Sankyo Co., Ltd. · TSE:6417

Sankyo — H1 FY3/2021 Earnings Presentation

32 slides from Sankyo's earnings presentation, Nov 10, 2020

  1. Slide 1: Presentation on Business Results for the First Six Months of FY 3/2021

    Presentation on Business Results for the First Six Months of FY 3/2021 (April 1, 2020 to September 30, 2020) November 10, 2020 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・ ・・・ ・・ P20 Appendix ・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・ P25 © 2020 SANKYO CO., LTD. 2

  3. Slide 3: Financial Highlights

    Financial Highlights  The Group secured profits for the first six months of FY 3/2021, even in a challenging business environment of the COVID-19 pandemic.  Both net sales and profits decreased from the same period of the previous fiscal year due to a decrease in the number of pachinko/pachislot t

  4. Slide 4: Summary of Financial Results: Market Overview

    Summary of Financial Results  Machine utilization at pachinko parlors, having hit bottom in May, the month in which the state of emergency was lifted, is on a recovery trend. Consequently, there are signs of an Pachinko upturn in pachinko parlor operatorsʼ willingness to purchase new models. Pachis

  5. Slide 5: Summary of Financial Results

    Summary of Financial Results million yen FY 3/2020 2Q FY 3/2021 2Q YoY FY 3/2021 Forecast Net Sales 33,493 25,332 -8,161 -24.4% 73,500 Pachinko Machines Business 27,278 22,384 -4,894 -17.9% 57,000 Pachislot Machines Business 3,029 1,513 -1,516 -50.0% 10,000 Cost of Sales 15,771 12,788 -2,983 -18.9%

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

    Factors of Change in Consolidated Net Sales Million yen Pachinko Machines Business Pachislot Machines Ball Bearing 33,493 ‐4,894 Business Supply Other Business Business ‐1,516 ‐1,523 ‐228 25,332 -8,161 million yen（-24.4%） © 2020 SANKYO CO., LTD. 6

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

    Factors of Change in Consolidated Operating Income Million yen The gross profit of the pachinko machine sales decreases 3,077 R&D expenses decreases Other factors +983 Sales commission decreases Advertising expenses The gross profit decreases +645 of the pachislot ‐1,231 machine sales decreases 1,08

  8. Slide 8: Costs and Expenses

    Costs and Expenses million yen FY 3/2020 2Q FY 3/2021 2Q YoY FY 3/2021 Forecast SG & A Expenses 14,644 11,459 -3,185 -21.7% 27,500 Advertising Expenses 1,299 245 -1,054 -81.1% 1,233 Sales Commission 1,082 437 -645 -59.6% 2,579 R&D Expenses 6,952 5,969 -983 -14.1% 13,380 Salaries & Wages 1,274 1,248

  9. Slide 9: Summary of Balance Sheet

    Summary of Balance Sheet million yen As of 31-Mar-20 As of 30-Sep-20 YoY Factors of Change Total current assets 276,041 243,135 ‐32,906 Decrease in cash and deposits, marketable securities Quick assets 259,589 229,552 ‐30,037 and notes and accounts receivable‐trade Total fixed assets 49,190 49,121 ‐

  10. Slide 10: Contents

    Contents Overview of Financial Results ・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・ P3  Overview and Forecasts of Business ・・・・・・・・・・・・・ P11 Initiatives of Pachinko and Pachislot Industry・ ・・・ ・・ P20 Appendix ・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・ P25 © 2020 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 3/2020 2Q FY 3/2021 2Q YoY FY 3/2020 1st Six Months (Apr‐Sep) 27,278 Net Sales 27,278 22,384 -4,894 Sales volume of SANKYO-brand Operating Income 5,594 4,737 -857 and JB-brand pachinko machines ‐3,806 decreases

