Annual Report 2015 Year Ended March 31, 2015 Business Mission
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Happiness Takes Us Higher Annual Report 2015 Year ended March 31, 2015 Business Mission OLC’s mission is to create happiness and contentment by offering wonderful dreams and moving experiences created with original, imaginative ideas. We are a company constantly embracing our emotions, always with a new perspective of the times that makes us a pioneer of the era. We move toward an ideal without limits, convinced that we will make it there. Imagination is our treasure trove, and imagination may well be Earth’s only inexhaustible resource. Utilizing this asset, we pursue our business of bringing abundant humanity and happiness. In the lives of people today, desires are sometimes surrendered to reality, dreams that they harbor deep in their hearts, moving experiences that uplift their souls, joy that makes life worth living, a true sense of peace that provides them with rejuvenation… It is the mission of OLC to bring all of these to each and every person. Editorial Policy This report has been designed as a communication tool to facilitate understanding with regard to OLC management policies and business strategies among a wide range of readers, including both private and institutional investors. “Happiness Takes Us Higher” is the overall theme of this report. Photographs, charts and tables have been used to illustrate the Company’s operations in a visual manner in the report. Forward-looking statements Forecasts and other forward-looking statements are based on the judgments of management in consideration of information available as of the publishing date of this report. However, the Company’s business is easily influenced by the preferences of Guests as well as by social and economic trends. For this reason, the estimates and forecasts contained in this report may be impacted by unforeseen circumstances. Contents Introduction Management Message Focus P. 4 Business Model and Strengths P.12 Message from the Chairman P.22 Happiness Takes Us Higher P. 6 OLC Group Digest P.14 Interview with the President P.23 1: Continually Evolving Theme Parks P. 8 Eleven-Year Performance P.20 2016 Medium-Term Plan Indicators and Summaries P.27 2: Pursuing Hospitality that Is Unique to Tokyo P.10 Eleven-Year Financial Highlights Disney Resort We describe the characteristics of the OLC The OLC Group’s top managers explain their This section describes initiatives being Group’s businesses in terms of its business thinking on the Group’s management and undertaken on both hard and soft aspects model and strengths, as well as various data. the Company’s mission. They also provide a under the “OLC in 2023” vision and how progress update on the 2016 Medium-Term these can contribute to enhancing Plan among other matters. corporate value going forward. Information Investors’ Information WEB SITE FACT BOOK 2015 http://www.olc.co.jp/en/ir/ OLC’s Fact Book 2015 provides a wide range of long-term, historical data, including financial indicators and quantitative management data. 2 Oriental Land Segment Review Corporate Governance Data Section P.30 Review of Consolidated P.34 Corporate Governance P.44 Message from the Officer Operations in Charge of the Finance/ P.42 Board of Directors, Corporate Accounting Department P.32 Annual Topics Auditors and Corporate Officers P.45 Six-Year Summary P.46 Management’s Discussion and Analysis of Operations P.52 Consolidated Financial Statements P.58 Notes to Consolidated Financial Statements P.74 Independent Auditor’s Report P.75 Corporate Data/Stock Information Here we give overviews of the Theme Park This section includes information on the This section includes a message from the Segment, Hotel Business Segment and structure and basic philosophy of our Officer in Charge of the Finance/Accounting Other Business Segment, and a description corporate governance and an interview with Department and introduces the OLC of annual topics in each. an external corporate auditor. Introductions Group’s financial policies and strategies for of the Company’s directors, corporate enhancing corporate value from a financial auditors and executive officers are also given. aspect. Business results from the fiscal year ended March 31, 2015 are also in this section. CSR Information WEB SITE OLC Group CSR Report Digest 2015 http://www.olc.co.jp/en/csr/ OLC Group CSR Report Digest 2015 provides a wide range of CSR information and data. Annual Report 2015 3 Business Model and Strengths OLC’s Thoughts on Enhancing Corporate Value We view corporate value as “the total sum of the happiness of our Guests.” Based on this belief, we have evolved the theme parks and delivered happiness to Guests. As a result, we have been able to record continuous profit growth. Going forward, we believe we can deliver even more happiness through our core and new businesses, and will under- take large-scale investments to make that a reality. We will create new value and deliver greater happiness. As a result, corporate value will be enhanced for Guests as well as for shareholders. This is the aim of the OLC Group. Business Model Increasing Corporate Value Creating Happiness Business Model Enhance Tokyo Disney Resort value Attract more Guests and increase Guest spending New investments Increase cash flow Business Mission Our mission is to create happiness and contentment by offering wonderful dreams and moving experiences created with original, imaginative ideas. 