Tohokushinsha Film CorporationTSE: 2329

March 2024 term Information Session on the Full-year Financial Report （4,832KB）

· Issued by Tohokushinsha Film Corporation

Security Code: 2329

Tohokushinsha Film Corporation

Summary of Financial Results

for the Fiscal Year Ended March 31, 2024

- Japanese GAAP, Consolidated Results -

June 20, 2024

Results - Forecast Summary

[FY2023 Results]

[FY2024 Forecast]

Net sales of ¥52.8 billion (-5.5% YoY) and Operating income of ¥2.7 billion (-36.3% YoY), resulted in a decrease in both sales and profits.

Sales and profits of advertising production increased, but content production was the main factor for a decrease in sales and profits.

Including a decrease in sales (-¥1.0 billion) due to a change of the fiscal year end and business transfers. Net sales of ¥46.0 billion (-12.8% YoY) and Operating income of ¥2.2 billion (-19.2% YoY)

Including a ¥6.5 billion decrease in sales due to the sale of businesses (supermarket and Star Channel)

Unit: Millions of yen

Net sales

Cost of sales

SG&A expenses

Operating income

FY2023 Results

FY2024 Forecast 60,000

YoY

Against projection

YoY

made during period

50,000

-3,102

-353

-6,774

52,819

46,045

[-5.5%]

[-0.7%]

[-12.8%]

-1,140

-5,163

39,018

33,855

40,000

[-2.8%]

[-13.2%]

-438

-1,095

11,122

10,027

[-3.8%]

[-9.8%]

30,000

2,678

-1,523

-270

2,163

-514

[-36.3%]

[-9.2%]

[-19.2%]

14,000

*The "Accounting Standard for Revenue Recognition" has been applied from FY2021

52,800

52,700

55,900

52,800

46,000

12,000

10,000

8,000

Operating margin

Non-operating income

Ordinary income

Recurring margin

Extraordinary income (loss)

Net income before tax

Net income after taxes

Net margin

5.1%

-1,082

4.7%

+1,005

20,000

-463

[-]

541

[-]

2,214

-2,605

-1,199

2,705

+490

[-54.1%]

[-35.1%]

[+22.1%]

10,000

4.2%

5.9%

1,930

+1,663

4,358

+2,427

4,145

-941

7,063

+2,917

0

4,021

+887

+622

5,098

+1,076

[+28.3%]

[+18.3%]

[+26.8%]

7.6%

11.1%

2,300

2,700

4,100

5,500

3,000

4,200

4,800

3,100

2,600

2,200

4,000

2,100

2,700

5,000

800

FY2020

FY2021

FY2022

FY2023

FY2024

(Forecast)

6,000sales

Net 4,000

Operatingincome2,000Ordinaryincome

Net income after taxes

0

1

FY2023

Overview of Financial Results

The "Accounting Standard for Revenue Recognition" has been applied from FY2021, based on

which this Overview of Financial Results has been prepared.

At the Company, the principal change in accounting for sales from various types of agency

transactions is a move from gross amounts to net amounts.

Consolidated

FY2023: Results - P/L Highlights

Net sales: ¥52.8 billion / Operating income: ¥2.7 billion

Ordinary income: ¥2.2 billion (-¥2.6 billion YoY),

Net income after taxes: ¥4.0 billion (+¥0.9 billion YoY)

Impact of gain on sale of businesses, real estate, and marketable securities was significant.

