Sanrio : Summary of Financial Results for the Fiscal Year Ended March 31,2021(FY2020)

May 14, 2021

Summary of Financial Results for the Fiscal Year Ended March 31, 2021 (FY2020) [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 Annual General Meeting of Shareholders: June 24, 2021

Scheduled date of filing of Annual Securities Report: June 25, 2021

Starting date of dividend payment: -

Preparation of supplementary materials for financial results: Yes

Holding of financial results meeting: Yes (for institutional investors and analysts)

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

1. Consolidated Financial Results for FY2020 (April 1, 2020 - March 31, 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	%
FY2020	41,053	(25.7)	(3,280)	-	(1,731)	-	(3,960)	-
FY2019	55,261	(6.5)	2,106	(56.0)	3,274	(43.9)	191	(95.1)

Note: Comprehensive income (millions of yen)	FY2020: (1,097) (-%)	FY2019: (1,521) (-%)
	Net Profit per	Fully-Diluted Net	Return on Equity	Return on Assets	Operating Profit
	Share	Profit per Share	(ROE)	(ROA)	to Sales
	Yen	Yen	%	%	%
FY2020	(47.93)	-	(9.5)	(2.0)	(8.0)
FY2019	2.26	-	0.4	3.5	3.8

Reference: Equity in earnings of unconsolidated subsidiaries (millions of yen)	FY2020: -	FY2019: -
(2) Consolidated financial position
		Total Assets	Net Assets	Equity Ratio		Net Assets per Share
		Millions of yen	Millions of yen	%		Yen
As of Mar. 31, 2021		85,986	37,414		43.4	462.91
As of Mar. 31, 2020		89,515	46,387		51.5	548.78

Reference: Shareholders' equity (millions of yen)	As of Mar 31, 2021: 37,283	As of Mar. 31, 2020: 46,060
(3) Consolidated cash flows
	Cash Flows from	Cash Flows from	Cash Flows from	Cash and Cash Equivalents
	Operating Activities	Investing Activities	Financing Activities	at End of Period
	Millions of yen	Millions of yen	Millions of yen	Millions of yen
FY2020	(2,287)	7,007		(862)	24,788
FY2019	834	(3,624)		(4,993)	21,011

2. Dividends

		Dividend per Share			Total	Dividend		Dividend on
							Payout Ratio		Equity
	1Q-end	2Q-end	3Q-end	Year-end	Total		Dividends
		(Consolidated)	(Consolidated)
	Yen	Yen	Yen	Yen	Yen	Millions of yen	%	%
FY2019	-	15.00	-	20.00	35.00	2,951	1,545.3	6.0
FY2020	-	0.00	-	0.00	0.00	-	-	-
FY2021 (forecast)	-	8.00	-	8.00	16.00			61.4

Note: Breakdown of the year-end dividend for FY2019:

Ordinary dividend: 15.00 yen; 60th anniversary commemorative dividend: 5.00 yen

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

* Notes

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

Newly added: -

Excluded: -

1. Changes in accounting policies and accounting-based estimates, and restatements
2. 1. Changes in accounting policies due to revisions in accounting standards, others: None
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting-based estimates: None
   4. Restatements: None
3. Number of outstanding shares (common stock)
4. 1. Number of outstanding shares at the end of the period (including treasury stock)

As of Mar. 31, 2021:	89,065,301 shares	As of Mar. 31, 2020:	89,065,301 shares
2) Number of shares of treasury stock at the end of the period
As of Mar. 31, 2021:	8,523,746 shares	As of Mar. 31, 2020:	5,131,983 shares
3) Average number of shares outstanding during the period
FY2020:	82,628,774 shares	FY2019:	84,640,664 shares

Reference: Unconsolidated Financial Results

1. Unconsolidated Financial Results for FY2020 (April 1, 2020 - March 31, 2021)

(1) Unconsolidated results of operations				(Percentages represent year-on-year changes)
	Sales		Operating Profit	Ordinary Profit	Net Profit
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
FY2020	30,563	(19.7)	(1,757)	-	7,339	161.3	6,542	276.3
FY2019	38,044	(6.8)	330	(85.9)	2,808	(41.3)	1,738	(51.5)
	Net Profit per Share	Fully-Diluted Net Profit per Share
	Yen			Yen
FY2020		79.18			-
FY2019		20.54			-
(2) Unconsolidated financial position
	Total Assets	Net Assets	Equity Ratio	Net Assets per Share
	Millions of yen	Millions of yen	%		Yen
As of Mar. 31, 2021		55,631		22,235			40.0		276.08
As of Mar. 31, 2020		50,412		22,223			44.1		264.78
Reference: Shareholders' equity (millions of yen)	As of Mar. 31, 2021:	22,235		As of Mar. 31, 2020:	22,223

Note 1: The current financial report is not subject to audit 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.

