Sanrio : Summary of Financial Results for the First Quarter of Fiscal Year Ending 03/2022

August 4, 2021

Summary of Financial Results for the First Quarter of Fiscal Year Ending March 31, 2022 (FY2021)

(Three Months Ended June 30, 2021) [Japanese GAAP]

Company name:	Sanrio Company, Ltd.	Listed Stock Exchange: TSE 1st Section
Stock code:	8136	URL: https://www.sanrio.co.jp/english/corporate/ir/
Representative:	Tomokuni Tsuji, President and Chief Executive Officer
Inquiries:	Jiro Kishimura, Managing Director	TEL: [phone]

Scheduled date of filing of Quarterly Report: August 13, 2021

Starting date of dividend payment: -

Preparation of supplementary materials for quarterly financial results: Yes

Holding of quarterly financial results meeting: None

(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Quarter of FY2021 (April 1, 2021 - June 30, 2021)

(1) Consolidated results of operations				(Percentages represent year-on-year changes)
	Sales		Operating Profit	Ordinary Profit		Net Profit Attributable
			to Owners of Parent
	Millions of yen	%	Millions of yen	%	Millions of yen	%		Millions of yen	%
Three months ended Jun. 30, 2021
10,802	48.2	(59)	-	102		-	2,470	-
Three months ended Jun. 30, 2020	7,289	(45.5)	(1,177)	-	(999)		-	(858)	-

Note: Comprehensive income (millions of yen)	Three months ended Jun. 30, 2021:	3,579	(-%)
		Three months ended Jun. 30, 2020: (1,345)	(-%)
	Net Profit per Share	Fully-Diluted Net
	Profit per Share
	Yen			Yen
Three months ended Jun. 30, 2021		30.67	-
Three months ended Jun. 30, 2020		(10.23)	-
(2) Consolidated financial position
	Total Assets		Net Assets		Equity Ratio
	Millions of yen		Millions of yen		%
As of Jun. 30, 2021			87,164			40,876	46.7
As of Mar. 31, 2021			85,040			37,285	43.7
Reference: Shareholders' equity (millions of yen)		As of Jun. 30, 2021: 40,733		As of Mar. 31, 2021: 37,155

2. Dividends

						Dividend per Share
		1Q-end			2Q-end	3Q-end	Year-end	Total
		Yen			Yen	Yen	Yen	Yen
FY2020			-		0.00	-	0.00	0.00
FY2021	-
FY2021 (forecast)				8.00	-	8.00	16.00

Note: Revisions to the most recently announced dividend forecast: None

3. Consolidated Forecast for FY2021 (April 1, 2021 - March 31, 2022)

(Percentages represent year-on-year changes)

	Sales		Operating Profit		Ordinary Profit	Net Profit Attributable	Net Profit per
			to Owners of Parent	Share
	Millions of yen	%	Millions of yen	%		Millions of yen	%	Millions of yen	%	Yen
First half
23,000	34.7	(1,100)		-	(1,000)	-	1,900	-	23.59
Full year	49,100	19.6	(700)		-	(400)	-	2,100	-	26.07

Note: Revisions to the most recently announced consolidated forecasts: None

* Notes

(1) Changes in consolidated subsidiaries during the period (changes in scope of consolidation): None

Newly added: -

Excluded: -

1. Application of special accounting methods for presenting quarterly consolidated financial statements: None
2. Changes in accounting policies and accounting-based estimates, and restatements
3. 1. Changes in accounting policies due to revisions in accounting standards, others: Yes
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting-based estimates: None
   4. Restatements: None
4. Number of outstanding shares (common stock)
5. 1. Number of outstanding shares at the end of the period (including treasury stock)

As of Jun. 30, 2021:	89,065,301 shares	As of Mar. 31, 2021:	89,065,301 shares
2) Number of shares of treasury stock at the end of the period
As of Jun. 30, 2021:	8,523,746 shares	As of Mar. 31, 2021:	8,523,746 shares
3) Average number of shares outstanding during the period
Three months ended Jun. 30, 2021:	80,541,555 shares	Three months ended Jun. 30, 2020:	83,933,318 shares

Note 1: The current quarterly financial report is not subject to quarterly review by certified public accountants or auditing firms.