FY2023 Results

Unit: Millions of yen

Against projection

YoY made during period

-3,102

-353

Net sales

52,819

[-5.5%]

[-0.7%]

-1,140

Cost of sales

39,018

[-2.8%]

-438

SG&A expenses

11,122

[-3.8%]

[-36.3%]

[-9.2%]

Operating income

2,678

-1,523

-270

Operating margin

5.1%

-1,082

-463

Non-operating income

[-]

Ordinary income

2,214

-2,605

-1,199

[-54.1%]

[-35.1%]

Recurring margin

4.2%

Extraordinary income (loss)

1,930

+1,663

Net income before tax

4,145

-941

Net income after taxes

4,021

+887

+622

[+28.3%]

[+18.3%]

Net margin

7.6%

[Non-operating income]

-¥0.46billion

Breakdown

-¥0.91billion

• Loss on investments in partnership

  • Large reaction to +¥250 million in gain on investments in the previous fiscal year

• Loss on investments in partnership

-¥0.12billion

[Extraordinary income]

+¥2.69 billion

Breakdown

• Gain on sale of supermarket business

+¥1.64 billion

• Gain on sale of real estate in Yagenzaka +¥0.86 billion

• Gain on sale of securities

+¥0.15 billion

[Extraordinary income]

-¥0.76billion

• Impairment loss on fixed assets

-¥0.63billion

• Additional allowance for voluntary retirement

-¥0.08billion

3

Consolidated

FY2023: Results - B/S Highlights

Total assets ¥97.8 billion (YoY +¥0.7 billion)

Cash and deposits +¥8.1 billion, due to sale of businesses and real estate, in addition to cash provided by operating activities.

Unit: Millions of yen

Total Assets

Current assets

Cash and deposit

Assets

Trade notes &

accounts receivable

Entertainment content

exploitation rights

Work in progress

Fixed assets

Tangible fixed assets

Intangible fixed assets

Investments and other assets

Assets

Liabilities

Current liabilities

Liabilities/Net

Fixed liabilities

Net assets

Capital stock

Capital surplus/

retained earnings

Treasury earnings

Other comprehensive income

FY2022

FY2023

YoY

Share

Share

97,148

97,871

+723

100.0%

100.0%

58,554

60.3%

62,124

63.5%

+3,569

37,583

45,710

+8,126

14,410

10,704

-3,706

2,799

2,368

-430

2,105

2,255

+149

38,593

39.7%

35,747

36.5%

-2,846

20,107

17,555

-2,552

2,944

2,387

-557

15,540

15,804

+263

19,201

19.8%

15,451

15.8%

-3,749

14,087

12,367

-1,720

5,113

3,084

-2,029

77,946

80.2%

82,419

84.2%

+4,473

2,487

2,487

±0

72,075

75,225

+3,149

-1,728

-1,728

±0

4,402

5,588

+1,185

Points

■ Increase in cash and deposits

+¥8.1 billion

Operating CF

(+6.1 billion)

Sale of real estate

(+1.4 billion)

Sale of the supermarket business

(+2.8 billion)

Repayment of interest-bearing debt and

payment of dividends

(-2.0 billion)

■ Tangible fixed assets

-¥2.5 billion

Sale of real estate

(-1.4 billion)

Divestiture and transfer of business

(-0.3 billion)

Impairment of fixed assets

(-0.6 billion)

■ Investments and other assets

+¥0.3 billion

Gain on valuation of listed shares

(+1.0 billion)

Loss on investments in investment

partnerships

(-0.6 billion)

■ Decrease in current liabilities

Decrease in accounts payable

-¥1.4 billion

■ Decrease in fixed liabilities

Decrease in long-term liabilities

(transferred to short-term liabilities)

-¥0.4 billion

Deferred tax liabilities

-¥1.3 billion

■ Equity ratio: 83.3%

Dividend paid

-¥0.9 billion

Net income after taxes

+¥4.0 billion

Foreign currency translation adjustment

+¥0.6 billion

4

Consolidated

FY2023: Cash Flow Highlights

Cash and cash equivalents: ¥43.3 billion (difference from the beginning of the year: +¥8.1 billion).

Mainly due to an increase in cash provided by operating and investing activities

Operating CF: +¥6.1 billion: In addition to recording profits, collection of accounts receivable progressed due to shortened payment periods at client companies.

