Sankyo Co., Ltd. · TSE:6417

Sankyo — FY2022 Earnings Presentation

41 slides from Sankyo's earnings presentation, May 12, 2022

1. Slide 1: Presentation on Business Results of FY 3/2022

   Presentation on Business Results of FY 3/2022 (April 1, 2021 to March 31, 2022) May 12, 2022 SANKYO CO., LTD. Prime Market of the TSE #6417 1

2. Slide 2: Contents

   Contents  Overview of Financial Results P3 Overview of Business P11 FY 3/2023 Forecast P18 Appendix P34 © 2022 SANKYO CO., LTD. 2

3. Slide 3: Financial Highlights

   Financial Highlights  Substantial increases in both net sales and profits compared with the same period of the previous year due to increases in the sales volume of pachinko machines and pachislot machines.  The two major pachinko titles led the favorable performance. Net Sales 84,857 million yen

4. Slide 4: Summary of Financial Results: Market

   Summary of Financial Results  Support by replacement demand for machines compliant with the new regulations, despite a challenging market environment due to the COVID-19 pandemic and Pachinko semiconductor shortages. Pachislot  The sales volume of pachinko machines was buoyant, because new regulat

5. Slide 5: Summary of Financial Results

   Summary of Financial Results million yen FY 3/2021 FY 3/2022 YoY Net Sales 58,129 84,857 +26,728 +46.0% Pachinko Machines Business 52,310 71,860 +19,550 +37.4% Pachislot Machines Business 3,022 8,891 +5,869 +194.2% Cost of Sales 27,403 37,037 +9,634 +35.2% Gross Profit 30,726 47,819 +17,093 +55.6% P

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

   Factors of Change in Consolidated Net Sales Million yen Pachislot Machines Pachinko Business Machines Business +5,869 +1,362 ‐52 84,857 +19,550 Ball Bearing Other Supply Business Business 58,129 FY3/2021 FY3/2022 +26,728 million yen（+46.0%） © 2022 SANKYO CO., LTD. 6

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

   Factors of Change in Consolidated Operating Income Million yen Advertising expenses Sales Other factors increases commission The gross profit increases +3,995 21,357 of the pachinko R&D +3,737 ‐864 expenses machine sales ‐2,325 increases decreases +151 +10,076 The gross profit of the pachislot machi

8. Slide 8: Costs and Expenses

   Costs and Expenses million yen FY 3/2021 FY 3/2022 YoY SG & A Expenses 24,138 26,462 +2,324 +9.6% Advertising Expenses 871 1,735 +864 +99.2% Sales Commission 2,172 4,497 +2,325 +107.0% R&D Expenses 12,133 11,982 -151 -1.2% Salaries & Wages 2,937 2,678 -259 -8.8% Depreciation & Amortization 2,398 2,1

9. Slide 9: Summary of Balance Sheet

   Summary of Balance Sheet million yen As of 31-Mar-21 As of 31-Mar-22 YoY Factors of Change Total current assets 243,343 264,859 +21,516 Ｉｎcrease in cash and deposits and notes and accounts Quick assets 234,738 250,241 +15,503 receivable‐trade Inventories 4,269 7,820 +3,551 Total fixed assets 48,761

10. Slide 10: Overview of Business

    Contents Overview of Financial Results P3  Overview of Business P11 FY 3/2023 Forecast P18 Appendix P34 © 2022 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 FY 3/2022 YoY FY 3/2021 (Apr‐Mar) 52,310 Net Sales 52,310 71,860 +19,550 Sales volume of SANKYO-brand Operating Income 12,916 24,142 +11,226 and JB-brand pachinko machines +919 increases. Percentage 24.7

12. Slide 12: Pachinko Machines Business

    Pachinko Machines Business New Title x7 Reused Models ©カラー ©カラー／Project Eva. ©Bisty 1Q 2Q 3Q 4Q Fever Star Blazers: Space Fever Tiger Mask W Fever Golgo13 Fever Valvrave the Liberator 2 Fever Macross Frontier 4 Battleship Yamato 2202 Light ver. Light ver. Fever Powerful Fever Mobile Suit Gundam Unic

13. Slide 13: Pachislot Machines Business

    Pachislot Machines Business Factors of Change in Net sales Data Million yen million yen FY 3/2021 FY 3/2022 YoY FY 3/2021 (Apr‐Mar) 3,022 Net Sales 3,022 8,891 +5,869 Sales volume of SANKYO-brand Operating Income (1,890) 1,185 +3,075 pachislot machines increases and +5,317 Percentage (62.5%) 13.3% u

14. Slide 14: Pachislot Machines Business

    Pachislot Machines Business ©カラー ©カラー／Project Eva. 1Q 2Q 3Q 4Q Pachislot Symphogear NEON GENESIS EVANGELION Pachislot Macross DELTA "Yuki no Uta" -Resonance of souls- New Title x3 Sales of Unit 2,367 units 17 units 10,224 units 9,825 units Total 22,433 units © 2022 SANKYO CO., LTD. 14