				Sanrio Company, Ltd. (8136) Financial Results for FY2020
Overview of Results of Operations, etc.
(1) Results of Operations
							(100 millions of yen)
	FY2020		Vs. Plan				Y-O-Y
		Increase/		Change	FY2019	Increase/	Change
	Results	*Final plan
	decrease		(%)	Results	decrease	(%)
Sales	410	402	8		2.1	552	(142)	(25.7)
Gross profit	252	248	4		2.0	350	(97)	(27.8)
Selling, general & administrative	285	288	(2)		(0.8)	329	(43)	(13.2)
expenses
Operating profit	(32)	(40)	7		-	21	(53)	-
Non-operating profit or expenses	15	9	6		72.1	11	3	32.5
Ordinary profit	(17)	(31)	13		-	32	(50)	-
Extraordinary gains or losses	(9)	(3)	(6)		-	(20)	10	-
Net profit before income taxes	(26)	(34)	7		-	12	(39)	-
Total income taxes	12	1	10		604.0	10	2	22.6
Net profit attributable to owners of	(39)	(36)	(3)		-	1	(41)	-
parent
Gross margin	61.6%	61.7%	(0.1)%		-	63.4%	(1.8)%	-
Operating margin	(8.0)%	(10.0)%	2.0%		-	3.8%	(11.8)%	-
Ordinary margin	(4.2)%	(7.7)%	3.5%		-	5.9%	(10.1)%	-

*Since the initial forecast has been revised, the table above shows comparisons with the final plan.

During the fiscal year under review, the economy suffered a major setback due to factors including economic stagnation and the loss of demand from tourists visiting from abroad caused by the spread of COVID-19. Despite the gradual resumption of economic activities in Japan and signs of moderate recovery from the third quarter onward, the outlook remains uncertain due to weakening consumption accompanying the spread of the pandemic. Sanrio 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.

In Japan, the Company managed to increase sales amid the COVID-19 pandemic in the e-commerce sector, for hygiene-related products such as masks and disinfectant sprays, and for products targeting students and adults such as the Enjoy Idol series. However, this was not enough to fully compensate for the decline in gift sales due to self-restraint in events and sales promotion activities, loss of demand from tourists visiting from abroad, and declining consumer confidence. The theme park business continued to face difficulties even after reopening as admission restrictions led to a sharp drop in visitor numbers; however, the Company is focusing on initiatives such as launching an e-commerce website and other online businesses.

Overseas, as in Japan, the spread of COVID-19 had a huge impact, and product promotion and event and other activities still cannot be implemented. Moreover, despite double-digit growth in the North American e-commerce business, a series of school closures due to lockdowns in Europe and other countries led to a drop in licensing sales, especially those related to school children.

As a result of these factors, sales fell 25.7% year-on-year to 41.0 billion yen, and operating loss was 3.2 billion yen (profit of 2.1 billion yen in the previous fiscal year). Ordinary loss was 1.7 billion yen (profit of 3.2 billion yen in the previous fiscal year) due to accounting interest income and gain on investments in partnership as non-operating profit. Net loss attributable to owners of parent was 3.9 billion yen (profit of 0.1 billion yen in the previous fiscal year) after accounting for extraordinary gains including 1.0 billion yen from subsidies for employment adjustment; extraordinary losses including 1.9 billion yen from the temporary closure of stores and theme parks to prevent the spread of COVID-19; total income taxes of 1.2 billion yen.

Since the accounting period for all overseas consolidated subsidiaries runs from January to December, the fiscal year under review for these subsidiaries covers the period from January to December 2020.

