Sankyo Co., Ltd. · TSE:6417

Sankyo — Q1 FY3/2022 Earnings Presentation

32 slides from Sankyo's earnings presentation, Aug 5, 2021

  1. Slide 1: Presentation on Business Results for the First Quarter of FY 3/2022

    Presentation on Business Results for the First Quarter of FY 3/2022 (April 1, 2021 to June 30, 2021) August 5, 2021 SANKYO CO., LTD. 1st Sec. of the TSE #6417

  2. Slide 2: Contents

    Contents  Overview of Financial Results ・・・・・・・・・・・・・・・・・・・・ P3 Overview and Forecasts of Business ・ ・・・ ・・・ ・・・ ・・・・ P11 ・ Initiatives of Pachinko and Pachislot Industry・ ・・・ ・・ P19 Appendix ・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・ P25 © 2021 SANKYO CO., LTD. 2

  3. Slide 3: Financial Highlights

    Financial Highlights  Progress is virtually in line with the plan despite great decreases in both net sales and profits compared with the same period of the previous year because of the absence of major titles.  The Group will proceed with preparations in anticipation of replacement demand, which

  4. Slide 4: Summary of Financial Results

    Summary of Financial Results  There has been no significant change in the trend of machine utilization, and the progress of COVID-19 vaccination is anticipated. Pachinko  The sales volume of pachinko machines is returning to normal as their gaming Pachislot performance is being enriched, with seve

  5. Slide 5: Summary of Financial Results

    Summary of Financial Results million yen FY 3/2021 1Q FY 3/2022 1Q YoY FY 3/2022 Forecast Net Sales 17,960 10,932 -7,028 -39.1% 73,000 Pachinko Machines Business 16,952 9,189 -7,763 -45.8% 56,700 Pachislot Machines Business 210 1,029 +819 +390.0% 11,500 Cost of Sales 8,809 4,779 -4,030 -45.7% 34,500

  6. Slide 6: Factors of Change in Consolidated Net Sales

    Factors of Change in Consolidated Net Sales Million yen Pachinko Machines Business 17,960 Ball Bearing Supply Other +819 Business Business ‐79 ‐7 10,932 ‐7,763 Pachislot Machines Business FY3/2021 1Q FY3/2022 1Q -7,028million yen（-39.1%） © 2021 SANKYO CO., LTD. 6

  7. Slide 7: Factors of Change in Consolidated Operating Income

    Factors of Change in Consolidated Operating Income Million yen 3,752 The gross profit of the pachinko machine sales decreases Other factors The gross profit +1,002 of the pachislot machine sales Advertising Sales R&D 768 increases expenses commission expenses increases decreases decreases +493 +301

  8. Slide 8: Costs and Expenses

    Costs and Expenses million yen FY 3/2021 1Q FY 3/2022 1Q YoY FY 3/2022 Forecast SG & A Expenses 5,399 5,385 -14 -0.3% 29,600 Advertising Expenses 122 571 +449 +368.0% 2,032 Sales Commission 292 285 -7 -2.4% 3,901 R&D Expenses 2,859 2,558 -301 -10.5% 14,859 Salaries & Wages 640 573 -67 -10.5% 2,785 D

  9. Slide 9: Summary of Balance Sheet

    Summary of Balance Sheet million yen As of 31-Mar-21 As of 30-Jun-21 YoY Factors of Change Total current assets 243,343 242,351 ‐992 Decrease in cash and deposits and notes and accounts Quick assets 234,738 227,982 ‐6,756 receivable‐trade, and contract assets Total fixed assets 48,761 49,442 +681 In

  10. Slide 10: Contents

    Contents Overview of Financial Results ・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・ P3  Overview and Forecasts of Business ・・・・・・・・・・・・・ P11 Initiatives of Pachinko and Pachislot Industry・ ・・・ ・・ P19 Appendix ・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・ P25 © 2021 SANKYO CO., LTD. 10

  11. Slide 11: Pachinko Machines Business

    Pachinko Machines Business Factors of Change in Net sales Data Million yen million yen FY 3/2021 1Q FY 3/2022 1Q YoY FY 3/2021 1st Quarter (Apr‐Jun) 16,952 Net Sales 16,952 9,189 -7,763 Sales volume of SANKYO-brand Operating Income 5,408 1,981 -3,427 and JB-brand pachinko machines ‐6,377 decreases.

