Sanrio Company, Ltd
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May 12, 2017 Summary of Financial Results for the Fiscal Year Ended March 31, 2017 (FY2016) [Japanese GAAP] Company name: Sanrio Company, Ltd. Listed Stock Exchange: TSE 1st Section Stock code: 8136 URL: http://www.sanrio.co.jp/english/corporate/ir/ Representative: Shintaro Tsuji, President and Chief Executive Officer Inquiries: Susumu Emori, Senior Managing Director TEL: +81-3-3779-8058 Scheduled date of Annual General Meeting of Shareholders: June 22, 2017 Scheduled date of filing of Annual Securities Report: June 23, 2017 Starting date of dividend payment: June 6, 2017 Preparation of supplementary materials for financial results: Yes Holding of financial results meeting: Yes (for institutional investors and analysts) Note: The original disclosure in Japanese was released on May 12, 2017 at 16:00 (GMT +9). (All amounts are rounded down to the nearest million yen) 1. Consolidated Financial Results for FY2016 (April 1, 2016 – March 31, 2017) (1) Consolidated results of operations (Percentages represent year-on-year changes) Net Profit Attributable Sales Operating Profit Ordinary Profit to Owners of Parent Millions of yen % Millions of yen % Millions of yen % Millions of yen % FY2016 62,695 (13.5) 6,904 (45.5) 7,255 (44.9) 6,475 (32.6) FY2015 72,476 (2.8) 12,675 (27.4) 13,178 (28.9) 9,609 (25.0) Note: Comprehensive income (millions of yen) FY2016: 5,275 (up 139.5%) FY2015: 2,203 (down 86.4%) Net Profit per Fully-Diluted Net Return on Equity Return on Assets Operating Profit Share Profit per Share (ROE) (ROA) to Sales Yen Yen % % % FY2016 76.32 - 12.1 7.0 11.0 FY2015 112.08 - 16.0 11.6 17.5 Reference: Equity in earnings of unconsolidated subsidiaries (millions of yen) FY2016: - FY2015: - (2) Consolidated financial position Total Assets Net Assets Equity Ratio Net Assets per Share Millions of yen Millions of yen % Yen As of Mar. 31, 2017 101,312 53,058 52.2 622.94 As of Mar. 31, 2016 105,826 54,733 51.4 641.24 Reference: Shareholders’ equity (millions of yen) As of Mar. 31, 2017: 52,854 As of Mar. 31, 2016: 54,407 (3) Consolidated cash flows Cash Flows from Cash Flows from Cash Flows from Cash and Cash Equivalents Operating Activities Investing Activities Financing Activities at End of Period Millions of yen Millions of yen Millions of yen Millions of yen FY2016 7,037 8,736 (6,111) 30,090 FY2015 10,011 (6,398) (19,582) 21,170 2. Dividends Dividend per Share Dividend Dividend on Total Payout Ratio Equity Dividends 1Q-end 2Q-end 3Q-end Year-end Total (Consolidated) (Consolidated) Yen Yen Yen Yen Yen Millions of yen % % FY2015 - 40.00 - 40.00 80.00 6,787 71.4 11.4 FY2016 - 40.00 - 40.00 80.00 6,787 104.8 12.7 FY2017 (forecast) - 40.00 - 40.00 80.00 87.0 3. Consolidated Forecasts for FY2017 (April 1, 2017 – March 31, 2018) (Percentages represent year-on-year changes) Net Profit Attributable Net Profit per Sales Operating Profit Ordinary Profit to Owners of Parent Share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen First half 30,600 (2.7) 4,100 5.5 4,300 15.3 2,900 (23.8) 34.18 Full year 65,700 4.8 10,800 56.4 11,200 54.4 7,800 20.4 91.93 * Notes (1) Changes in consolidated subsidiaries during the period (changes in scope of consolidation): None Newly added: - Excluded: - (2) Changes in accounting policies and accounting-based estimates, and restatements 1) Changes in accounting policies due to revisions in accounting standards, others: Yes 2) Changes in accounting policies other than 1) above: None 3) Changes in accounting-based estimates: None 4) Restatements: None (3) Number of outstanding shares (common stock) 1) Number of outstanding shares at the end of the period (including treasury stock) As of Mar. 31, 2017: 89,065,301 shares As of Mar. 31, 2016: 89,065,301 shares 2) Number of shares of treasury stock at the end of the period As of Mar. 31, 2017: 4,218,168 shares As of Mar. 31, 2016: 4,218,056 shares 3) Average number of shares outstanding during the period FY2016: 84,847,214 shares FY2015: 85,734,357 shares Reference: Unconsolidated Financial Results 1. Unconsolidated Financial Results for FY2016 (April 1, 2016 – March 31, 2017) (1) Unconsolidated results of operations (Percentages represent year-on-year changes) Sales Operating Profit Ordinary Profit Net Profit Millions of yen % Millions of yen % Millions of yen % Millions of yen % FY2016 44,722 (11.7) 4,609 (41.4) 12,658 67.5 12,732 124.3 FY2015 50,643 (0.7) 7,858 (23.2) 7,557 (31.0) 5,675 (26.7) Net Profit per Share Fully-Diluted Net Profit per Share Yen Yen FY2016 150.07 - FY2015 66.20 - (2) Unconsolidated financial position Total Assets Net Assets Equity Ratio Net Assets per Share Millions of yen Millions of yen % Yen As of Mar. 31, 2017 60,094 