July 2018 , 2018 Oriental Land Co., Ltd
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July, 2018 Oriental Land Co., Ltd. This material has been specifically prepared for institutional investors who are not familiar with our company, and is not presentation material for the earnings presentation. CttContents I. Business Outline I-I. Theme Park business I-II. Hotel business I-III. Overview II. Progress of 2020 Medium-Term Plan III. Tokyo DisneySea Large-Scale Expansion Project Cautionary Statement This document includes statements about Oriental Land’s plans, estimates, strategies and beliefs. The statements made that are not based on historical fact represent the assumptions and expectations of Oriental Land in light of the information available to it as of the date when this document was prepared, and should be considered as forward-looking. Oriental Land uses a variety of business measures to constantly strive to increase its net sales and management efficiency. However, Oriental Land recognizes that there are certain risks and uncertainties that should be considered which could cause actual performance results to differ from those discussed in the forward-looking statements. Potential risks could include, but are not limited to, weather, general economic conditions, and consumer preferences. Therefore, there is no firm assurance that the forward-looking statements in this document will prove to be accurate. Theme park attendance figures have been rounded. Financial figures have been truncated. All rights reserved. I. Business Outline Corporate Profile Corporate Data Stock Information Tokyo Stock Exchange, Stock Listing Established July 11, 1960 First Section Code No. 4661 Total Assets ¥915.5 billion [consolidated] Investment Unit 100 shares Shareholders’ Equity ¥721.9 billion Stock Price ¥11,625 [consolidated] JCR : AA [Stable] Aggregate Market Bond Ratings ¥4,227.8 billion R&I : AA- [Stable] Price [As of March 31, 2018] [[y,]As of July 27, 2018] Corporate Mission Business Domain Our mission is to create happiness and contentment “We pursue businesses that fill your heart by offering wonderful dreams with energy and happiness” and moving experiences created with We strive to create new value in a high-value business for enriching and nourishing people’s hearts and original, imaginative ideas appealing to abundant humanity and happiness 4 I. Business Outline History and Business Description History Tokyo Disney Resort 1960 Oriental Land Co., Ltd. [OLC] was established Disney Hotels 䞉Shops and Restaurants Monorail service [under direct management] 䞉Cinema complex, etc provided around OLC and Chiba Prefecture concluded the resort 1962 the Urayasu District Land Reclamation Agreement Disney Ikspiari Ambassador Reclamation work began off the coast of Hotel 1964 Urayasu [completed in 1975] OLC and Walt Disney Productions Tokyo [currently, Disney Enterprises, Inc.] concluded Disneyland Tokyo DisneySea 1979 an agreement on the licensing, design, Hotel Tokyo Disneyland Hotel MiraCosta consttidtruction and operati tifTkDildon ofTokyo Disneyland 1983 Tokyo Disneyland opened Listed on the first section of the Tokyo Tokyo DisneySea 1996 Stock Exchange 2000 Ikspiari and Disney Ambassador Hotel opened Disney Resort Line, Tokyo DisneySea, and 2001 Tokyo DisneySea Hotel MiraCosta opened Tokyo Disney Resort 2008 Tokyo Disneyland Hotel opened Official Hotels Tokyo Bay Milial Resort Hotels Co., Ltd. (MRH) acquired all 2013 stocks of Brighton Corporation Co., Ltd. The only “Sea”-themed The first Disney Theme 2016 Tokyo Disney Celebration Hotel opened Disney Theme Park Park outside of the U.S. in the World Managing and operating a large scale theme resort offering versatile entertainment facilities 5 I. Business Outline License Agreements for Tokyo Disney Resort Basic business alliance agreement concluded between Overview Walt Disney Productions (currently Disney Enterprises, Inc.) and OLC in 1979. 2046 at maximum (45 years since Tokyo DinseySea opened) Period Note: When facilities open as planned, the agreement period can be extended to 2076 at maximum. Activities Management and operation of Tokyo Disney Resort, etc. Covered Consideration Payment of royalties fees based on net sales [yen basis] Relationship with The Walt Disney Company Nocapocaptaoital or pesopersonn el r eatoelation shi pbetwee n OLCa C an d Th e W al t Di sn ey Com pan y Only OLC operates Disney Theme Parks in Japan 6 I. Business Outline 1. Prime Locations 2. Tangibles: Ongoing Investment Strengthened appeal Vast Land Holdings Own approx. 2,000,000 m2 Higher attendance Investment [approx. 500 acres] of land easily figures accessible from central Tokyo Huge Market Increased cash flow Making the facilities more appealing through Approx. 