Outline of consolidated financial results for the nine months ended December 31, 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 3rd quarter of the fiscal year ending March 31, 2013, and "Notice of Full-Year Financial Forecast Modifications."
- 1. Briefing of consolidated financial results for the nine months ended December 31, 2012
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Consolidated operating results for the nine months ended December 31, 2011 and 2012
Nine months ended
Dec. 31, 2011Nine months ended
Dec. 31, 2012Comparison Net Sales: 556.1 billion yen 543.0 billion yen -2.4% Gross Profit: 131.1 billion yen 127.2 billion yen -2.9% (Gross Profit Ratio) (23.6%) (23.4%) Operating Income: -16.4 billion yen -5.8 billion yen - (Operating Income Ratio) (-3.0%) (-1.1%) Ordinary Income: -66.0 billion yen 22.7 billion yen - (Ordinary Income Ratio) (-11.9%) (4.2%) Net Income: -48.3 billion yen 14.5 billion yen - (Net Income Ratio) (-8.7%) (2.7%)
(Main reasons for the decrease in net sales)
The net sales were down due to a large decrease in the unit sales of the "Wii" and "Nintendo DS" hardware and software, despite the "Wii U" launch and the growth of the sales units of "Nintendo 3DS." In addition, another factor that contributed to the decline in sales was the change in the average exchange rate, which is used in calculating sales in foreign currencies to yen, during the nine months ended in December 2011 to the nine months ended in December 2012. In that regard, although the yen depreciated slightly against the U.S. dollar, it appreciated against the euro by just over eight yen from 110.64 yen to 102.17 yen.
(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 nine months of this fiscal year, the overall gross profit ratio remained at almost the same level as the previous fiscal year at 23.4%. There were both positive and negative factors contributing to this result; while there was an improvement in the profitability of the "Nintendo 3DS" hardware due to a decline in production costs, there was a decrease in overall product profitability due to the production costs of the "Wii U" hardware, released this fiscal year, being higher than its selling price.
(Main reasons for operating loss)
Though selling, general and administrative expenses decreased compared to the same period of the previous fiscal year, they exceeded gross profit, which led to an operating loss situation for two consecutive fiscal terms.
(Main reason for ordinary income)
The main reason was that 22.2 billion yen of foreign exchange gains were produced as a result of the depreciation of the yen at the end of the period last year exceeding the 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 2nd quarter of the fiscal year ending March 31, 2013, which were released on October 24, 2012. The revision was made due to the revised foreign exchange rate assumptions and the sales unit forecasts revised based on the actual sales performance in the year-end sales season and afterward.
• Full year ending March 31, 2013Previous Forecast Revised Forecast Net Sales: 810.0 billion yen 670.0 billion yen Operating Income: 20.0 billion yen -20.0 billion yen Ordinary Income: 10.0 billion yen 20.0 billion yen Net Income: 6.0 billion yen 14.0 billion yen
The foreign exchange rate assumptions as of March 31, 2013 have been revised from 80 yen to 90 yen per U.S. dollar, and from 100 yen to 120 yen per euro.
• Forecasted unit sales for the full fiscal year ending March 31, 2013
Previous Forecast Revised Forecast Nintendo DS Hardware 2.5 million units 2.3 million units Nintendo DS Software 37.0 million units 33.0 million units Nintendo 3DS Hardware 17.5 million units 15.0 million units Nintendo 3DS Software 70.0 million units 50.0 million units Wii Hardware 5.0 million units 4.0 million units Wii Software 50.5 million units 50.0 million units Wii U Hardware 5.5 million units 4.0 million units Wii U Software 24.0 million units 16.0 million units Note: Please also refer to the last page of "Earnings Releases" for the 3rd quarter of the fiscal year ending March 31, 2013 for the above forecast.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.Though the financial performance of this fiscal year will be in an operating loss making situation, we are preparing for many attractive games to be released continuously in the next fiscal year to revitalize the financial performance by accelerating to spread of "Wii U" and "Nintendo 3DS."
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
