Outline of consolidated financial results for the six months ended September 30, 2012 and consolidated earnings forecast for the fiscal year ending March 31, 2013
Outline | Presentation by the President | Q & A
Yoshihiro Mori, Senior Managing Director, Nintendo Co., Ltd.
This outline is based on the documents "Earnings Release," "Supplementary Information about Earnings Release" for the 2nd quarter of the fiscal year ending March 31, 2013, and "Notice of Semi-Annual Financial Forecast Differences with its Results and Full-Year Forecast Modifications."
- 1. Briefing of consolidated financial results for the six months ended September 30, 2012
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Consolidated operating results for the six months ended September 30, 2011 and 2012
Six months ended
Sep. 30, 2011Six months ended
Sep. 30, 2012Comparison Net Sales: 215.7 billion yen 200.9 billion yen -6.8% Gross Profit: 32.0 billion yen 44.3 billion yen 38.5% (Gross Profit Ratio) (14.8%) (22.1%) Operating Income: -57.3 billion yen -29.1 billion yen - (Operating Income Ratio) (-26.6%) (-14.5%) Ordinary Income: -107.8 billion yen -47.2 billion yen - (Ordinary Income Ratio) (-50.0%) (-23.5%) Net Income: -70.2 billion yen -27.9 billion yen - (Net Income Ratio) (-32.6%) (-13.9%)
(Main reasons for the decrease in net sales)
The net sales were down due to a decrease in the unit sales of the "Wii" and "Nintendo DS" hardware and software in most regions, though the sales units of "Nintendo 3DS" grew in all regions. In addition, there were a few other factors which led to the decline in sales such as the stronger yen against the average exchange rates for foreign currencies, especially the euro, which were used to convert the sales in foreign currencies to yen, compared to the same period of the previous fiscal year.
(Gross profit ratio)
The gross profit ratio during the same period of the previous fiscal year was significantly worse due to the effect of the price reduction of the "Nintendo 3DS" hardware and the impact of absorbing the inventory markdown taken into account in connection with the price reduction. During the first six months of this fiscal year, the gross profit ratio was 22.1%. There were both positive and negative factors contributing to this result; the positive ones were the improvement in the profitability of the "Nintendo 3DS" hardware and a declined sales ratio of hardware among the total sales, and the negative one was a decrease in product profitability mainly due to the loss to be incurred on the future sales of the "Wii U" hardware around its launch period.
(Main reasons for operating loss)
Due to the increase of gross profit, operating loss was reduced in comparison with the same period of the previous fiscal year. However, since net sales decreased and the total of selling, general and administrative expenses including fixed expenses exceeded gross profit, it resulted in an operating loss situation.
(Main reasons for ordinary loss)
Ordinary loss stemmed from 23.2 billion yen of foreign exchange losses due to the appreciation of the yen as well as operating loss.
- 2. Briefing of consolidated earnings forecast modifications for the fiscal year ending March 31, 2013
- Consolidated earnings forecast for the fiscal year ending March 31, 2013 has been revised from that announced in earnings releases for the fiscal year ended March 31, 2012, which were released on April 26, 2012. The revision was made due to effects of the trend of stronger-than-expected yen appreciation, the actual sales performance in the first half of this fiscal year and the updated sales outlook in the second half of this fiscal year.
• Full year ending March 31, 2013Original Forecast Revised Forecast Net Sales: 820.0 billion yen 810.0 billion yen Operating Income: 35.0 billion yen 20.0 billion yen Ordinary Income: 35.0 billion yen 10.0 billion yen Net Income: 20.0 billion yen 6.0 billion yen
The foreign exchange rate assumption for the second half of this fiscal year and as of March 31, 2013 per euro has been revised from 105 yen to 100 yen, while that per U.S. dollar remains at 80 yen. The primary reason of this downward forecast revision is due to the revised exchange rate assumption of the euro against the yen.
• Forecasted unit sales for the full fiscal year ending March 31, 2013
Original Forecast Revised Forecast Nintendo DS Hardware 2.5 million units 2.5 million units Nintendo DS Software 37.0 million units 37.0 million units Nintendo 3DS Hardware 18.5 million units 17.5 million units Nintendo 3DS Software 73.0 million units 70.0 million units Wii Hardware 10.5 million units 5.0 million units Wii U Hardware 5.5 million units Wii Software (*1) 70.0 million units 50.5 million units Wii U Software 24.0 million units *1 Wii software sales units in the original forecast do not include the quantity bundled with hardware; however, those in the revised forecast include about 1.5 million units of software bundled with hardware sold in the first half of this fiscal year through September 2012.- Nintendo DS means Nintendo DS, Nintendo DS Lite, Nintendo DSi and Nintendo DSi XL.- Forecasted sales units of the "Nintendo 3DS" software and the "Wii U" software include the downloadable version of each packaged software title.The forecasted annual dividend per share for the fiscal year ending March 31, 2013 is expected to be 100 yen, the minimum dividend per share for this fiscal year paid regardless of the profit level, which was announced at the beginning of this fiscal year.For the second half of this fiscal year, we continue to focus on selling "Nintendo 3DS" and aim to make "Wii U" spread from the beginning of its launch scheduled for this year-end sales season. We strive to expand our business by providing games and services which make use of the features of those hardware systems.
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).
Outline | Presentation by the President | Q & A