30 million of high income ongggoing investment; Increasing cash flow by households living within 50km [30 miles] attracting more Guests radius 3. Intangibles: Human Resources Ibaraki with Magnificent Hospitality Saitama ிʮ Ҙᓶ Raise the level of Raise the level of Tokyo Guest Satisfaction Emppyloyee Satisfaction ߷ Chibaډᅕ Kanagawa Diverse measures and education/training programs are implemented with as much focus on employee satisfaction as on Guest satisfaction. Establish stable earnings base by implementing structural/non-structural strategies that capitalize on the advantageous location 7 I. Business Outline Net sales and Operating Margin Operating Profit and Profit Consolidated net sales [¥ billion] Consolidated operating profit [¥ billion] Operating margin Consolidated profit attributable to owners of parent [¥ billion] 500.8 473. 5 477.7 479.2 [[Forecast]Forecast] 114.4 466. 2 465. 3 110. 6 113. 1 110.2 113. 4 107.3 [Forecast] 82. 3 81.1 80.0 24.2% 23.7% 23.7% 73.9 [Forecast] 23.1% 23.0% 22.7% 70.5 72.0 [Forecast] 3/14 3/15 3/16 3/17 3/18 3/19 [FY] 3/14 3/15 3/16 3/17 3/18 3/19 [FY] Net sales, operating profit and profit have all remained at high levels 8 I. Business Outline Breakdown by Segment and Content of Segments Results for FY ended 3/18 Consolidated Consolidated net sales: operating profit: ¥479. 2 billion ¥ 110. 2 billion Theme Park Tokyo Disneyland Segment Tokyo DisneySea Tokyo Disneyland Hotel 82.6% 83.3% Hotel Business Tokyo DisneySea Hotel MiraCosta Disney Ambassador Hotel Segment Tokyo Disney Celebration Hotel and others Other Business Ikspiari 13.9% Disney Resort Line 14.8% Segment and others 35%3.5% 1.9% More than 80% comes from the Theme Park Segment 9 I-I. Theme Park Business Annual Theme Park Attendance [million people] Tokyo Disney Resort Tokyo Disney Resort Tokyo Disney Resort 25th Anniversary 30th Anniversary 35th Anniversary Opening of Tokyo DisneySea Tokyo DisneySea Tokyo DisneySea Tokyo DisneySea 5th Anniversary 10th Anniversary 15th Anniversary Tokyo Disneyland Tokyo Disneyland 15th Anniversary 20th Anniversary [Forecast] 31.30 30.00 31.00 [+13.8%] [(0.6)%] [+3.0%] 27.22 Opening of 25.47 25.82 [+7.1%] 25.35 [+2.6%] [+4.2%] [(0.1)%] Tokyo Disneyland 22.05 [+27.4%] 17.46 [YoY +4.6%] 1,746 1,730 1,603 1,651 99. 31, 338 Era of one Theme Park Era of two Theme Parks 3/84 3/02 3/04 3/07 3/09 3/12 3/14 3/17 3/19 [FY] Note: Attendance figures for FY 3/12 and 3/17 decreased from the previous fiscal years respectively because of the influence of earthquakes. Theme Park attendance has increased driven by each anniversary event, exceeding 30 million on a stable basis 11 I-I. Theme Park Business Breakdown of Guests by Region Number and Ratio of Overseas Guests Travelers visitinggp[ Japan [million pp]people] Ratio of overseas Guests coming to our parks among overseas visitors to Japan Overseas 29.77 9.8% 24.82 21.36 Other areas in Annual Attendance Japan 30.10 million people 14.67 26.6% [FY ended March 2018] 10.98 8.71 11.1% 10.3% 9.9% Metropolitan 10.7% 8.5% Area 8.3% 63.6% 3/13 3/14 3/15 3/16 3/17 3/18 [FY] Metropolitan •Largest number of Guests •Increases in tandem with the Area accounting for approx. 60% growing number of tourists Overseas visiting Japan •Mainly Chubu and Koshinetsu regions Others •More Guests can be attracted •TdtTends to grow in ann iversary years fthitfrom this category Stable Theme Park attendance expected to continue based on region-specific Guest attraction strategies 12 I-I. Theme Park Business Net sales per Guest and Breakdown [¥] 11,830 [Forecast] 11,594 11,614 11,257 11,076 10,955 5,350 5,264 5,339 •Ticket receipts per Guest 50075,007 Ticket 4,598 4,660 increase over two years since Receipts ticket price revision Ticket Receipts •Tend to increase in anniversary event years 3,989 4,220 4,185 4,043 3,964 4,074 Merchandise •Development of contents, such as Duffy & Friends series, lead Merchandise to increase in earnings •Stable net sales maintained 22922,292 2, 252 2, 286 22562,256 2, 286 2, 260 Food and Food and regardless of whether or not Beverages Beverages events are held [FY] 3/14 3/15 3/16 3/17 3/18 3/19 Achieved increase in net sales per Guest based on meticulous pricing strategy 13 I-I. Theme Park Business Increase in Theme Park value Ticket price revision policy: Comprehensively consider g Price sensitivity survey result Note: Take ex ternal env ironment inclu ding tax hike into consideration Annual Theme Park attendance [million people] Ticket price [¥] 7,400 6,900 6,200 6,400 5,800 5,500 31.30 31.38 30.19 30.00 30.10 31.00 27.22 27.50 [Forecast] 24.82 25. 47 25. 02 24.77 25. 82 25. 42 25. 82 25. 37 25. 35 22.05 3/02 3/07 3/12 3/15 3/16 3/17 [FY] Ticket price revision in past five years April 1, 2014 ¥6,400 Revision along with consumption tax reform [consumption tax: 5%э8%] Theme PkPark experi ence val ue was i ncreasedb dbitdiy introducing new a tttittractions April 1, 2015 ¥6,900 and entertainment such as “Happiness is Here” and “Once Upon a Time” and restructuring of a show viewing area, etc.