Slide 1: Presentation on CLSA Japan Forum 2015
Presentation on CLSA Japan p Forum 2015 1st Sec. of the TSE #6417 Current Price: Y4,420 (February 6, 2015) Shares Outstanding: 9797.5 5 million Market Cap: Y431,380 million Kimihisa Tsutsui President & COO The Company's plans, strategies and forecasts, except historical facts, contained in this docu
Slide 2: Company Overview
OMA -TYI1X Company Overview
Slide 3: Company Overview
Company Overview SANKYO CO., CO LTD. LTD 1st Sec. of the TSE #6417 Development, De elopment Manufacture, Man fact re and Sales of Pachinko and Pachislot Machines 2
Slide 4: Brands Structure
3 Brands Structure SANKYO Pachinko and Pachislot Machines Development, Manufacture, and Sales: SANKYO Full Line-up Bisty Pachinko and Pachislot Machines Development and Manufacture: Bisty Sales: Fields Strength in products using licensed IP JOY BRAIN Pachinko Machines Development and Manufacture: JO
Slide 5: Policy on Growth Strategy
Policy on Growth Strategy Market Development Diversification (Overseas expansion) (New businesses) Overseas sales of pachinko and pachislot New businesses including operation of N t l Neutral P i Passive machines casinos Market Penetration Product Development (Market share increase) (Peripheral prod
Slide 6: Share of Pachinko Machines Market (unit basis)
Share of Pachinko Machines Market (unit basis) 25% 2014 19-20% 20% Kyoraku 15% Sanyo SANKYO Sammy 10% H i + Olympia Heiwa Ol i 5% 0% CY2009 2010 2011 2012 2013 Source: Yano Research Institute 5
Slide 7: Share of Pachislot Machines Market (unit basis)
Share of Pachislot Machines Market (unit basis) 35% 30% 25% Sammy 20% 15% Universal 10% SANKYO Daito 5% 2014 Heiwa + Olympia 4-5% 0% CY2009 2010 2011 2012 2013 Source: Yano Research Institute 6
Slide 8: 5-year Financial Highlights
5-year Financial Highlights Consolidated: mil. yen FY 3/2010 FY 3/2011 FY 3/2012 FY 3/2013 FY 3/2014 Net Sales 222 673 222,673 201 606 201,606 173 682 173,682 104 150 104,150 158 453 158,453 Pachinko Machines 180,471 149,876 123,353 53,302 101,102 Pachislot Machines 23,698 30,316 24,282 27,822 38,43
Slide 9: Forecast of FY 3/2015 (Highlights)
Forecast of FY 3/2015 (Highlights) million yyen FY 3/2014 FY 3/2015 YoY Net Sales 158,453 172,000 +13,547 +8.5% Operating Income 28,023 19,200 -8,823 8 823 -31.5% Recurring Income 30 144 30,144 20 900 20,900 -9,244 , -30.7% Net Income 22,400 14,200 -8,200 -36.6% 36 6% EPS Y239.65 Y151.92 Repurchase
Slide 10: Stock Information
Stock Information Price 4 420 4,420 (February 6, 2015) Currency in JPY M k t Cap Market C 431 380M 431,380M Trailing P/E (ttm) 18.44 Forward P/E (1 yr) 29.09 Price/Book (mrq) 1.01 Forward Annual Dividend Rate 150.00 Forward Annual Dividend Yield 3.39% Repurchase of the Company’s own shares has not b
Slide 11: Repurchase of Own Shares
Repurchase of Own Shares Conducted 8 000 000 shares 8,000,000 36,630 million yen ROE* EPS* 6 000 000 株 6,000,000 +0or35 ptt +0.35 +14 2 yen +14.2 30,000 百万円 *Shareholders’ equity as of the end of the first nine months *The total number of shares outstanding excluding the 30 billion yen of the fiscal
Slide 12: Retirement of 8,000,000 Shares of Treasury Stock
Retirement of 8,000,000 Shares of Treasury Stock Current total number of shares shares outstanding 97,597,500 Treasury stock shares ((Consolidated basis)) 12 126 066 12,126,066 Number of shares to be shares retired 8,000,000 Total number of shares shares outstanding excluding treasury stock after re
Slide 13: Dividend Policy