15. Slide 15: Pachinko Machines Market Share (unit basis)

    Pachinko Machines Market Share (unit basis) 25% Sanyo 20% Kyoraku 15% SANKYO Newgin 10% Sammy Fuji 5% 0% 2016 2017 2018 2019 2020 2021 Source: Yano Research Institute ※2021：Estimate of SANKYO © 2022 SANKYO CO., LTD. 15

16. Slide 16: Pachislot Machines Market Share (unit basis)

    Pachislot Machines Market Share (unit basis) 30% Universal 25% 20% Daito 15% Kitac 10% Sammy Heiwa・Olympia 5% SANKYO 0% 2016 2017 2018 2019 2020 2021 Source: Yano Research Institute ※2021：Estimate of SANKYO © 2022 SANKYO CO., LTD. 16

17. Slide 17: FY 3/2023 Forecast

    Contents Overview of Financial Results P3 Overview of Business P11  FY 3/2023 Forecast P18 Appendix P34 © 2022 SANKYO CO., LTD. 17

18. Slide 18: Pachinko Market Sales volume forecast

    Pachinko Market Sales volume forecast FY3/2023： 1,200 thousand units Sales Volume (April 1, 2022 to March 31, 2023) Total number of units sold FY3/2022：1,180 units YoY Approx.+43％ thousand Thousand units 2,100 (April 1, 2021 to March 31, 2022) （10 titles sold 30,000 units or more. ） 1,800  Total sa

19. Slide 19: Pachislot Market Sales volume forecast

    Pachislot Market Sales volume forecast FY3/2023： 600 thousand units Sales Volume (April 1, 2022 to March 31, 2023) Total number of units sold FY3/2022： 740 units YoY Approx.+56％ thousand Thousand units (April 1, 2021 to March 31, 2022) （7 titles sold 20,000 units or more. ） 1,000  Total sales volum

20. Slide 20: Financial Forecasts

    Financial Forecasts  Year-on-year increases in sales and profits are forecast due to increases in the sales volume of pachinko machines and pachislot machines.  The Company will fully leverage the Groupʼs brand power that has been enhanced in recent years to aim to increase market share. Net Sales

21. Slide 21: Summary of Financial Forecasts

    Summary of Financial Forecasts FY 3/2022 million yen FY 3/2021 Forecast YoY Net Sales 84,857 110,000 +25,143 +29.6% Pachinko Machines Business 71,860 93,400 +21,540 +30.0% Pachislot Machines Business 8,891 11,300 +2,409 +27.1% Cost of Sales 37,037 48,800 +11,763 +31.8% Gross Profit 47,819 61,200 +13

22. Slide 22: Factors of Change in Consolidated Net Sales

    Factors of Change in Consolidated Net Sales Million yen Pachislot Ball Bearing Pachinko Machines Supply Other Machines Business Business Business Business +2,409 +1,205 ‐10 110,000 +21,540 84,857 FY3/2022 FY3/2023 +25,143 million yen（+29.6%） © 2022 SANKYO CO., LTD. 22

23. Slide 23: Factors of Change in Consolidated Operating Income

    Factors of Change in Consolidated Operating Income Million yen +11,954 +909 ‐571 ‐741 The gross profit Advertising ‐2,988 of the pachinko Sales expenses machine sales increases commission R&D ‐920 increases expenses 29,000 increases Other factors The gross profit increases of the pachislot machine s

24. Slide 24: Costs and Expenses

    Costs and Expenses FY 3/2023 million yen FY 3/2022 Forecast YoY SG & A Expenses 26,462 32,200 +5,738 +21.7% Advertising Expenses 1,735 2,306 +571 +32.9% Sales Commission 4,497 5,238 +741 +16.5% R&D Expenses 11,982 14,970 +2,988 +24.9% Salaries & Wages 2,678 2,331 -347 -13.0% Depreciation & Amortizat

25. Slide 25: Pachinko Machines Business

    Pachinko Machines Business Factors of Change in Net sales Data Million yen FY 3/2023 million yen FY 3/2022 Forecast YoY FY 3/2022 71,860 (Apr‐Mar) Net Sales 71,860 93,400 +21,540 Sales volume of SANKYO-brand Operating Income 24,142 31,900 +7,758 and JB-brand pachinko machines +16,565 increases. Perc

26. Slide 26: Pachinko Machines Business

    Pachinko Machines Business 1Q 1Q 2Q以降 New Title Fever Danmachi Fever THE iDOLM@STER MILLION LIVE! 39 fes ver. xx 54 x9 Fever Fafner Dead Aggressor 3 Fever THE iDOLM@STER EXODUS "Chou Soukyu" 3800 ver. MILLION LIVE! Light ver. x2 （Resale） Reused Fever Mobile Suit Gundam Unicorn Models Sales of - unit

27. Slide 27: Pachislot Machines Business

    Pachislot Machines Business Factors of Change in Net sales Data Million yen FY 3/2023 FY 3/2022 8,891 million yen FY 3/2022 Forecast YoY (Apr‐Mar) Net Sales 8,891 11,300 +2,409 Sales volume of SANKYO-brand +3,253 Operating Income 1,185 1,900 +715 pachislot machines increases. Percentage 13.3% 16.8%

