Columbia Music Entertainment
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February 3, 2014 Press Release Nippon Columbia Issues Notice of Consolidated Business Results for Third Quarter of Fiscal Year Ending March 2014 Nippon Columbia Co., Ltd. (hereinafter the Company; Head Office: Minato-ku, Tokyo; Representative Director/President and Chief Operating Officer (COO): Yasuharu Hara) today gives notice that it has issued its consolidated business results indicating the Company’s overall performance for the second quarter of the fiscal year ending March 31, 2014 (April 1 ~ December 31, 2013). Consolidated Business Performance for Third Quarter FY2013 The Japanese music market continues to face a difficult business environment. During the period from January to December 2013, the total production of music titles including music videos decreased by 13% year on year. In addition, during the period from January to September 2013 (latest available information), sales of paid music downloads decreased by 24% compared year on year (Recording Industry Association of Japan survey). 1. Sales Revenue As of the end of the third quarter under review, the Company’s cumulative consolidated sales revenue totaled 10,303 million yen (a decrease of 6.3% year on year). The main reasons for this result were that while Animation-related, Classical and J-Pop titles sold strongly in the Physical/Digital Distribution Business segment, there was a steep decline in revenue in line with cooling consumer interest in Game titles, which had sold favorably during the same period of the previous fiscal year, while the Direct Sales Business continued to reflect the difficult business environment with declining sales of products to other mail order companies. 2．Profit and Loss Regarding the profit & loss situation, in line with active investment toward the creation of the next generation of artists in the Physical/Digital Distribution Business and active sales promotion activities aimed at obtaining new clients in the Direct Sales Business, the Company recorded a consolidated operating profit for the quarter under review of 139 million yen (compared with a profit of 496 million yen for the same quarter of the previous fiscal year). In addition, the Company reported an ordinary profit of 142 million yen (compared with an ordinary profit of 472 million yen for same quarter of the previous fiscal year) and a net profit for the quarter under review of 124 million yen (compared with a net profit of 364 million yen for the same quarter of the previous fiscal year). 1 February 3, 2014 The Company’s performance on a segment basis is as follows. <Sales/Digital Distribution Business> Although Animation-related titles sold strongly, a steep decline in revenue in line with the cooling of consumer interest in Game software titles, which sold favorably during the same quarter of last year, resulted in sales revenue for this segment of 7,501 million yen (an decrease of 6.3% year on year). Also, after taking into account the channeling of active advance investment toward the creation of the next generation of artists, this segment recorded an operating profit of 929 million yen (compared with a profit of 1,122 million yen for the same quarter of the previous fiscal year). <Direct Sales Business> Reflecting the difficult business environment, and in line with declining product sales to other mail order companies, this segment recorded sales revenue of 1,480 million yen (a decrease of 16.6% year on year). Also, due mainly to an increase in sales promotion activities aimed at obtaining new clients, the Company recorded an operating profit of 659 million yen (compared with a profit of 818 million yen for the same quarter of the previous fiscal year), <Other Businesses> The Other Businesses segment recorded sales revenue of 1,321 million yen (an increase of 8.4% year on year) and an operating profit of 220 million yen (compared with a profit of 166 million yen for the same quarter of the previous fiscal year). The Columbia Group regards the achievement of continuous profitability as its most important business challenge, and to this end the Company is implementing a variety of measures that include focusing its management resources onto fields of expertise and fields of growth, optimizing the size of the workforce and cutting costs. The music and visual-related industries are continuing to face a difficult business environment. But despite this situation, by concentrating its management