  12. Slide 12: Pachinko Machines Business

    Pachinko Machines Business 1Q 1Q 2Q 3Q- Fever Star Blazers: Space New Title Fever Valvrave the Liberator 2 Battleship Yamato 2202 Fever Macross Frontier 4 xx 24 x9 Fever Powerful Fever Mobile Suit Gundam Unicorn x2 Fever Golgo13 Shippu CODE GEASS Lelouch of the Rebellion Reused Machine Gun ver. Ligh

  13. Slide 13: Pachislot Machines Business

    Pachislot Machines Business Factors of Change in Net sales Data Million yen million yen FY 3/2021 1Q FY 3/2022 1Q YoY 210 FY 3/2021 1st Quarter (Apr‐Jun) Net Sales 210 1,029 +819 Sales volume of SANKYO-brand pachislot machines increases. Operating Income (722) (338) +384 0 (* Sales of SANKYO-brand p

  14. Slide 14: Pachislot Machines Business

    Pachislot Machines Business 1Q 1Q 2Q- Pachislot Macross DELTA xx 24 New Title x4 x1 Sales of - units 2,367 units Unit FY 3/2022 Forecast Progress 2,367 units（7.9 %） 30,000 units © 2021 SANKYO CO., LTD. ※ Introduction of titles is in line with the current plan to date, but may be subject to changes.

  15. Slide 15: Pachinko Market

    Pachinko Market Sales Volume Sales volume forecast FY2022： 1,000 thousand units Thousand units (April 1, 2021 to March 31,2022) Total number 2,100 of units sold Approx. 290 thousand units YoY Approx. +203％ （2 titles sold 30,000 units or more. (April to June, 2021) (April to June)） 1,800  Total sale

  16. Slide 16: Pachislot Market

    Pachislot Market Sales Volume Sales volume forecast FY2022： 400 thousand units Thousand units (April 1, 2021 to March 31,2022) Total number 1,400 of units sold Approx. 90 thousand units YoY Approx. -20％ （0 titles sold 20,000 units or more. (April to June, 2021) 1,200 (April to June)） 1,000  Total s

  17. Slide 17: Initiatives of SANKYO in the Pachinko and Pachislot Machine Markets

    Initiatives of SANKYO in The Pachinko and Pachislot Machine Markets  The Group will capture parlor operatorsʼ demand for replacement with machines compliant with the new regulations, which should get into full swing from the second quarter onward.  Stimulate parlor operatorsʼ demand by offering di

  18. Slide 18: Contents

    Contents Overview of Financial Results ・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・ P3 Overview and Forecasts of Business ・ ・・・ ・・・ ・・・ ・・・・ P11 ・  Initiatives of Pachinko and Pachislot Industry・・・ P19 Appendix ・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・ P25 © 2021 SANKYO CO., LTD. 18

  19. Slide 19: Status of Install of the Machines with the former regulations

    Status of Install of the Machines with the former regulations Schedule of Removal of the Machines with the former regulations  Parlors are going to remove all the machines with the former regulations by January, 2022 in stages. Target： Pachinko：About 690 thousand units Pachislot： About 670 thousand

  20. Slide 20: Format Inspection

    Format Inspection  Pachinko：Although the pass rate of the last three months in format inspection has depressed, and manufacturers have been able to secure a definite number of pachinko titles for launch.  Pachislot：The format inspection pass rate remains low, and the supply of new models remains t

  21. Slide 21: Number of Parlors and Installed Machines

    Number of Parlors and installed Machines  Whereas the downward trend of the total number of pachinko parlors continues, business restructuring proceeded, such as a sharp increase in the number of M&A deals in fiscal 2020. Number of Parlors and machines installed （No. of Parlors） （thousand units） 18

  22. Slide 22: Amendment of internal regulations after the 2018 machine regulations

    Regarding the amendment of internal regulations after the amendment machine regulations in 2018 2018 2020 Aug. Advent of pachinko machines with payout Change in the “Standards for Interpretation Jan. settings of Technical Standards” （Apply：January, 2020〜） Nov. Pachinko new internal regulations （Appl