Note 2: Cautionary statement with respect to forward-looking statements and other special items

Forecasts regarding future performance in these materials are based on assumptions judged to be valid and information currently available to the Company. These materials are not promises by the Company regarding future performance. Actual results may differ significantly from these forecasts for a number of factors. Please refer to "Qualitative Information on Quarterly Consolidated Financial Performance, Explanation of Consolidated Forecasts and Other Forward-looking Statements" of the attachments for forecast assumptions and notes of caution for usage.

Sanrio Company, Ltd. (8136) Financial Results for the First Quarter of FY2021

Qualitative Information on Quarterly Consolidated Financial Performance

Explanation of Results of Operations

During the first quarter of the fiscal year under review, the impact from the spread of COVID-19 continued to restrict Japan's economic activity, causing the outlook to remain uncertain. The Company has continued to protect the health of our customers and employees and take measures to prevent the spread of infection while operating safe stores and facilities.

The Company announced on May 25, 2021 the three-yearmedium-term management plan "Creating and Challenging for our Future" concluding in the fiscal year ending March 31, 2024. The three pillars of this plan are corporate culture reform, initiation and completion of domestic and overseas structural reforms, and planting the seeds for regrowth strategies and growth markets. We intend to fulfill this plan through radically restructuring our organization.

In Japan, the expansion of a state of emergency issued just before the Golden Week holidays to 10 prefectures had a major impact, including the closure of a number of stores. Within this situation, the Company also offered in-store voting for the Sanrio Character Ranking and the stores grew busy once more, focused on domestic customers. As in the previous fiscal year, sales grew in the e-commerce sector and also rose for hygiene-related products such as masks, loungewear to meet stay-home demand, and products using cooling materials, which became more popular as temperatures rose. Sanrio+, an application for Sanrio fan members launched in July 2020, has already been in operation for one year and the membership has surpassed 910,000 (as of July 1). Meanwhile, the theme park business continued to face difficulties due to a fall in visitor numbers caused by temporary closures and admission restrictions after reopening; however, the Company is continuing to focus on e-commerce business and digital distribution.

Overseas, economic activity resumed in areas where COVID-19 had been brought under control. Apparel licensee numbers increased in Europe, initiatives with toy manufacturers in North America grew steadily, and sales promotion campaigns began to resume in Asia.

As a result of these factors, sales rose 48.2 % year-on-year to 10.8 billion yen, and operating loss was 50 million yen (an improvement of 1.1 billion yen from the same period of the previous fiscal year). Ordinary profit was 0.1 billion yen (a loss of 0.9 billion yen in the same period of the previous fiscal year) due to accounting interest income and gain on investments in partnership as non-operating profit. Net profit attributable to owners of parent was 2.4 billion yen (a loss of 0.8 billion yen in the same period of the previous fiscal year) after accounting for extraordinary gains including 3.8 billion yen from gain on sales of fixed assets; extraordinary losses including 0.2 billion yen from the temporary closure of theme parks; and total income taxes of 1.2 billion yen.

Since the accounting period for all overseas consolidated subsidiaries runs from January to December, the first quarter under review for these subsidiaries covers the period from January to March 2021.

1

				Sanrio Company, Ltd. (8136) Financial Results for the First Quarter of FY2021
Reportable Segment							(100 millions of yen)
			Sales		Segment profit (operating profit)
	First three months of	FY2020	FY2021	Increase/	Change	FY2020	FY2021		Increase/	Change
	decrease	(%)		decrease	(%)
	Product sales/others	36	59	22	62.5
Japan	Royalties	16	20	3	23.3	(6)	1		7	-
	Total	53	80	26	50.1
	Product sales/others	(0)	0	0	-
Europe	Royalties	2	3	1	42.4	(2)	(0)		1	-
	Total	2	3	1	45.9
North	Product sales/others	1	2	1	127.0
Royalties	1	3	1	62.2	(3)	(1)		1	-
America
Total	3	5	2	87.4
Latin	Product sales/others	0	0	(0)	(63.0)
Royalties	0	0	(0)	(23.4)	0	0		0	74.7
America
Total	1	0	(0)	(25.1)
	Product sales/others	1	1	0	48.3
Asia	Royalties	11	15	4	35.8	4	6		1	45.9
	Total	12	17	4	37.0
Adjustment		-	-	-	-	(4)	(5)		(1)	-
	Product sales/others	39	64	25	64.2
Consolidated	Royalties	33	43	10	29.8	(11)	(0)	11	-
	Total	72	108	35	48.2

Note: Regional subsidiaries overseas pay the amount of royalties commensurate as the cost of sales while the Japanese parent company (the copyright holder) calculates this income as sales. Because consolidated transactions are eliminated, however, these are not included in Japan's sales figures stated above (although included in segment profit (operating profit)).