Dividend Policy Stable dividend Commitment to 25% payout ratio FY 3/2015 No dividend cut since the listing DPS 150 yen Including interim dividend 12
Slide 14: Analyst Coverage
Analyst Coverage Analyst coverage Mr. Yuki Okishio by 6 firms Mr. Satoshi Tanaka Mr. Masanori Minami Mr Takeshi Koyama Mr. Mr Masashi Morita Mr. Mr Eiji Maeda Mr. Source: QUICK 13
Slide 15: Market Forecasts
ae - Siwy] 1 EVANGELION cTH ANNIVERSARY SS Market Forecasts
Slide 16: Leisure Market and Pachinko Player Population
30% of the Leisure Market 18.8 trill. yen Pachinko Rental Ball Fee 9.7 mil. people Pachinko Player Population 65.2 trill. yen Leisure Market Source: Japan Productivity Center “Leisure White Paper” 15
Slide 17: Structure of Pachinko Industry
Structure of Pachinko Industry 18.8 trill. yen About 1.1 trill. yen Pachinko Rental Ball Fee Cost of Machine Purchase About 0.6 trill. yen Pachinko Machine Market About 3 trill. yen G Gross Profit P fit off Parlor P l About 0.5 trill. yyen Pachislot Machine Market 16
Slide 18: Size of Pachinko and Pachislot Machines Market
Size of Pachinko and Pachislot Machines Market 1,172 1,201 1,201 375 429 1,082 286 1,030 473 410 886 825 772 Pachislot Machines Market (bn. yen) 609 620 Pachinko Machines Market (bn. yen) 979 1,259 1,326 1,390 1,300 No. of Sales for Pachislot Machines 2,900 , 2 602 2,602 2,494 (thousand units) 2,048
Slide 19: Declining Pachinko Player Population is an Issue
Declining Pachinko Player Population is an Issue 21.0 19.3 18.8 19.1 18.8 17.2 16.7 12.6 11.1 9.7 Pachinko Rental Ball Fee (trill. yen) Number of Pachinko players (Million people) CY2009 2010 2011 2012 2013 Source: Japan Productivity Center “Leisure White Paper” 18
Slide 20: Background to Declining Pachinko Player Population
Background to Declining Pachinko Player Population Reasons for not playing or quitting playing pachinko/pachislot 1 Expensive to play Increase of models targeting heavy users 2 (Difficult to understand playing method) 3 Game machines have become stereotypical Dislike the parlor environment 4 (smokin
Slide 21: SANKYO's Initiatives and Progress So Far
SANKYO’s Initiatives and Progress So Far
Slide 22: SANKYO's Initiatives
SANKYO’s Initiatives Short-term measures Medium to long-term measures 2014 ((FY 3/2015) / ) 2015+ ((FY 3/2016+) / ) To increase pachinko player population Pachinko/Pachislot Industry Vitalization Project Revision of regulations governing game Strengthening of brand power machine Introduction of a va
Slide 23: Pachinko: Emphasis on Players' Jackpot Experience
Pachinko: Emphasis on Players’ “Jackpot Experience” High Return Focus on Light Middle Type machines in the current fiscal year (FY 3/2015) Maximum Type Middle Type Light Middle Type *Daikoku Denki’s (DK-SIS) standards are used Light Type as a reference for classification of specifications. Minimum T
Slide 24: Market Evaluation of Pachinko Machines
Market Evaluation of Pachinko Machines Evaluation of our products is on an improving trend compared with the previous fiscal year (FY 3/2014). 3/2014) Among recent products, evaluation of “Fever Queen” was outstanding. outstanding Evangelion 8 Uchi no Pochies Fever Queen E ll Excellent Fever Bodacio
Slide 25: The Latest Pachinko Machine
The Latest Pachinko Machine High entertainment Emphasize the attractiveness of characters (IPs) Main character of the game is selectable Original computer graphics 24
Slide 26: Pachinko Machines for Light Users
Pachinko Machines for Light Users No use of licensed characters (IPs) Simple gaming performance Thrilling movement of balls 25
Slide 27: Measures to Enhance Shareholder Value
