FIELDS CORPORATION held a financial presentation for the year ended March 31, 2016 in Bellesalle Jimbocho (Chiyoda-ku, Tokyo) on April 28, 2016 (Thursday) at 12:00 am.
This page provides an overview of our explanation (summary) at the financial presentation.
⇒Page 2 of Financial Presentation
In the year ended March 31, 2016, net sales totaled 94.4 billion yen, and ordinary income was 1.3 billion yen.
The overall number of pachinko/pachislot machines sold stood at 280,000 units, with pachinko machines sales totaling 160,000 units and pachislot machine sales totaling 120,000 units.
In the cross media business, a total of 176 IP titles were developed across 96 media.
We forecast net sales of 115 billion yen and ordinary income of 2 billion yen for the year ending March 31, 2017.
Our overall focus on development of the pachinko/pachislot business centered on intellectual property (IP) and cross media business remains unchanged.
2. Summary of Results for the Year Ended March 31, 2016 (Consolidated)
⇒Page 4 of Financial Presentation
The table shows the consolidated P/L statement for the year ended March 31, 2016.
It should be noted that we posted some extraordinary loss to optimize the Group’s management investment.
⇒Page 5 of Financial Presentation
The table shows the pachinko/pachislot machines lineup for the year ended March 31, 2016.
The overall number of machines sold stood at 280,000 units with the number of pachinko and pachislot machines sold totaling 160,000 and 120,000 units, respectively. The year-on-year fall is attributable to difficulty securing adequate development time, and dispersion of sales expertise due mainly to the impact of the changes to regulations.
⇒Page 6 of Financial Presentation
The table shows the consolidated B/S.
There was a decrease in notes and accounts receivable—trade associated with sales of pachinko/pachislot machines, as well as notes and accounts payable—trade. Aside from that, there are no points particularly worthy of note.
⇒Page 7 of Financial Presentation
The table shows the consolidated cash flow.
Net cash provided by financing activities amounted to 5.2 billion yen, resulting from short-term borrowings to provide funds to an equity-method affiliate.
3. Forecast of earnings for the Year Ending March 31, 2017 (Consolidated)
⇒Pages 9 and 10 of Financial Presentation
The table shows forecasts of consolidated earnings for the year ending March 31, 2017.
In the pachinko/pachislot business, we will sell a series of products that capitalize on IP and have strong entertainment elements, rather than high gambling nature products. We will also reconstruct our sales structure and way of sales in order to enhance our strength as a distributor.
In the cross media business, we will intensively invest in IP that we expect to become major products in the future, while promoting financial and other cooperation with partners in Japan and abroad, with the aim of expanding profit.
4. Future objectives
⇒Page 12 of Financial Presentation
The figure shows the history of FIELDS' business.
The initiatives we have taken so far have helped us strengthen relations with a wide range of company groups in the entertainment field, including those in the pachinko/pachislot industry. We expect that IP alone will become a major business going forward and that we will be able to target revenue from the cross media business equal to that of the pachinko/pachislot business.
⇒Page 13 of Financial Presentation
The graph shows the business environment for the pachinko/pachislot machine market.
The number of pachinko/pachislot machines installed has been almost flat, while the number of pachinko/pachislot machines sold has been trending downward since 2012.
This trend has resulted from a variety of factors, including regulations. We believe, however, that the recent shift to low gambling nature reflects the shift of the pachinko/pachislot machine market to entertainment, which we have been heading for. We expect that this shift will help invigorate the market in the long term, although it may negatively affect our earnings in the short term.
⇒Pages 14 and 15 of Financial Presentation
The graph shows the business environment for the leisure market.
Leisure will diversify as the number of media increases. With the global population and GDP also increasing, we would like to achieve sustainable growth by aiming to become a company that can be active worldwide.
⇒Page 16 of Financial Presentation
In doing business, we are likely to face a fall in the domestic population and diversifying leisure down the road. Amid such circumstances, we will target the global market, especially in the IP business, and at the same time we will also provide highly competitive products, including pachinko/pachislot machines, in the domestic market.