27,470 45.7 323.76 As of Mar. 31, 2016 54,128 21,423 39.3 250.59 Reference: Shareholders’ equity (millions of yen) As of Mar. 31, 2017: 27,470 As of Mar. 31, 2016: 21,261 2. Unconsolidated Forecasts for FY2017 (April 1, 2017 – March 31, 2018) (Percentages represent year-on-year changes) Sales Ordinary Profit Net Profit Net Profit per Share Millions of yen % Millions of yen % Millions of yen % Yen First half 22,000 1.4 2,800 60.3 1,900 (17.4) 22.39 Full year 46,800 4.6 7,000 (44.7) 4,800 (62.3) 56.57 Note 1: The current financial report is not subject to audit procedures. Note 2: Cautionary statement with respect to forward-looking statements and other special items Forecasts regarding future performance in these materials are based on assumptions judged to be valid and information currently available to the Company. These materials are not promises by the Company regarding future performance. Actual results may differ significantly from these forecasts for a number of factors. Please refer to “1. Overview of Results of Operations, etc., (1) Results of Operations” on page 2 of the attachments for forecast assumptions and notes of caution for usage. Sanrio Company, Ltd. (8136) Financial Results for FY2016 Contents of Attachments 1. Overview of Results of Operations, etc. 2 (1) Results of Operations 2 (2) Financial Position 7 (3) Cash Flows 8 (4) Outlook 9 (5) Basic Policy Regarding Profit Distribution and Dividends for FY2016 and FY2017 10 2. Corporate Structure 11 3. Management Policy 12 (1) Basic Management Policy 12 (2) Target Performance Indicators and Medium to Long-Term Management Strategy 12 (3) Management Issues and Measures to be Tackled 12 4. Basic Approach for the Selection of Accounting Standards 13 5. Consolidated Financial Statements and Notes 14 (1) Consolidated Balance Sheets 14 (2) Consolidated Income Statements and Consolidated Comprehensive Income Statements 16 (3) Consolidated Statements of Changes in Shareholders’ Equity 19 (4) Consolidated Cash Flow Statements 21 (5) Notes to Consolidated Financial Statements 23 Going Concern Assumption 23 Changes in Accounting Policies 23 Additional Information 23 Notes to Consolidated Balance Sheets 23 Notes to Consolidated Income Statements 23 Notes to Consolidated Statements of Changes in Shareholders’ Equity 25 Notes to Consolidated Cash Flow Statements 26 Segment and Other Information 27 Per Share Information 30 Subsequent Events 30 6. Other Information 31 Changes in Directors and Auditors 31 1 Sanrio Company, Ltd. (8136) Financial Results for FY2016 1. Overview of Results of Operations, etc. (1) Results of Operations (100 millions of yen) Vs. Plan Y-O-Y FY2016 Increase/ Change FY2015 Increase/ Change Results *Final plan decrease (%) Results decrease (%) Sales 626 664 (37) (5.6) 724 (97) (13.5) Gross profit 404 432 (27) (6.3) 473 (68) (14.5) Selling, general & administrative 335 338 (2) (0.7) 346 (10) (3.1) expenses Operating profit 69 94 (24) (26.5) 126 (57) (45.5) Non-operating profit or expenses 3 - 3 - 5 (1) (30.3) Ordinary profit 72 94 (21) (22.8) 131 (59) (44.9) Extraordinary gains or losses 6 2 4 227.3 6 (0) (0.5) Net profit before income taxes 79 96 (16) (17.6) 138 (59) (42.8) Total income taxes 13 16 (2) (13.0) 41 (27) (66.7) Net profit attributable to owners of 64 80 (15) (19.1) 96 (31) (32.6) parent Gross margin 64.6% 65.1% (0.5)% - 65.3% (0.7)% - Operating margin 11.0% 14.2% (3.2)% - 17.5% (6.5)% - Ordinary margin 11.6% 14.2% (2.6)% - 18.2% (6.6)% - *Since the initial forecast has been revised in FY2016, the table above shows comparisons with the final plan. During the fiscal year under review (consolidated subsidiaries overseas: January 1 to December 31, 2016; consolidated subsidiaries in Japan: April 1, 2016 to March 31, 2017), overseas business underperformed the previous year as royalty income increase in the Southeast Asia, East Asia and Chinese markets proved unable to compensate for the continuous downturn in product licensing income in the United States, Europe and Latin America. The domestic business sales continued to decrease due to unseasonal weather and a reactionary decline following a buoyant retail market for inbound tourists in the previous fiscal year, affected by a hike in customs duties implemented by the Chinese government in April. Additionally, consumption trends moving from products to events and attractions are making the prospects for consumption more uncertain than ever. Under these conditions, in Japan, the events and attractions business at the Tama City theme park performed well, and character development advanced into new areas including social networks, comics, animation and mobile game apps such as Sanrio Danshi (boys), Gudetama, Aggretsuko (Aggressive Retsuko) and Show By Rock!!.