Outline of consolidated financial results for the fiscal year ended March 31, 2014 and consolidated earnings forecast for the fiscal year ending March 31, 2015
Outline | Presentation by the President | Q & A
Tatsumi Kimishima, Managing Director, Nintendo Co., Ltd.
This outline is based on the documents “Earnings Release,” “Supplementary Information about Earnings Release” for the fiscal year ended March 31, 2014, and “Notice of Full-Year Financial Forecast Differences with its Results.”
- 1. Briefing of consolidated financial results for the full fiscal year ended March 31, 2014
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A. Consolidated operating results for the full fiscal year ended March 31, 2013 and 2014
Year ended
March 31, 2013Year ended
March 31, 2014Comparison Net Sales 635.4 billion yen 571.7 billion yen -10.0% Gross Profit 140.3 billion yen 163.2 billion yen 16.3% (Gross Profit Ratio) (22.1%) (28.5%) Operating Income -36.4 billion yen -46.4 billion yen - (Operating Income Ratio) (-5.7%) (-8.1%) Ordinary Income 10.4 billion yen 6.0 billion yen -41.9% (Ordinary Income Ratio) (1.6%) (1.1%) Net Income 7.0 billion yen -23.2 billion yen - (Net Income Ratio) (1.1%) (-4.1%)
(Net sales)
The sales units of the “Nintendo 3DS” software increased in all regions compared with those in the last fiscal year as a result of a strong software lineup featuring titles such as “Pokémon X/Pokémon Y,” simultaneously released globally in October 2013, “Animal Crossing: New Leaf,” “Luigi’s Mansion: Dark Moon,” “The Legend of Zelda: A Link Between Worlds” and seven more of Nintendo’s first party titles that became million-seller titles this fiscal year. In addition, there have also been hit titles from third-party publishers. With respect to “Wii U,” we released compelling titles from last summer onwards. Although they were well-received, the “Wii U” business as a whole showed slow growth. Consequently, in comparison with the last fiscal year, the sales units of the “Wii U” hardware decreased in spite of an increase in unit sales of the “Wii U” software. In addition, the unit sales of the “Wii” and “Nintendo DS” hardware and software decreased significantly. As a result, the total net sales were down compared to the previous fiscal year.
(Gross profit ratio)
The gross profit ratio increased compared to the previous fiscal year mainly due to a decrease in the hardware sales ratio out of the total net sales and an improvement in the profitability of the “Nintendo 3DS” hardware.
(Main reason for operating loss)
Total selling, general and administrative expenses, including fixed expenses, exceeded gross profit, resulting in an operating loss situation for this fiscal year. This situation arose because, in addition to an increase in the research and development expenses, depreciation of the yen against the U.S. dollar and euro increased costs incurred in foreign currencies when they were converted to Japanese yen.
(Main reason for ordinary income)
The 39.2 billion yen of foreign exchange gains were produced as a result of the depreciation of the yen at the end of this fiscal year compared with the one at the end of the last fiscal year.
(Main reason for net loss)
This situation arose mainly because of the balance of deferred tax assets reduced in relation to the losses carried over in the United States.
B. The annual dividend per share for the fiscal year ended March 31, 2014
If our dividend policy is applied in accordance with the financial result, the annual dividend per share is zero; however, the annual dividend per share for the fiscal year ended March 31, 2014 is set at 100 yen on the basis of our dividends paid in the last two years. - 2. Briefing of differences between the financial forecasts announced on January 17, 2014 and the actual results for the year ended March 31, 2014
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Previous Forecast (A)
announced on
Jan. 17, 2014Actual result (B) Increase (Decrease)
(B)-(A)Net Sales 590.0 billion yen 571.7 billion yen -18.2 billion yen Operating Income -35.0 billion yen -46.4 billion yen -11.4 billion yen Ordinary Income 5.0 billion yen 6.0 billion yen 1.0 billion yen Net Income -25.0 billion yen -23.2 billion yen 1.7 billion yen
The net sales were lower than expected due to the fact that the sales units of the “Nintendo 3DS” hardware, and the “Wii U” hardware and software did not reach their expected levels. The operating loss increased from the forecast due to the increase in inventory write-down and research and development expenses compared with the forecasts in addition to the decrease of net sales. - 3. Briefing of consolidated earnings forecast for the fiscal year ending March 31, 2015
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Consolidated earnings forecasts for the fiscal year ending March 31, 2015 are as follows:Net Sales 590.0 billion yen Operating Income 40.0 billion yen Ordinary Income 35.0 billion yen Net Income 20.0 billion yen
The foreign exchange rate assumptions are 100 yen per U.S. dollar, and 140 yen per euro.
Forecasted unit sales for the full fiscal year ending March 31, 2015 are as follows:Nintendo 3DS Hardware 12.0 million units Nintendo 3DS Software 67.0 million units Wii Hardware 0.5 million units Wii Software 9.0 million units Wii U Hardware 3.6 million units Wii U Software 20.0 million units Note: Please also refer to “Earnings Release” for the fiscal year ended March 31, 2014 for the above forecast.
The forecasted annual dividend per share for the fiscal year ending March 31, 2015 is expected to be 120 yen provided the actual results meet the forecasts.
For the fiscal year ending March 31, 2015, we will seek to stimulate “Wii U” and “Nintendo 3DS” and make efforts to balance revenue with expenses in order to revitalize the financial performance.
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
