* Notes
- Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None
Newly added: - | Excluded: - |
- Application of special accounting methods for presenting quarterly consolidated financial statements: None
- Changes in accounting policies and accounting-based estimates, and restatements
- Changes in accounting policies due to revisions in accounting standards, others: Yes
- Changes in accounting policies other than 1) above: None
- Changes in accounting-based estimates: None
- Restatements: None
- Number of outstanding shares (common stock)
- Number of outstanding shares at the end of the period (including treasury stock)
As of Jun. 30, 2022: | 89,065,301 shares | As of Mar. 31, 2022: | 89,065,301 shares |
2) Number of shares of treasury stock at the end of the period | |||
As of Jun. 30, 2022: | 8,503,861 shares | As of Mar. 31, 2022: | 8,503,829 shares |
3) Average number of shares outstanding during the period | |||
Three months ended Jun. 30, 2022: | 80,561,448 shares | Three months ended Jun. 30, 2021: | 80,541,555 shares |
Note 1: The current quarterly financial report is not subject to quarterly review 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. Please refer to "Qualitative Information on Quarterly Consolidated Financial Performance, Explanation of Consolidated Forecasts and Other Forward-looking Statements" of the attachments for forecast assumptions and notes of caution for usage.
Sanrio Company, Ltd. (8136) Financial Results for the First Quarter of FY2022
Qualitative Information on Quarterly Consolidated Financial Performance
Explanation of Results of Operations
During the first quarter of the fiscal year under review, economic activity slowly began to recover both in Japan and overseas as the number of COVID-19 cases declined. In Japan, especially, there were signs of movement toward the normalization of social and economic activity after priority measures to prevent the spread of COVID-19 were lifted on March 21, 2022, and the risk of severe cases from mutant strains diminished. Nevertheless, the outlook remains uncertain due to a sharp rise in infections in Japan since July of this year, the prolonged conflict in Europe, and concerns about downside risks to the economy due to fluctuations in financial and capital markets.
The current fiscal year is set as the second year of the three-yearmedium-term management plan "Creating and Challenging for our Future" concluding in the fiscal year ending March 31, 2024, and we continue to implement various initiatives based on the three pillars of this plan: (1) corporate culture reform, (2) initiation and completion of domestic and overseas structural reforms, and (3) planting the seeds for regrowth strategies and growth markets.
In the first quarter of the current fiscal year, three new directors were appointed at the annual general meeting of shareholders held in June 2022, and a new management structure was initiated. In Japan, a major reorganization was implemented in April, including the consolidation of the licensing division, and the Company is pushing ahead with the strengthening its profit-earning structure following the product sales business, which we began to strengthen the earnings structure in the previous fiscal year. We have steadily implemented the three pillars of the plan both in Japan and overseas, including the conclusion in June of a master licensee contract in China for the next fiscal year and beyond.
In terms of sales, in Japan, both the brick-and-mortar stores and theme parks were able to operate normally for the entire period, including Golden Week, for the first time in three years. Moreover, the resumption of in-store events and live concerts as well as the acquisition of new licensing contracts led to a significant increase in overall sales. In addition, each overseas region performed well, resulting in a major year-on-year increase in sales.
In addition, the membership of Sanrio+, an application for Sanrio fan members, continued to grow steadily after surpassing the one million mark in October 2021 to reach 1,240,000 members as of the end of June 2022.
As for consolidated operating profit, the Company posted a significant increase due to sales growth both in Japan and overseas, as well as improved sales profitability resulting from a lower cost of sales ratio due to progress in structural reforms.
As a result of these factors, sales rose 28.0% year-on-year to 13.8 billion yen, operating profit was 2.3 billion yen (following an operating loss of 59 million yen in the same period of the previous year), and ordinary profit rose 2,341.8% year-on-year to 2.5 billion yen. As disclosed today, net profit attributable to owners of parent fell 68.2% year-on-year to 0.7 billion yen due to additional taxes (including local taxes) of around 1.3 billion yen imposed as a corrective by the Tokyo Regional Taxation Bureau, of which 1.2 billion yen was recorded as income taxes for prior periods.
Moreover, the former non-consolidated subsidiary SANRIO SOUTHEAST ASIA PTE. LTD. (incorporated in Singapore) is included in the scope of consolidation from the first quarter of the current fiscal year due to its increased importance. Since the accounting period for all overseas consolidated subsidiaries runs from January to December, the first quarter under review for these subsidiaries covers the period from January to March 2022.