28. Slide 28: Pachislot Machines Business

    Pachislot Machines Business 1Q 1Q 2Q 3Q- x4 Pachislot Aquarion ALL STARS xx 14 New Title x3 x1 Sales of - units - units - units Unit Forecast of Sales of Unit 30,000 units © 2022 SANKYO CO., LTD. ※ Introduction of titles is in line with the current plan to date, but may be subject to changes. 28

29. Slide 29: Initiatives of SANKYO in FY 3/2023

    Initiatives of SANKYO in FY 3/2023 Pachinko Machines Business  Aim to increase market shares.  Fully leveraging the brand power that has been enhanced thanks to brisk machine utilization of the products introduced by the Group in recent years.  In addition to mainstay titles with proven track rec

30. Slide 30: About Smart Pachinko Machines/ Smart Pachislot Machines

    About Smart Pachinko Machines/ Smart Pachislot Machines Smart Pachinko Machines/ Smart Pachislot Machines  A major feature is that payout data is digitally managed without players touching pachinko balls or pachislot tokens.（Smart Pachinko and Smart Pachislot is planned to release in January 2023 a

31. Slide 31: About The Return of Profits to Shareholders

    About The Return of Profits to Shareholders Cash dividend Dividend Policy  The Companyʼs dividend policy is to continue stable dividend payments, taking into consideration financial results, the financial position, the payout ratio, and other factors comprehensively. FY3/2023 Forecasts \120 per sha

32. Slide 32: Results of Repurchase of the Company's Own Shares

    Results of Repurchase of the Companyʼs Own Shares 【Results of Repurchase of own shares】（Disclosed in May 2, 2022） Aggregate number of shares repurchased: 3,258,400 shares Aggregate amount of repurchase cost: 9,999 million yen 【Planned Cancelation】 （Disclosed in May 12, 2022） Number of shares to be c

33. Slide 33: Appendix

    Contents Overview of Financial Results P3 Overview of Business P11 FY 3/2023 Forecast P18  Appendix P34 © 2022 SANKYO CO., LTD. 33

34. Slide 34: Business Results for the Full Year of FY 3/2022

    Business Results for the Full Year of FY 3/2022 FY 3/2021 FY 3/2022 FY 3/2023 FY 3/2021 FY 3/2022 Consolidated:milion yen Full year Full Year YoY Forecast Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net Sales 58,129 84,857 +26,728 110,000 17,960 7,372 15,668 17,129 10,932 17,129 42,283 14,513 Pachinko 52,310 71,860 +19

35. Slide 35: Margin / Expenses etc.

    Margin / Expenses etc. GP Margin/OP Margin FY 3/2021 FY 3/2022 FY 3/2023 FY 3/2021 FY 3/2022 Consolidated Full Year Full Year YoY Forecast Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 GP Margin 52.9% 56.4% +3.5pt 55.6% 51.0% 46.0% 57.6% 53.4% 56.3% 51.2% 59.0% 54.8% OP Margin 11.3% 25.2% +13.8pt 26.4% 20.9% (36.2%) 20.2

36. Slide 36: Pachinko Machines Business

    Pachinko Machines Business FY 3/2021 FY 3/2022 FY 3/2023 FY 3/2021 FY 3/2022 Consolidated:milion yen Full Year Full Year YoY Forecast Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net Sales 52,310 71,860 +19,550 93,400 16,952 5,432 14,668 15,258 9,189 16,481 36,107 10,083 Operating Income 12,916 24,142 +11,226 31,900 5,4

37. Slide 37: Pachislot Machines Business

    Pachislot Machines Business FY 3/2021 FY 3/2022 FY 3/2023 FY 3/2021 FY 3/2022 Consolidated:milion yen Full Year Full Year YoY Forecast Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net Sales 3,022 8,891 +5,869 11,300 210 1,303 185 1,324 1,029 102 4,504 3,256 Operating Income (1,890) 1,185 +3,075 1,900 (722) (597) (838) 2

38. Slide 38: 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 3/2022 Net Sales 146,579 137,130 81,455 86,220 88,558 78,416 58,129 84,857 Operating Income 13,233 18,826 5,059 10,181 21,286 12,551 6,587 21,357 Recurring Income 14,870 19,965 3,832 11,319 22,30

39. Slide 39: 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 2,749 2,637 2,557 11,000 2,500 2,432 3,000 2,338 10,000 2,500 2,000 1,687 9,000 1,665 1,637 1,572 2,179 2,172 2,160 2,157 2,149 2,137 2,000 2,134 2,127 2,130 2,11

40. Slide 40: Others

    Others Number of Titles Sold (All Manufacturers) Compliance with Format Inspection Pachinko machines 2017 2018 2019 2020 2021 2022J‐M 2016 93 Number of titles Applicant 875 711 945 912 990 218 2017 90 Pass 361 336 430 295 313 61 Fail 463 333 560 499 598 131 2018 116 SANKYO+JB 34 30 28 37 23 5 2019 9

41. Slide 41: 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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