  23. Slide 23: Resume of TV Pachinko and Pachislot Machine Commercials

    Resume of TV Pachinko and Pachislot machine Commercials  TV commercial for “Fever Mobile Suit Gundam Unicorn” have been executed.  TV commercials are helping increase playersʼ recognition and parlor operatorsʼ willingness to purchase products.  Execution of TV commercials for pachinko/pachislot m

  24. Slide 24: Contents

    Contents Overview of Financial Results ・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・ P3 Overview and Forecasts of Business ・ ・・・ ・・・ ・・・ ・・・・ P11 ・ Initiatives of Pachinko and Pachislot Industry・ ・・・ ・・ P19  Appendix ・・・・・・・・・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・ P25 © 2021 SANKYO CO., LTD. 24

  25. Slide 25: Business Results for the First Quarter of FY 3/2022

    Business Results for the First Quarter of FY 3/2022 FY 3/2022 Forecast FY 3/2020 FY 3/2021 Consolidated:milion yen Q1 YoY Full Year Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Net Sales 10,932 -7,028 73,000 11,351 22,142 28,245 16,678 78,416 17,960 7,372 15,668 17,129 58,129 Pachinko 9,189 -7,763 56,700 7,064 20,

  26. Slide 26: Margin / Expenses etc.

    Margin / Expenses etc. GP Margin/OP Margin FY 3/2022 Forecast FY 3/2020 FY 3/2021 Consolidated Q1 YoY Full Year Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY GP Margin 56.3% +5.3pt 52.7% 53.5% 52.6% 55.3% 50.5% 53.2% 51.0% 46.0% 57.6% 53.4% 52.9% OP Margin 7.0% -13.9pt 12.2% (5.3%) 16.6% 26.5% 12.0% 16.0% 20.9% (36

  27. Slide 27: Pachinko Machines Business

    Pachinko Machines Business FY 3/2022 Forecast FY 3/2020 FY 3/2021 Consolidated:milion yen Q1 YoY Full Year Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Net Sales 9,189 -7,763 56,700 7,064 20,214 20,247 12,989 60,514 16,952 5,432 14,668 15,258 52,310 Operating Income 1,981 -3,427 10,900 (238) 5,832 6,144 3,066 14,8

  28. Slide 28: Pachislot Machines Business

    Pachislot Machines Business FY 3/2022 Forecast FY 3/2020 FY 3/2021 Consolidated:milion yen Q1 YoY Full Year Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Net Sales 1,029 +819 11,500 2,635 394 6,516 1,896 11,441 210 1,303 185 1,324 3,022 Operating Income (338) +384 2,000 718 (711) 2,394 48 2,449 (722) (597) (838) 26

  29. Slide 29: Financial Indicates

    Financial Indicates million yen FY 3/2015 FY 3/2016 FY 3/2017 FY 3/2018 FY 3/2019 FY 3/2020 FY 3/2021 FY 3/2022E Net Sales 146,579 137,130 81,455 86,220 88,558 78,416 58,129 73,000 Operating Income 13,233 18,826 5,059 10,181 21,286 12,551 6,587 8,900 Recurring Income 14,870 19,965 3,832 11,319 22,30

  30. Slide 30: Pachinko/Pachislot Machine Market

    Pachinko/Pachislot Machine Market Market size Situation of Parlors that Are Members of Zennichiyuren for recent a year 3,000 3,500 12,000 2,833 2,749 2,637 2,557 11,000 3,000 2,500 2,432 10,000 2,500 2,266 2,261 2,254 2,246 2,244 2,245 2,232 2,000 2,219 2,187 2,179 2,172 2,160 9,000 1,691 1,687 1,66

  31. Slide 31: Others

    Others Number of Titles Sold (All Manufacturers) Compliance with Format Inspection Pachinko machines 2016 2017 2018 2019 2020 2021J‐J 2016 17,046 Sales per title (Left) 93 Number of titles Applicant 864 875 711 945 912 510 2017 15,793 90 Pass 396 361 336 430 295 175 Fail 458 463 333 560 499 298 2018

  32. Slide 32: Contact Us

    Contact Us Investor Relations Office 【Notes of forecasts】 The Company's plans, strategies and forecasts, except historical facts, contained in this document may be subject Corporate Planning Division to change due to factors of risk and uncertainty. Therefore, the Company does not guarantee their at

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