extraordinary gains on sales of investment securities.

Results of segments are presented below:

Pachinko Machines Business

Regarding the pachinko machines business, sales amounted to ¥61.7 billion, an increase of 66.7% compared with the same period of the previous year, and operating income amounted to ¥22.4 billion, an increase of 129.2%. Sales of pachinko machines amounted to 138,000 units compared with 86,000 units for the same period of the previous fiscal year.

Major titles released included Fever Mobile Suit Gundam Unicorn (introduced in August 2021) and Fever Macross Frontier 4 (introduced in October 2021) under the SANKYO brand, Fever Star Blazers: Space Battleship Yamato 2202 (introduced in July 2021) and NEON GENESIS EVANGELION -Roarfor tomorrow- (introduced in December 2021) under the Bisty brand, and J-RUSH5 (introduced in November 2021) under the JB brand.

Pachislot Machines Business

Regarding the pachislot machines business, sales amounted to ¥5.6 billion, an increase of 231.8% compared with the same period of the previous year, and operating income amounted to ¥0.5 billion, compared with operating loss of ¥2.1 billion in the same period of the previous fiscal year. Sales of pachislot machines amounted to 12,000 units compared with 4,000 units for the same period of the previous fiscal year.

Two titles released included Pachislot Macross DELTA (introduced in April 2021) and Pachislot Symphogear "Yuki no Uta" (introduced in December 2021) under the SANKYO brand.

Ball Bearing Supply Systems Business

Sales of the ball bearing supply systems business were ¥2.7 billion, an increase of 35.8% compared with the same period of the previous year, and operating income amounted to ¥89 million, compared with operating loss of ¥52 million in the same period of the previous fiscal year.

Other Businesses

Sales of other businesses were ¥0.1 billion, a decrease of 25.4% compared with the same period of the previous year, and operating income was ¥28 million, an increase of 34.5% compared with the same period of the previous year.

English translation of "KESSAN TANSHIN" originally issued in Japanese language

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SANKYO CO., LTD. (TSE #6417) Results for 1st Nine Months of FY2022

(2)Financial Position

Total assets at the end of the first nine months of the fiscal year ending March 31, 2022 amounted to ¥317.4 billion, having increased ¥25.3 billion compared with the figure at the previous fiscal year-end. This increase was mainly attributable to a ¥27.3 billion increase in notes and accounts receivable-trade, and contract assets, and a ¥6.1 billion increase in accounts receivable for provision of parts and materials for value (included in "Other" of Current assets), despite a ¥4.2 billion decrease in cash and deposits, a ¥1.9 billion decrease in deferred tax assets (included in "Other" of Investments and other assets), and a ¥1.8 billion decrease in investment securities.

Total liabilities amounted to ¥44.1 billion, having increased ¥20.9 billion compared with the figure at the previous fiscal year-end. This increase was mainly attributable to a ¥9.3 billion increase in notes and accounts payable-trade, a ¥4.3 billion increase in electronically recorded obligations-operating, a ¥3.9 billion increase in accounts payable (included in "Other" of Current liabilities), and a ¥2.8 billion increase in accrued income taxes.

Net assets increased ¥4.4 billion compared with the figure at the previous fiscal year-end. This increase was mainly attributable to recording of profit attributable to owners of parent amounting to ¥16.9 billion, despite recording of cash dividends paid amounting to ¥7.6 billion, purchase of treasury stock amounting to ¥4.7 billion, and a ¥0.2 billion decrease in net unrealized gain on other securities. As a result, net assets amounted to ¥273.2 billion and the shareholders' equity ratio decreased 5.8 percentage points to 85.6%.

(3)Forecast of Consolidated Results and Other Forecast Information

In view of the recent trend, the Company revised the forecast of consolidated financial results for the full year of fiscal 2022 that was announced on May 13, 2021. Forecast of the sales volumes of pachinko machines and pachislot machines for the full year of fiscal 2022 were revised from 154,000 units to 163,000 units and from 30,000 units to 22,000 units, respectively. For details, please refer to the Notice concerning Revision of the Forecast of the Financial Results for the Year Ending March 31, 2022 announced today.

English translation of "KESSAN TANSHIN" originally issued in Japanese language

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SANKYO CO., LTD. (TSE #6417) Results for 1st Nine Months of FY2022

2. Consolidated Financial Statements

(1) Consolidated Balance Sheets

(Figures less than 1 million yen have been omitted.)

				As of	As of
				March 31, 2021	Dec. 31, 2021
				Millions of yen	Millions of yen
	Assets:
		Current assets:
			Cash and deposits	88,872	84,616
			Notes and accounts receivable-trade	10,867	-
			Notes and accounts receivable-trad, and contract assets	-	38,213
			Marketable securities	134,999	134,999
			Merchandise and finished goods	7	65
			Work in process	102	-
			Raw materials and inventories	4,159	5,257
			Other	4,334	9,625
			Allowance for doubtful accounts	(0)	(2)
			Total current assets	243,343	272,777
		Fixed assets:
			Tangible fixed assets	26,556	26,402
			Intangible fixed assets
			Other	96	165
			Total Intangible fixed assets	96	165
			Investments and other assets:
			Investment securities	15,599	13,737
			Other	6,523	4,396
			Allowance for doubtful accounts	(14)	(13)
			Total investments and other assets	22,108	18,121
			Total fixed assets	48,761	44,688
		Total assets	292,104	317,466

English translation of "KESSAN TANSHIN" originally issued in Japanese language

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