Measures to Enhance Shareholder Value Introduction of stock compensation-type 1 stock options May 17, 2014 IIntroduction d i off a shareholder h h ld 2 special benefit plan August 20, 2014 3 Repurchase of the Company’s own shares Februaryy 3,, 2015 Retirement of 8,000,000 shares February 3, 2015 4 o
Slide 28: Appendix: Note on results forecast for year ending March 2015
Note on the results forecast for the year ending March 31, 2015 Appendix Although we revised the pachislot sales plan on February 3, 2015 (a decrease from 75,000 units to 63,000 units), the plan for net sales, operating income, recurring income, and net income is unchanged. Please note that the fore
Slide 29: Business Results for the First 9 Months of FY 3/2015
Business Results for the First 9 Months of FY 3/2015 FY 3/2014 FY 3/2015 Forecast FY 3/2014 FY 3/2015 連結：百万円 Consolidated: million yen 9 Months 9 Months YoY Full Year Q1 Q2 Q3 Q4 Q1 Q2 Q3 売上高 Net Sales 133,575 113,510 -20,065 172,000 63,456 41,210 28,909 24,878 20,688 16,156 76,666 パチンコ Pachinko 91
Slide 30: Pachinko Machines Business
Pachinko Machines Business FY 3/2014 FY 3/2015 Forecast FY 3/2014 FY 3/2015 連結：百万円 Consolidated: million yen 9 Months 9 Months YoY Full Year Q1 Q2 Q3 Q4 Q1 Q2 Q3 売上高 Net Sales 91,202 85,226 -5,976 129,700 43,428 32,956 14,818 9,900 7,433 12,785 65,008 営業利益 Operating Income 23 870 23,870 10 483 10,48
Slide 31: Pachislot Machines Business
Pachislot Machines Business FY 3/2014 FY 3/2015 Forecast FY 3/2014 FY 3/2015 連結：百万円 Consolidated: million yen 9 Months 9 Months YoY Full Year Q1 Q2 Q3 Q4 Q1 Q2 Q3 売上高 Net Sales 26,728 18,755 -7,973 25,600 15,327 3,862 7,539 11,705 10,683 329 7,743 営業利益 Operating Income 8 230 8,230 4 071 4,071 -4,159
Slide 32: Gross Margin/Operating Margin
Gross Margin/Operating Margin FY 3/2014 FY 3/2015 Forecast FY 3/2014 FY 3/2015 連結 Consolidated 9 Months 9 Months YoY Full Year Q1 Q2 Q3 Q4 Q1 Q2 Q3 売上総利益率 Gross Margin 48.6% 43.6% -5.0pt 39.8% 50.1% 50.6% 42.6% 38.1% 48.7% 43.9% 42.2% 営業利益率 Operating Margin 21 3% 21.3% 9 6% 9.6% -11.7pt 11 7pt 11 2%
Slide 33: Game Machine Market
Game Machine Market 全日遊連加盟パーラーの状況 3,500 3,332 Situation of Parlors that Are Members of Zennichiyuren パチンコ設置台数 N off installed No. i t ll d Pachinko P hi k Machines M hi 営業中の店舗数 3,158 3,163 No. of outlets currently in operation 3,000 2,900 3,107 10,948 10,906 3,042 3,009 10,858 10,847 10,825 10,791 1
Slide 34: Number of Titles Sold (All Manufacturers)
Number of Titles Sold (All Manufacturers) パチンコ機 Pachinko Machines CY2009 102 ・１タイトル当たり販売台数 2013年度：21,075台（2,234千台÷106） 2010 121 2014年度：18,518台（2,000千台÷108） 2011 107 ・Sales per title CY2013: 21,075 units (2,234,000 units/106) 2012 106 CY2014: 18,518 units (2,000,000 units/108) 2013 106 2014 108 0 20
Slide 35: Compliance with Format Inspection
Compliance with Format Inspection パチンコ機 Pachinko Machines アレンジ、じゃん球含む ア ンジ、じゃん球含む including Arrange Ball,Jong-Kyu 2009 2010 2011 2012 2013 2014 受付 Applicant 637 658 614 598 503 613 適合 Pass 537 544 536 534 412 505 不適合 Fail 134 112 69 87 71 97 SANKYO+JB 40 25 21 30 28 40 Bisty 13 9 12 6 10 10 SANKYO G
Slide 36: SANKYO Group Companies
SANKYO Group Companies （株）ジェイビー JB Co., Ltd. インタ ナショナル カ ド システム（株） インターナショナル・カード・システム（株） 100.0% フィ ルズ（株） フィールズ（株） International Card System Co., Ltd. 100.0% Fields Corporation 15.6% （株）三共エクセル （株）サン・ラック Sankyo Sa yo Excel ce Co Co.,, Ltd. td 100.0% 00 0 Su Luck Sun uc Co Co.,, Ltd. td 95 95.0% 0 （株）サ
Slide 37: Contact Us
Contact Us +81-3-5778-7773 ir desk@sankyo fever co jp ir-desk@sankyo-fever.co.jp