  12. Slide 12: Pachinko Machines Business: Title Lineup

    Pachinko Machines Business 1Q 1Q 2Q 3Q 4Q以降 New Title Fever Symphogear 2 Fever BIOHAZARD REVELATIONS 2 Light / Light middle ver. Fever Queen Ⅱ CODE GEASS Lelouch of the Rebellion x8 Fever Aquarion ALL STARS Fever Shinkagetsu 2 Yozakura ver. LIGHT ver. Fever Golgo13 Shippu ver. Super Combi α 7500 Reu

  13. Slide 13: Pachislot Machines Business

    Pachislot Machines Business Factors of Change in Net sales Data Million yen million yen FY 3/2020 2Q FY 3/2021 2Q YoY FY 3/2020 1st Six Months (Apr‐Sep) 3,029 Net Sales 3,029 1,513 -1,516 Sales volume of SANKYO-brand Operating Income 7 (1,319) -1,326 pachislot machines decreases. ‐2,240 Percentage 0

  14. Slide 14: Pachislot Machines Business: Title Lineup

    Pachislot Machines Business ©創通・サンライズ 1Q 1Q 2Q 3Q 4Q以降 Pachislot for CHAR AZNABLE -RED COMET's Counterattack- xx 14 New Title x3 x1 Sales of - units - units 314 units 3,531 units Unit FY 3/2021 Forecast Progress 3,845 units（13.7 %） 28,000 units © 2020 SANKYO CO., LTD. ※ Introduction of titles is in

  15. Slide 15: Pachinko Market

    Pachinko Market Sales Volume Sales volume forecast FY2021： 800 thousand units Thousand units (April 1, 2020 to March 31,2021) Total number 2,100 of units sold Approx. 240 thousand units YoY Approx.-60％ （3 titles sold 30,000 units or more. (April to September, 2020) 1,800 (April to September)） 1,590

  16. Slide 16: Pachislot Market

    Pachislot Market Sales Volume Sales volume forecast FY2021： 370 thousand units Thousand units (April 1, 2020 to March 31,2021) Total number 1,400 of units sold Approx. 160 thousand units YoY Approx.-47％ （2 titles sold 20,000 units or more. (April to September) 1,200 (April to September)）  Sales vol

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

    Initiatives of SANKYO in The Pachinko and Pachislot Machine Markets  In the first half, the Group minimized the number of titles for launch in light of an assessment of pachinko parlor operatorsʼ willingness to purchase new models during the COVID-19 pandemic. In the second half, the group accelera

  18. Slide 18: Dividend

    Dividend About dividend  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  No dividend cut since the listing Cash dividend Results for FY 3/2020 Annual cas

  19. Slide 19: Contents

    Contents Overview of Financial Results ・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・ P3 Overview and Forecasts of Business ・ ・・・ ・・・ ・・・ ・・・・ P11 ・  Initiatives of Pachinko and Pachislot Industry・・・ P20 Appendix ・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・ P25 © 2020 SANKYO CO., LTD. 19

  20. Slide 20: Dealing with Machines under the Former Regulations

    Dealing with Pachinko/Pachislot Machines with the Former Regulations 2020 2021 Target Type (Thousand May June July Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. units) Amadeji, Removal within 7 months (210 days) from the initial date of expiry of validity of inspecti

  21. Slide 21: Pachinko and Pachislot Machine Utilization in Parlors

    Pachinko and Pachislot Machine Utilization in Parlors Pachinko(4 yen*) and Pachislot(20yen *) Machine Utilization Rate in Parlors（YoY） 100%  Machine utilization level at pachinko parlors has 93％ been gradually up after lifting of the state of 89％ emergency. 90% Pachislot(20 yen *)  Recovery of uti

  22. Slide 22: New Gaming Performance "Yu-Time"

    New Gaming Performance “Yu-Time” Point  New pachinko gaming performance “Yu-Time” is that entering a time-shortening mode ”Jitan” if you cannot hit a jackpot within the predetermined number of spins. Its installation has been possible from April, 2020.  “Sense of relief,” new value added to playin

