IR Information

Outline of Financial Results Briefing
for the nine-month period through December 2007

Presentation (outline) by Yoshihiro Mori, Senior Managing Director, Nintendo Co., Ltd.

For this outline of the presentation, reference is made to:
  - Earnings Release: Third Quarter Ended in December 2007
  - Supplementary Information about the Earnings Release

(1) Consolidated Income Statement (April 2007 through December 2007) compared to the same period of the previous year
Net Sales: 1,316.4 billion yen (+ 603.8 billion yen)
Operating income: 394 billion yen (+226.4 billion yen)
Income before income taxes
and extraordinary items:
430.8 billion yen (+210.1 billion yen)
Net income: 258.9 billion yen (+127 billion yen)

Note: Amount in parentheses indicate a change from the same period in the previous fiscal year

  • "Net sales": Reasons for the increase
    Both "Nintendo DS" and "Wii" hardware and software had robust sales.  Another factor is the average exchange rates for U.S. dollars and Euro against Japanese yen became favorable due to weaker yen exchange rate trend during this period compared to the previous year.  This resulted in 56.2 billion yen positive impact to sales.
  • "Gross margin":
    The gross margin ratio (42%) was about the same as the same period a year earlier.   "Wii" hardware, which has a relatively unfavorable margin ratio, increased as a proportion of total net sales, however, the yen exchange rates during this period weakened by 1.1 yen per U.S. dollar and 14.87 yen per Euro which created an offsetting positive impact.
  • "Selling general and administrative expenses": Reasons for the increase
    Primarily due to the increase of marketing expenses related to increased sales.
  • "Operating income":
    The operating income ratio rose due to the increase in gross margin which was only partially offset by the increase in operating expenses.
  • "Income before income taxes and extraordinary items":
    Decrease of foreign exchange gains from 26 billion yen to 0.1 billion yen reduced the ratio of income before income taxes and extraordinary items to net sales to a level slightly higher than the previous period.
  • "Extraordinary gains":
      Primarily due to a gain on the sale of land owned by Nintendo of America Inc.
  • "Extraordinary losses":
    Mainly represents unrealized losses on securities investments due to a market value decrease of assets denominated in foreign currencies such as U.S. government bonds.  The market value as of December 31, 2007 declined due to yen appreciation from the value as of March 31, 2007.
(2) Consolidated Balance Sheet as of December 31, 2007 (as compared with the end of March 31, 2007)
  • "Cash and deposits":
    Effective with the semi-annual reporting period ended September 2007, "Certificate of deposits" (reported as "Cash and deposits" in the past) is reported as "Securities".  If the amount of the deposits of 337.8 billion yen is subtracted from the balance as of March 31, 2007, the change from the last fiscal year-end is an increase of 274.2 billion yen.  The main reason for the increase is strong business performance.
  • "Securities":
    Effective as of the semi-annual reporting period ended September 2007, "Certificate of deposits" (reported as "Cash and deposits" in the past) is reported as "Securities".  If the amount of the deposits were added to the balance as of March 31, 2007, the balance would increase to 453.8 billion yen.  As a result, the change from the last fiscal year-end is a decrease of 177.7 billion yen.  The main reason for the decrease is lower certificates of deposits and public corporation bonds.
  • "Inventories": Reasons for the decrease
    Primarily due to strong sales performance
  • "Other current liabilities": Reasons for the increase
    Mainly due to an increase of accounts payable related to marketing expenses
(3) Supplements
‹Consolidated sales units during April to December 2007 period compared to the previous period›
  • "Nintendo DS":
    Sales of "Nintendo DS" hardware reached 24.5 million units world-wide in this nine-month period.  Geographically, sales in "Other region" (mainly Europe) were the strongest at 10.42 million units.  On a cumulative basis through December 2007,  sales exceeded the 20 million units mark in each of all regions "Japan", "The Americas" and "Other", and "Nintendo DS" is selling at almost the same level in overseas markets as in Japan.  In the three-month period from October to December 2007, sales increased sharply in "The Americas" and "Other" regions.
  • "Wii":
    Year over year "Wii" sales for the first three quarters this fiscal year versus the same period last fiscal year are not comparable due to the fact that "Wii" launched in the 2006 Christmas and was, therefore, only available for several weeks last fiscal year versus the entire three quarters this fiscal year.  As a result, this past nine-month period contains a very large increase over last year.  Geographically, sales in "The Americas" were particularly robust.
(4) Consolidated earnings forecast
The earnings forecast for the fiscal year ending March 2008 was revised as follows:
Net Sales: 1,630 billion yen (+ 80 billion yen)
Operating income: 460 billion yen (+ 40 billion yen)
Income before income taxes
and extraordinary items:
460 billion yen (no change)
Net income: 275 billion yen (no change)

Note: Amount in parentheses indicate change from the previous forecast announced on October 25, 2007

  • Revised unit sales forecast for the year:
    "Nintendo DS" hardware: 29.5 million units (+ 1.5 million units)
    "Nintendo DS" software: 179 million units (+ 14 millions)
    "Wii" hardware: 18.5 million units (+ 1 million units)
    "Wii" software: 115 million units (+ 18 million units)
  • Assumed exchange rates in the 4th quarter (January-March 2008):
    One U.S. dollar = 110 yen (previous forecast was 115 yen)
    One Euro = 155 yen (previous forecast was 160 yen)
  • Forecast of "Other income" is approximately 50 billion yen and that of "Other expenses" is the same (approximately 50 billion yen) primarily due to foreign exchange losses.
  • The annual dividend is expected to be 1,190 yen per share (interim: 140 yen, year-end: 1,050 yen) if actual results are in line with this revised forecast.

Forecasts referred to above are based upon management’s assumptions with information available at the time the announcement was made and, therefore, involve known and unknown risks and uncertainties.  Please note that such risks and uncertainties may cause actual results to be materially different from the forecasts (earnings forecast, dividend forecast and other forecasts)



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