4-1. Future objective (Pachinko/Pachislot)
⇒Page 18 of Financial Presentation
The graphs show trends in the pachinko/pachislot market. The number of machines sold was 3.2 million units in 2014 and 2.8 million units in 2015 (estimates by FIELDS).
⇒Page 19 of Financial Presentation
The pachinko/pachislot machine market is shrinking.
Amid such circumstances, we are expected to play an increasing role as the largest distributor and trading company in the industry towards invigoration of the market.
⇒Page 20 of Financial Presentation
For instance, in the consumer electronics industry, manufacturers used to own directly operated stores as a means to communicate with consumers. Distributors now respond to consumer needs, thereby helping the industry to expand their sales volume. We consider it possible for distributors to invigorate the entire industry by serving as a go-between as they are in the consumer electronics industry.
⇒Page 21 of Financial Presentation
In light of these business environments, we will promote the following initiatives in the pachinko/pachislot business: 1.strengthen product appeal; 2. enhance services as a distributor and trading company; and 3. expand the fan base.
⇒Page 22 of Financial Presentation
We think it is important to acquire innovative IP that has the potential of becoming a series and develop this IP into products. To do so, we have first worked on organizational reform of the Pachinko/Pachislot Business Management Division and switched to a structure enabling marketing, IP acquisition, planning/development, sales promotion, sales, and promotion of utilization in a comprehensive way.
⇒Page 23 of Financial Presentation
We will strive to enhance our services as a distributor. We have already signed contracts with some businesses, analyzed their sales/financial data and proposed solutions. Going forward, we plan to offer a variety of services in addition to those mentioned above.
⇒Page 24 of Financial Presentation
To expand the number of fans, we need to commercialize and provide IP that is good for time spending types of leisure. For example, young generations view pachislot in the same way as anime and games. We, therefore, would like to acquire and create such IP in cooperation with cross media and pursue the migration of fans by leveraging this IP.
⇒Page 25 of Financial Presentation
In summary, our largest strength lies in sales capabilities as an independent distributor, and we will promote measures to reinforce this. At the same time, by leveraging the strengths if the IP we have nurtured, we will create completely new products in cooperation with allied manufacturers. Through these initiatives, we would like to contribute to the development of the entire industry.
4-2. Future objective (cross media)
⇒Page 27 of Financial Presentation
The figures show initiatives taken so far for IP.
Since 2000, we have acquired a number of IP titles, from anime to sports, and turned them into pachinko/pachislot machines. Moreover, since 2012, we have accelerated our efforts to develop the IP acquired and created into cross media formats, and have focused on the cultivating of IP itself.
⇒Page 28 of Financial Presentation
An advantage of the cross media business lies in IP's production capacity and possible world-wide cross media development, including development into pachinko/pachislot machines. Projects for multiple titles have already been underway, with films for “GANTZ:O” and “BERSERK” scheduled to be released in the year ending March 31, 2017.
⇒Page 29 of Financial Presentation
In the cross media business, we plan to promote the following two initiatives: 1. shift from diversified investment to concentrated investment for IP; and 2. accelerate global expansion with powerful partners.
⇒Pages 30 and 31 of Financial Presentation
The total number of IP acquired, owned, and created by FIELDS has reached 176 titles, which were developed across 96 media in the year ended March 31, 2016.
In the meantime, we have focused on narrowing these down to major IP, and plan to focus on cross media development of 7 titles going forward.
Note that we intend to use funds received from overseas distributors in producing visuals from IP in order to reduce production risk.
⇒Pages 32 and 33 of Financial Presentation
In our efforts for global expansion, we have been especially focusing on development of the Ultraman series in Asia and will continue to promote it, as earnings from the overseas business of Tsuburaya Productions have been higher than initially projected. Regarding IP titles other than the Ultraman series, we will proceed with various measures in cooperation with partners in order to increase the presence of major IP across the globe through such means as electronic books, visual distribution, and games.