4 Oriental Land 3 Strengths 1. Outstanding Location • Population of approx. 30 million living Tokyo Disney Resort within a 50-kilometer (30-mile) radius Tokyo Narita Station International Airport Haneda • About 15 minutes by train from Airport Tokyo Station, about 30 minutes by shuttle bus from Haneda Airport and about 60 minutes by shuttle bus 50 km from Narita International Airport radius 2. License from Disney Enterprises, Inc. to Exploit Unrivaled Brand Power License agreement with Disney Enterprises, Inc. Operation of Disney-branded facilities in Tokyo Disney Resort® Royalties Disney Enterprises, Inc. Proportionate to revenues (yen-denominated) OLC has no capital or personnel relationship 3. Magnificent Hospitality Demand for Happiness Raise the Raise the Level of Guest Level of Cast Satisfaction Satisfaction Provision of Happiness Annual Report 2015 5 OLC Group Digest SEGMENT INFORMATION More Than 80% of Net Sales and Operating Income Come from the Theme Parks Breakdown by Segment and Content of Segments Results for FY Ended ’15/3 (Consolidated) Net Sales: Operating Income: ¥466.3 billion ¥110.6 billion Theme Park X Tokyo Disneyland Segment X Tokyo DisneySea 83.1% 86.5% X Tokyo Disneyland Hotel Hotel Business X Tokyo DisneySea Hotel MiraCosta Segment X Disney Ambassador Hotel and others Other Business X Ikspiari 13.1% 11.9% Segment X Disney Resort Line and others 3.8% 1.4% ADVANTAGE IN THE MARKET No.1 in Domestic Market & Theme Park Attendance Oriental Land’s Share in Domestic Market Annual Attendance at Our Theme Parks Approximately 50% Over 30 Million Guests Amusement and Leisure Parks: Annual Attendance Ranking among Market Size and Oriental Land’s Share Japanese Theme Parks Market size (Billions of yen) Oriental Land’s market share (%) Attendance Name of facility 724 (thousands) 632 630 648 643 640 655 623 599 Tokyo Disneyland 585 1 31,298 Tokyo DisneySea 48.3 47.6 50.9 44.5 43.6 45.9 2 Universal Studios Japan 10,500 39.7 39.6 40.3 40.2 3 HUIS TEN BOSCH 2,477 4 Shima Spain Village “PARQUE ESPANA” 1,418 2004 2005 2006 2007 2008 2009 2010 20112012 2013 (CY) 5 Ryukyu Mura 1,200 Source: White Paper of Leisure 2014 (August 2014, Japan Productivity Center) Source: Japan Amusement & Recreation Park Data Book 2015 Note: Data used to calculate Oriental Land’s market share is based on figures (Ranking based on the fiscal year ended March 31, 2014) for the fiscal year. 6 Oriental Land GUEST PROFILE Over 65% of Guests Are from the Tokyo Metropolitan Area Stable Metropolitan Area Population Projected Breakdown of Guests by Region Regional Population Projections for Japan: 2010–2040 Kanto (metropolitan area) Chubu/Koshinetsu Kinki Overseas 5.0% Tohoku Others (Japan) Others (Japan) 7.0% (Million people) 120 Tohoku 3.8% Kanto 80 (metropolitan area) Kinki 7.0% 40 66.2% Chubu/Koshinetsu 0 11.0% 2010 2015 2020 2025 2030 2035 2040 (CY) FY ’15/3 Results Source: Regional Population Projections for Japan: 2010–2040 (March 2013) by National Institute of Population and Social Security Research About 70% of Guests Are Adults (Over 18) and About 20% of Guests are Over 40 Breakdown of Guests by Age (%) Over 40 18 to 39 12 to 17 4 to 11 100 15.3 15.4 16.2 17.0 17.9 17.7 19.1 18.6 19.9 21.1 20.4 52.0 52.2 52.0 51.8 52.2 53.1 52.4 51.2 49.6 49.5 49.5 13.0 12.5 11.8 11.3 10.7 11.1 10.1 11.9 12.6 12.7 13.5 19.7 19.9 20.0 19.9 19.2 18.1 18.4 18.3 17.9 16.7 16.6 0 ’05/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 ’11/3 ’12/3 ’13/3 ’14/3 ’15/3 Revenues per Guest ¥10,955 and Average Length of Visit 9.0 Hours Revenues per Guest (Yen) Ticket receipts Merchandise Food and beverage 11,076 10,022 10,336 10,601 10,955 9,178 9,220 9,309 9,370 9,719 9,743 4,217 4,335 4,483 4,598 4,660 4,042 4,038 4,151 4,226 4,222 4,206 3,860 4,185 3,122 3,144 3,144 3,096 3,370 3,377 3,629 3,796 4,043 2,014 2,039 2,014 2,048 2,128 2,160 2,176 2,205 2,259 2,292 2,252 ’05/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 ’11/3 ’12/3 ’13/3 ’14/3 ’15/3 Average Length of Visit (hours) ’05/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 ’11/3 ’12/3 ’13/3 ’14/3 ’15/3 8.5 8.4 8.4 8.4 8.4 8.4 8.4 8.7 8.7 8.9 9.0 Annual Report 2015 7 Eleven-Year Performance Indicators and Summaries Revenues ↓1.5% Operating