Investment CF: +¥4.1 billion; Financing CF: -¥2.1 billion

Unit: Millions of yen

FY2022

FY2023

2023年3月期（通期）

2024年3月期（通期）

(From April 1, 2022 to

(From April 1, 2023 to

4月1日～3月31日

4月1日～3月31日

March 31, 2023)

March 31, 2024)

Net income before tax

5,087

4,145

減Depreciation価償却費 and amortization

1,306

1,245

Equity in losses (earnings) of affiliates

65

139

持分法による投資損益（△は益）

Activities:

Decrease (Increase) in operating

Increase (Decrease) in operating payables

売receivables上債権の増減額(△は増加）

1,277

3,455

Loss (Gain) on sales of shares of

-269

-640

関係会社株式売却損益（△は益）

subsidiaries and associates

減損損失Impairment loss

0

630

営業

仕入債務の増減額(△は減少)

-1,547

-1,045

Loss (Gain) on sale of investment

Operating

投securities資有価証券売却損益（△は益）

0

-150

Gain on sale of property, plant and

0

-1,903

equipment

有形固定資産売却益

その他Others

164

1,654

Subtotal

6,085

7,531

Interest, corporate tax, etc.

Net cash flows fromCFoperating計 activities

-1,429

4,655

-1,444

6,087

定Balance期預金ofに関timeするdeposit収支

Investing Activities:

有Balance形固定of資産tangibleに関すfixedる収assets支

Others

無形固定資産に関する収支Balance of intangible fixed assets

投資

Balance of investment securities

投資有価証券に関する収支

Proceeds from the sale of shares of subsidiaries

連結の範囲の変更を伴う子会社株式の売却による収入

resulting in a change in scope of consolidation

その他

CF計

Net cash flows from investing activities

Financing Activities:

短Balance期/長期of借short/long入に関す-るterm収支loans payable

リRepaymentース債務のof返lease済によobligationsる支出

財務 配Cash当金dividendsの支払額paid そOthersの他

Net cash flows fromCF計financing activities

-45-1,187-91-230394 -63

-1,223

-229-235-872-5

-1,341

80

2,856 -80 115 994 95

4,062

-1,086-207-874-5

-2,173

Cash

equivalents:

and

現金

cash

等

Cash and cash equivalents期初残at高beginning of period

After conversion: Increase

Cash and cash equivalents at end of period

33,037

2,250

35,288

35,288

8,055

43,343

5

Consolidated

FY2023: Comparisons to Previous Year and Projections Made at 1H of the Period

YoY:

Advertising production achieved an increase in sales and profits, and retail/merchandising also secured

an increase in profits. However, content production, broadcasting business, and IP business were the

main factors in a decrease in both sales and profits.

Comparison with projections: Content production was the main factor in a decrease in both sales and profits. Broadcasting business contributed to an increase in profits, but IP business saw a decrease in profits.

YoY

Unit: Millions of yen

Net sales

Operating income

FY2022

55,922

4,201

Results

Advertising

+1,231

+314

production

Content

1,316

-1,013

production

Broadcasting

-

-376

business

IP business

1,357

-546

Retail/

1,769

+141

Merchandising

-

-

Administration/

+1,029

-43

elimination

Change

3,102

-1,523

FY2023

52,819

2,678

Results

Against projections made during the period

Unit: Millions of yen

Net sales

Operating income

Projections made

53,173

2,948

during the period

Advertising

+474

-

-153

production

Content

-782

-632

production

Broadcasting

-36

+676

business

IP business

-168

+

-513

Retail/

-92

+141

Merchandising

Administration/

+252

+210

elimination

Change

-353

-270

FY2023

52,819

2,678

Results

6

Consolidated

Advertising Production - Results

Sales and profits increased due to strengthened efforts to win orders, and profit margin

increased year-on-year due to reductions in costs of sales and SG&A expenses. Orders received were strong in both commercial production and sales promotion.

Full year

results

Unit: Millions of yen

+1,231 [+4.7%]

+474 [+1.8%]

Unit: Millions of yen

+314 [+15.5%]

Full year

-153[-6.2%]

results

Net sales by sub-segment

Orders received were strong, due to winning orders at the end of FY2023.