Further, the above sales figures are "sales to customers," and the inter-segment sales, which are not limited to the above-mentioned royalties, are eliminated as internal transaction sales.

Explanation of Consolidated Forecasts and Other Forward-looking Statements

Taking into consideration the impact of the spread of COVID-19 and the future progress of the medium-term management plan, the Company has not made changes to the consolidated earnings forecast announced on May 14, 2021.

Reference: Overseas Sales and Profits for the Past Three-month Periods by Area				(Millions of yen)
				Sales to customers			Operating profit
	Three months	Jun.	Jun.		Jun.		Jun.	Jun.			Jun.
		ended	Change	Change	Change		Change
Areas		2019	2020	2021	2019	2020		2021
		(%)	(%)	(%)		(%)
		Germany	324	160	(50.6)	228	42.5	(68)	(169)	-		(97)	-
Europe		UK	76	89	17.5	136	52.0	(36)	(50)	-		27	-
		Subtotal	400	249	(37.7)	364	45.9	(104)	(220)	-		(69)	-
North		USA	563	314	(44.2)	589	87.4	(213)	(355)	-		(175)	-
America
Latin		Brazil/Chile	205	103	(49.7)	77	(25.1)	39	4	(88.6)		7	74.7
America
		Hong Kong	495	433	(12.6)	369	(14.8)	160	134	(16.2)		117	(12.2)
		Taiwan	336	261	(22.2)	263	0.8	125	87	(30.0)		75	(13.8)
Asia		South Korea	204	135	(34.1)	108	(19.4)	36	14	(60.6)		5	(59.5)
		China	748	440	(41.2)	997	126.7	320	194	(39.4)		429	120.8
		Subtotal	1,785	1,270	(28.8)	1,740	37.0	642	430	(33.0)		628	45.9
	Total	2,955	1,938	(34.4)	2,771	43.0	363	(140)	-		391	-
						2

Sanrio Company, Ltd. (8136) Financial Results for the First Quarter of FY2021

Quarterly Consolidated Financial Statements and Notes

(1) Consolidated Balance Sheets

			(Millions of yen)
		FY2020	First quarter of FY2021
		(As of Mar. 31, 2021)	(As of Jun. 30, 2021)
Assets
Current assets
Cash and deposit	36,876	43,282
Trade notes and accounts receivable	5,269	-
Notes and accounts receivable-trade and contract assets	-	4,784
Merchandise and finished goods	4,383	4,104
Work in process	10	29
Raw materials and supplies	213	418
Other accounts receivable	1,631	1,324
Other	637	720
Allowance for doubtful accounts		(85)	(109)
Total current assets	48,937	54,554
Fixed assets
Tangible fixed assets
Buildings and structures, net	4,631	3,929
Land	7,831	6,193
Other, net		3,636	3,582
Total tangible fixed assets		16,098	13,706
Intangible fixed assets	2,216	2,311
Investments and other assets
Investment securities	11,649	10,777
Deferred tax assets	364	25
Other	6,206	6,266
Allowance for doubtful accounts		(454)	(497)
Total investments and other assets		17,766	16,572
Total fixed assets		36,081	32,590
Deferred assets		21	18
Total assets	85,040	87,164
Liabilities
Current liabilities
Trade notes and accounts payable	3,180	3,182
Short-term borrowings	17,030	13,473
Accrued income taxes	486	1,141
Allowance for bonuses	421	662
Reserve for adjustment of returned goods	8	-
Provision for shareholder benefit program	38	33
Provision for point card certificates	118	12
Other		8,051	8,040
Total current liabilities	29,336	26,546
Long-term liabilities
Corporate bonds	935	795
Long-term borrowings	9,382	11,134
Retirement benefit liability	3,091	2,899
Other		5,008	4,913
Total long-term liabilities		18,417	19,742
Total liabilities		47,754	46,288
	3