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Sanrio Company, Ltd. (8136) Financial Results for the First Quarter of FY2022 | |||||||||||
Reportable Segment | (100 millions of yen) | ||||||||||
Sales | Segment profit (operating profit) | ||||||||||
First three months of | FY2021 | FY2022 | Increase/ | Change | FY2021 | FY2022 | Increase/ | Change | |||
decrease | (%) | decrease | (%) | ||||||||
Product sales/others | 59 | 73 | 14 | 23.9 | |||||||
Japan | Royalties | 20 | 22 | 1 | 7.2 | 1 | 17 | 16 | 1,228.1 | ||
Total | 80 | 95 | 15 | 19.5 | |||||||
Product sales/others | 0 | (0) | (0) | - | |||||||
Europe | Royalties | 3 | 4 | 0 | 19.4 | (0) | (0) | 0 | - | ||
Total | 3 | 4 | 0 | 16.4 | |||||||
North | Product sales/others | 2 | 4 | 1 | 56.6 | ||||||
Royalties | 3 | 7 | 4 | 132.1 | (1) | 1 | 2 | - | |||
America | |||||||||||
Total | 5 | 11 | 5 | 96.6 | |||||||
Latin | Product sales/others | 0 | 0 | 0 | 519.1 | ||||||
Royalties | 0 | 1 | 0 | 60.8 | 0 | 0 | 0 | 268.0 | |||
America | |||||||||||
Total | 0 | 1 | 0 | 70.1 | |||||||
Product sales/others | 1 | 1 | (0) | (34.1) | |||||||
Asia | Royalties | 15 | 23 | 8 | 53.5 | 6 | 10 | 4 | 72.7 | ||
Total | 17 | 25 | 7 | 44.6 | |||||||
Adjustment | - | - | - | - | (5) | (5) | 0 | - | |||
Product sales/others | 64 | 79 | 15 | 23.6 | |||||||
Consolidated Royalties | 43 | 59 | 15 | 34.4 | (0) | 23 | 24 | - | |||
Total | 108 | 138 | 30 | 28.0 |
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.
Explanation of Consolidated Forecasts and Other Forward-looking Statements
First-quarter operating profit exceeded the figures in the first-half consolidated earnings forecast as sales rose on the back of a recovery in overseas and domestic demand and the cost of sales ratio fell due to the implementation of structural reforms in line with the medium-term management plan. Although the outlook for the full year remains uncertain due to a resurgence of infections from the new COVID strain, we expect business performance to remain strong into the second quarter and beyond. Accordingly, we have revised the consolidated earnings forecasts for the first half and full year of the fiscal year ending March 31, 2023, which we announced on May 13, 2022.
Please refer to the "Notice Regarding Revisions to Forecasts for First Half and Full Year for the Fiscal Year Ending March 31, 2023 and Revisions to Dividend Forecasts" announced today (August 2, 2022).
We will continue to closely monitor the economic environment and market trends while striving to appropriately disclose our earnings forecasts.
The revised consolidated full-year forecast projects an operating profit of 4.7 billion yen, which is expected to exceed the figures in the medium-term management plan for the fiscal year ending March 31, 2024, the final year of the plan. In response, the Company has begun revising the plan's target figures.
We will consider new target figures for the medium-term management plan while carefully monitoring the progress of future business performance and changes in the business environment. We plan to make a new announcement as soon as the figures are finalized.
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Sanrio Company, Ltd. (8136) Financial Results for the First Quarter of FY2022 | |||||||||||||
Reference: Overseas Sales and Profits for the Past Three Years by Area | (Millions of yen) | ||||||||||||
Sales to customers | Operating profit | ||||||||||||
Three months | Jun. | Jun. | Jun. | Jun. | Jun. | Jun. | |||||||
ended | Change | Change | Change | Change | |||||||||
Areas | 2020 | 2021 | 2022 | 2020 | 2021 | 2022 | |||||||
(%) | (%) | (%) | (%) | ||||||||||
Germany | 160 | 228 | 42.5 | 296 | 30.0 | (169) | (97) | - | (70) | - | |||
Europe | UK | 89 | 136 | 52.0 | 127 | (6.4) | (50) | 27 | - | 6 | (75.3) | ||
Subtotal | 249 | 364 | 45.9 | 424 | 16.4 | (220) | (69) | - | (63) | - | |||
North | USA | 314 | 589 | 87.4 | 1,158 | 96.6 | (355) | (175) | - | 121 | - | ||
America | |||||||||||||
Latin | Brazil/Chile | 103 | 77 | (25.1) | 131 | 70.1 | 4 | 7 | 74.7 | 29 | 268.0 | ||
America | |||||||||||||
Hong Kong | 433 | 369 | (14.8) | 277 | (25.0) | 134 | 117 | (12.2) | 58 | (50.4) | |||
Taiwan | 261 | 263 | 0.8 | 306 | 16.3 | 87 | 75 | (13.8) | 90 | 19.3 | |||
Asia | South Korea | 135 | 108 | (19.4) | 213 | 96.4 | 14 | 5 | (59.5) | 48 | 735.5 | ||
China | 440 | 997 | 126.7 | 1,483 | 48.6 | 194 | 429 | 120.8 | 853 | 98.8 | |||
Singapore | - | - | - | 234 | - | - | - | - | 35 | - | |||
Subtotal | 1,270 | 1,740 | 37.0 | 2,515 | 44.6 | 430 | 628 | 45.9 | 1,085 | 72.7 | |||
Total | 1,938 | 2,771 | 43.0 | 4,230 | 52.6 | (140) | 391 | - | 1,172 | 199.8 |
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