resources on the Physical/Digital Distribution Business, centered on the core music production operations, and on the Direct Sales Business, and also by making use of sound sources and pursuing new businesses derived from both of these business segments, the Company will further improve its business efficiency and profitability. For this reason, the Company carried out an organizational reform in January 2014 to create the A&C Division as a means of strengthening its artist curation and communication forces. This reform will aid the Company in its attempt to reinforce its artist fostering activities and create more new hit songs by unifying its efforts. In addition, by introducing a independent “units” within the A&C Division, the Company will try to realize both a financially independent department operation and more flexible organizational operation. 2 February 3, 2014 Moreover, by building up its strategic partnership with Faith as a member of the Faith Group, the Company will promote approaches to new styles of music distribution in an effort to improve its line-up of music-related services and move forward with its plans to realize business synergies within the Faith Group. Full Year Consolidated Business Result Forecast for FY2013 (Ending March 2014) The Columbia Group’s current forecast for FY2013 (the fiscal year ending March 2014) is for sales revenue of 15 billion yen, an operating profit of 350 million yen, an ordinary profit of 330 million yen, and a net profit of 260 million yen. These figures are unchanged from the forecast issued on May 14, 2013. Artists and Titles Making Major Contributions to Sales <Sales/Digital Distribution Business> ■ Music Products Kiyoshi Hikawa— Hikawa Kiyoshi Enka Meikyoku Collection 18 ~ Shigure no Minato~, Hikawa Kiyoshi Enka Meikyoku Collection 19 ~Manten no Hoshi~, Shigure no Minato, Manten no Hoshi Chiyoko Shimakura— Chiyoko Shimakura Zenkyoku Shu 2013, Karatachi no Komichi Kenji Niinuma— Furusato wa Ima mo Kawarazu, Ima Kitayo THE IDOLM@STER Series Zyuden Sentai Kyoryuger Series sweet ARMS (Iori Nomizu, Misuzu Togashi, Kaori Sadohara, Misato)— TV Animation “Date A Live” Opening Theme “Date A Live” Pheromen— IMMORAL WEDDING/Silent Carnival Inai Inai Baa! Series 2013 Pop Hit March ~Kaze ga Fuiteiru~ 2355/0655 Song Best! Mamoru Samuragouchi— Symphony No.1 "HIROSHIMA", Chaconne Samuragouchi Mamoru Gengaku Sakuhin Shu, Chinkon no Sonata Furusato no Minyo Dai 53 Shu THE YELLOW MONKEY— YEMON—FAN’S BEST SELECTION Not yet— Hirihiri no Hana Good Morning America— Mirai e no Spiral Ayano Uema— Solange, Niraikanai the dresscodes— Tautology palet— Believe in Yourself! 3 February 3, 2014 ■ Video Products Kiyoshi Hikawa— Hikawa Kiyoshi Special Concert 2012 Kiyoshikonoyoru Vol. 12, Manten no Hoshi Eriko Nakamura, Akiko Hasegawa, Asami Shimoda, Azumi Asakura, Yumi Hara, Manami Numakura, Mayako Nigo, Naomi Wakabayashi and Juri Takita— THE IDOLM@STER MUSIC FESTIV@L OF WINTER!! Genki Genki Nontan Spoon Tan Tan Tan Inai Inai Baa! Series Miitsuketa! Series ■ Digital Distribution Not yet— Hirihiri no Hana Yo Hitoto— Hanamizuki Kaela Kimura— Butterfly sweet ARMS (Iori Nomizu, Misuzu Togashi, Kaori Sadohara, Misato)— TV Animation “Date A Live” Opening Theme “Date A Live” Zyuden Sentai Kyoryuger Series Mamoru Samuragouchi— Symphony No.1 <<HIROSHIMA>> ■ Video Game Products Nintendo 3DS Software Hoppechan: Tsukutte! Asonde! Punipuni Town!! Kobito Zukan Kobito no Fushigi Jikken Set( <Direct Sales Business> Enka no Hanamichi Misora Hibari Cover Song Collection Uta wa Yo ni Tsure, Showa Kayo Ogon Jidai <Others> P&D (Production & Distribution) ◇ YOSHIMOTO R and C Co., Ltd. Pokota— Takaramono, be foolish/// YU-A— SINGLE COLLECTION ◇ Ward Records Inc. The Rolling Stones— Sweet Summer Sun - Hyde Park Live 2013 4 February 3, 2014 ◇ Yamaha Music and Visuals Inc. Paul McCartney and Wings— Rockshow ◇ OMAGATOKI Co., Ltd. HR— Zenryoku Jump! ■ Company Outline Company Name: Nippon Columbia Co., Ltd. Address: Edomizaka Mori Bldg., 4-1-40 Toranomon, Minato-ku, Tokyo Representative: Representative Executive Officer/President & COO Yasuharu Hara Business contents: Production, advertising and sales of audio, video and game software, etc., and music artist management Paid-in capital: ¥1,000,000,000 URL: http://columbia.jp ■ For further information concerning this subject please contact: Nippon Columbia Co., Ltd. Chikayo Suzuki, Finance and Administration Division Telephone: 03-6895-9870 Facsimile: 03-6895-9116 Email: [email protected] ### 5 .