August 9, 2013

Press Release

Nippon Columbia Issues Notice of Consolidated Business Results for First 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 first quarter of the fiscal year ending March 31, 2014 (April 1 ~ June 30, 2013).

Consolidated Business Performance for FY 2013 (Ending March 2014)

1. Sales Revenue During the first quarter under review, the Company’s consolidated sales totaled 3,098 million yen (an increase of 1.0% compared with the same quarter of the previous fiscal year). The main reasons for the overall rise in the Company’s sales revenue were the contributions from improved sales of Animation and Classical titles in the Sales/Digital Distribution Business and from favorable sales of major titles by the Company’s US music production subsidiary.

2．Profit and Loss Regarding the profit & loss situation, in the Sales/Digital Distribution Business, products launched during the previous fiscal year contributed to current year’s high-margins and accounted for a high percentage of sales. Also the performance of the Direct Sales Business similarly benefited from transactions utilizing high-margin sound sources. Consequently, the Company recorded an operating loss for the first quarter under review of 6 million yen (compared with an operating loss of 117 million yen for the same quarter of the previous fiscal year), and an ordinary loss of 8 million yen (compared with an ordinary loss of 122 million yen for same quarter of the previous fiscal year). Also, as a result of reversal of 43 million yen in corporate tax payments, resulting from loss on an affiliated company’s stock evaluation, the Company recorded a net profit of 24 million yen (compared with a net loss of 131 million yen for the same quarter of the previous fiscal year).

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The Company’s performance on a segment basis is as follows.

Although sales of Animation and Classical titles increased, overall sales of the Sales/Digital Distribution Business declined to 2,137 million yen (a decrease of 3.1% compared with the same period of previous fiscal year). However, products launched during the past year contributing to current year’s high-margins accounted for a larger portion of total sales, this segment recorded an operating profit of 195 million yen (compared with a profit of 172 million yen for the same period of the previous fiscal year).

Reflecting the increasingly difficult business environment, the sales performance of the Direct Sales Business segment declined compared with the same period of the previous fiscal year. Sales of products to other mail order companies declined year on year, with the result that this business recorded sales of 448 million yen (a decrease of 2.7% year on year). However, due an increase in transactions involving the use of high-margin sound sources, this segment recorded an operating profit of 207 million yen (compared with a profit of 187 million yen for the same quarter of the previous fiscal year).

The Other Businesses segment recorded sales revenue of 512 million yen (an increase of 27.9% year on year) and an operating profit of 124 million yen (compared with a profit of 72 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 continuing its focus on cost reduction. The music and visual-related industries are continuing to experience a difficult business environment. But despite this situation, by concentrating its management resources on the Sales/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. In addition, in the interests of strengthening its product lineup, the Company is scheduled to obtain 100% shareholdings in Omagatoki Co., Ltd. and Sirius Co., Ltd. on October 1, 2013, both of which are currently subsidiaries of Shinseido Co., Ltd.

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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 continue with its efforts realizing business synergies within the Faith Group.

Full Year Consolidated Business Result Forecast for FY 2013 (Ending March 2014) The Columbia Group’s current forecast for FY 2013 (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 ■ Music Products Kiyoshi Hikawa— Hikawa Kiyoshi Enka Meikyoku Collection 18 ~Shigure no Minato~, Shigure no Minato Kenji Niinuma— Furusato wa Ima mo Kawarazu Maiko Takigawa— Kita No Yukibune Kumiko— Sayonara wo Ageru THE IDOLM@STER Series Zyuden Sentai Kyoryuger Series Sweet ARMS (Iori Nomizu, Msuzu Togashi, Kaori Sadohara, Misato)— TV Animation “” Opening Theme “Date A Live” Jitsuyo Best NHK-CD Radio Taiso Daiichi/Daini Min-na no Taiso Inai Inai Baa! Series Mamoru Samuragouchi— Symphony No.1 "HIROSHIMA", “Chaconne Samuragouchi Mamoru Gengaku Sakuhin Shuu” Hiroko Koda— Furusato ~Nihon no Uta~ Furusato no Minyo Dai 53 Shu Chiharu Matsuyama— Yume Yaburete Nao Ayano Uema— Solange Good Morning America— Mirai e no Spiral clammbon— LOVER ALBUM 2

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■ Video Products Kiyoshi Hikawa— Hikawa Kiyoshi Special Concert 2012 Kiyoshikonoyoru Vol. 12 Genki Genki Nontan Spoon Tan Tan Tan Inai Inai Baa! Series Miitsuketa! Series Nazo no Shin Unit Starmen— Herosuta. Oomori Aji

■ Digital Distribution Kaela Kimura— Ring a Ding Dong, Butterfly Yo Hitoto— Hanamizuki THE IDOLM@STER Series Zyuden Sentai Kyoryuger Series Mamoru Samuragouchi— Symphony No.1 "HIROSHIMA"

■ Video Game Products Nintendo 3DS Software Mamegoma Happy! Sweets Farm Kobito Zukan Kobito Kansatsu Set

Enka no Jidai ~Nakiwarai ~Ichiokunin no Enka/Kayokyoku~ Uta wa Yo ni Tsure, Showa Kayo Ogon Jidai Enka no Hanamichi

P&D (Production & Distribution) ◇ YOSHIMOTO R and C Co., Ltd. The Boom— Sekai de Ichiban Utsukushi Shima Pokota— Takaramono ◇ Ward Records Inc. Aerosmith— Rock for the Rising Sun Whitesnake— Made in Japan ~ Live at Loud Park 11 Dio— Finding The Sacred Heart - Live in Philly 1986 ◇ Yamaha Music and Visuals Inc. Paul McCartney and Wings— Rockshow

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■ 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 Division Telephone: 03-6895-9870 Facsimile: 03-6895-9116 Email: [email protected]

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