  23. Slide 23: Format Inspection

    Format Inspection  The number of titles compliant with the new regulations and that of titles sold are on the increase after temporary stagnation. Number of titles passed format inspection And Number of titles released or expected to be released to markets 2020 35 Pachinko（Number of titles passed）

  24. Slide 24: Contents: Appendix

    Contents Overview of Financial Results ・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・ P3 Overview and Forecasts of Business ・ ・・・ ・・・ ・・・ ・・・・ P11 ・ Initiatives of Pachinko and Pachislot Industry・ ・・・ ・・ P20  Appendix ・・・・・・・・・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・・・ ・ P25 © 2020 SANKYO CO., LTD. 24

  25. Slide 25: Business Results for the First Six Months of FY 3/2021

    Business Results for the First Six Months of FY 3/2021 FY 3/2020 FY 3/2021 Forecast FY 3/2020 FY 3/2021 Consolidated:milion yen 6 Months 6 Months YoY Full Year Q1 Q2 Q3 Q4 FY Q1 Q2 Net Sales 33,493 25,332 -8,161 73,500 11,351 22,142 28,245 16,678 78,416 17,960 7,372 Pachinko 27,278 22,384 -4,894 57,

  26. Slide 26: Margin / Expenses etc.

    Margin / Expenses etc. GP Margin/OP Margin FY 3/2020 FY 3/2021 Forecast FY 3/2020 FY 3/2021 Consolidated 6 Months 6 Months YoY Full Year Q1 Q2 Q3 Q4 FY Q1 Q2 GP Margin 52.9% 49.5% -3.4pt 48.3% 53.5% 52.6% 55.3% 50.5% 53.2% 51.0% 46.0% OP Margin 9.2% 4.3% -4.9pt 10.9% (5.3%) 16.6% 26.5% 12.0% 16.0% 2

  27. Slide 27: Pachinko Machines Business

    Pachinko Machines Business FY 3/2020 FY 3/2021 Forecast FY 3/2020 FY 3/2021 Consolidated:milion yen 6 Months 6 Months YoY Full Year Q1 Q2 Q3 Q4 FY Q1 Q2 Net Sales 27,278 22,384 -4,894 57,000 7,064 20,214 20,247 12,989 60,514 16,952 5,432 Operating Income 5,594 4,737 -857 13,500 (238) 5,832 6,144 3,0

  28. Slide 28: Pachislot Machines Business

    Pachislot Machines Business FY 3/2020 FY 3/2021 Forecast FY 3/2020 FY 3/2021 Consolidated:milion yen 6 Months 6 Months YoY Full Year Q1 Q2 Q3 Q4 FY Q1 Q2 Net Sales 3,029 1,513 -1,516 10,000 2,635 394 6,516 1,896 11,441 210 1,303 Operating Income 7 (1,319) -1,326 (700) 718 (711) 2,394 48 2,449 (722)

  29. Slide 29: Financial Indicates

    Financial Indicates million yen FY 3/2014 FY 3/2015 FY 3/2016 FY 3/2017 FY 3/2018 FY 3/2019 FY 3/2020 FY 3/2021E Net Sales 158,453 146,579 137,130 81,455 86,220 88,558 78,416 73,500 Operating Income 28,023 13,233 18,826 5,059 10,181 21,286 12,551 8,000 Recurring Income 30,144 14,870 19,965 3,832 11,

  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 3,500 3,500 12,000 3,000 2,918 11,000 2,833 3,000 2,749 2,637 2,557 10,000 2,500 2,500 2,373 2,367 2,371 2,339 2,329 2,350 2,288 2,273 2,266 2,259 2,254 8,929 8,896 8,886 8,802 8,76

  31. Slide 31: Others

    Others Number of Titles Sold (All Manufacturers) Compliance with Format Inspection Pachinko machines 2015 2016 2017 2018 2019 2020J‐S FY2016 18,401 Sales per title (Left) 104 Number of titles Applicant 731 864 875 711 945 652 FY2017 17,046 93 Pass 519 396 361 336 430 198 Fail 172 458 463 333 560 378

  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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