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					Sanrio Company, Ltd. (8136) Financial Results for FY2020
Reportable Segment							(100 millions of yen)
			Sales		Segment profit (operating profit)
		FY2019	FY2020	Increase/	Change	FY2019	FY2020		Increase/	Change
		decrease	(%)		decrease	(%)
	Product sales/others	339	236	(102)	(30.2)
Japan	Royalties	91	79	(12)	(13.6)	17	(29)		(46)	-
	Total	430	315	(115)	(26.7)
	Product sales/others	0	0	0	340.8
Europe	Royalties	14	11	(2)	(18.7)	(5)	(3)		2	-
	Total	14	12	(2)	(17.6)
North	Product sales/others	9	10	1	13.1
Royalties	16	10	(5)	(36.3)	(11)	(11)		(0)	-
America
Total	26	21	(4)	(18.1)
Latin	Product sales/others	0	0	0	47.5
Royalties	4	2	(2)	(40.8)	0	0		(0)	(62.2)
America
Total	5	3	(1)	(39.4)
	Product sales/others	11	5	(5)	(50.5)
Asia	Royalties	64	52	(12)	(18.6)	28	19		(9)	(31.9)
	Total	76	58	(17)	(23.4)
Adjustment		-	-	-	-	(8)	(8)		(0)	-
	Product sales/others	360	253	(106)	(29.7)
Consolidated	Royalties	192	157	(35)	(18.3)	21	(32)	(53)	-
	Total	552	410	(142)	(25.7)

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.

Reference: Overseas sales and profits for the past three years by area				(Millions of yen)
				Sales to customers			Operating profit
Areas	FY2018	FY2019		FY2020		FY2018	FY2019		FY2020
Change	Change	Change	Change
					(%)		(%)			(%)		(%)
		Germany	1,366	1,063	(22.2)	857	(19.4)	(192)	(439)	-	(174)	-
Europe		UK	397	396	(0.3)	346	(12.7)	(206)	(113)	-	(130)	-
		Subtotal	1,764	1,459	(17.3)	1,203	(17.6)	(398)	(553)	-	(305)	-
North		USA	2,661	2,607	(2.0)	2,136	(18.1)	(1,082)	(1,126)	-	(1,167)	-
America
Latin		Brazil/Chile	561	504	(10.1)	305	(39.4)	16	19	14.0	7	(62.2)
America
		Hong Kong	2,952	2,531	(14.3)	1,767	(30.2)	1,173	874	(25.5)	470	(46.2)
		Taiwan	1,356	1,087	(19.9)	1,019	(6.3)	444	371	(16.4)	306	(17.5)
Asia		South Korea	824	617	(25.1)	457	(25.9)	167	71	(57.3)	19	(72.1)
		China	3,809	3,369	(11.6)	2,580	(23.4)	1,765	1,560	(11.6)	1,162	(25.5)
		Subtotal	8,943	7,605	(15.0)	5,825	(23.4)	3,551	2,878	(18.9)	1,959	(31.9)
	Total	13,930	12,177	(12.6)	9,470	(22.2)	2,087	1,217	(41.7)	493	(59.5)

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Sanrio Company, Ltd. (8136) Financial Results for FY2020

(2) Financial Position

					(100 millions of yen)
	As of Mar. 31, 2020	As of Mar. 31, 2021	Increase/decrease	As of Sep. 30, 2020
Assets	895	859		(35)	954
Liabilities	431	485		54	542
(Interest-bearing debt)	201	278		76	329
Net assets	463	374		(89)	412
Equity ratio	51.5%	43.4%		(8.1) pt	43.0%

* Interest-bearing debt excludes lease obligations.

(3) Cash Flows

				(100 millions of yen)
	FY2019		FY2020		Increase/decrease
Cash flows from operating activities		8		(22)	(31)
Cash flows from investing activities		(36)		70	106
Cash flows from financing activities		(49)		(8)	41
Effect of exchange rate changes on cash and cash equivalents		(4)		(0)	3
Increase (decrease) in cash and cash equivalents		(82)		37	120
Cash and cash equivalents at beginning of year		292		210	(82)
Cash and cash equivalents at end of year		210		247	37

(4) Outlook

Regarding the outlook for the future, the COVID-19 situation has currently reached the point where a third state of emergency has been declared due to the spread of mutated strains and other factors, creating a situation where the timescale for a complete resolution cannot be predicted. However, we believe that the start of vaccinations will gradually bring about an end to the situation, and accordingly we are disclosing our consolidated business forecast for the fiscal year ending March 31, 2022, based on the assumption that the domestic economy will be on a recovery track.

(5) Medium-term Management Plan

The Company has formulated a three-yearmedium-term management plan concluding in the fiscal year ending March 31, 2024, which will be announced on TDnet and the Company's website on Tuesday, May 25, 2021. The three pillars of this plan are organizational climate reform, initiation and fulfillment of domestic and overseas structural reforms, and sowing the seeds for re-growth strategies and growth markets. We intend to fulfill this plan through radically restructuring our organization.

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