Despite an increase in personnel expenses due to a review of employee benefits, profit margins have been improving due to improved precision in orders received/profit management.

Sales and profits increased due to the expansion of direct clients, the receipt of large orders, etc.

Increase in sales due to a change of the fiscal year end of Enjin Inc. (+¥0.5 billion for 3 months)

Commercial production

Sales promotion

25,000

6,000

20,707

21,395

22,354

22,693

22,851

5,000

20,000

Full

year

4,000

15,000

13,540

12,575

13,052

14,479

14,638

3,000

10,000

2,000

2H

5,000

Forecast

Forecast

1,000

Result

Result

7,167

8,819

9,301

8,213

8,213

1H

0

FY2020

FY2021

FY2022

Forecast

Result

0

FY2023

FY2023

FY2023

4,501

4,834

5,236

1,661

2,190

2,641

2,187

2,589

983

1,286

678

904

1,860

2,647

2,647

FY2020

FY2021

FY2022

Forecast

Result

7

FY2023

Consolidated

Content Production - Results

Sales and profits decreased due to weak production of dubs and subtitles, as well as

production of TV programs

Net sales by sub-segment

Net sales Unit: Millions of yen

-1,316[-9.7%]

Full year

-782[-6.0%]

results

Operating income Unit: Millions of yen

Largely affected by a decrease in production for the group channels.

Sales decreased year-on-year and were less than the forecast partly due to a reactionary decrease in orders received in productions for theaters, which were strong in the previous year.

Business restructuring continues. Recorded impairment loss on fixed assets.

Sales decreased year-on-year and were less than the forecast due to a reactionary decrease in orders received in streaming services, which were strong in the previous year, as well as a significant decrease in orders received resulting primarily from the impact of the Hollywood strikes.

Full year

2H

1H

FY2020

FY2021

FY2022

Forecast

Result

FY2023

-1,013[-64.2%]

Production of movies

Digital production

and TV programs

Full year

-632[-52.8%]

4,000

6,000

results

2,6931,290

2,986

2,931

2,317

2,161

4,9522,869

5,5753,192

5,3272,988

5,3933,118

3,2025,476

3,500

Full

5,000

Full

year

year

3,000

4,000

2,500

2,000

3,000

2H

2H

1,500

1,955

140-

2,092

1,525

1,368

2,000

1H

1,000

FY2020

FY2021

FY2022

Forecast

Result

1H

1,403

1,031

839

792

792

1,000

2,382

2,339

2,274

2,274

2,083

500

FY2023

0

Forecast

Result

0

Forecast

Result

FY2020

FY2021

FY2022

FY2020

FY2021

FY2022

FY2023

FY2023

Production of

dubs and subtitles

6,000

5,000

5,231

5,169

4,000

4,248

4,867

4,497

3,000

2,541

2,590

2,939

2,267

2,221

2,000

1,000

2,027

2,325

2,640

2,229

2,229

0

FY2020

FY2021

FY2022

Forecast

Result

8

FY2023

Consolidated

Broadcasting Business - Results

Despite a decrease in sales and profits year-on-year, profits were higher than the forecast due

to thorough cost reductions.

Net sales

Unit: Millions of yen

-920[-7.7%]

Full year

-36[-0.3%]

results

Full year

Forecast

FY2023

Operating income Unit: Millions of yen

-376[-21.2%]

Full year

results +676 [+93.6%]

-276

Forecast

FY2023

Operating performance

• Results almost in line with the forecast

  • Decrease in commissioned projects due to the termination of 4K broadcasting and OTT business during the previous fiscal year. Business development projects were also sluggish.
  • Despite continued trend of declining subscriptions, profits were secured through reductions in program production and sales promotion expenses, etc.
  • Impacted by the exclusion of The Cinema, which was transferred in the previous term, from the consolidation (for 6 months).
  • Impacted by change of fiscal year end
    • Star Channel and Igo Shogi Channel: Contributed to an increase in sales.
    • Family Gekijyo: Contributed to a decrease in sales because results for 3 months had been added to the previous year's financial results.

9