Investors

FIELDS CORPORATION held a financial presentation for the fiscal year ended March 31, 2015 in OTEMACHI 1st SQUARE CONFERENCE (Chiyoda-ku, Tokyo) on May 1, 2015 (Friday) at 11:30 am.
This page provides an overview of our explanation (summary) at the financial presentation.

Takashi Oya, President & COO

1. Overview

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Fields moved to the first section of the Tokyo Stock Exchange on April 14, 2015. We would like to take this opportunity to thank all of our stakeholders for their support.
We plan to pay a commemorative dividend of 10 yen at the fiscal year-end to express our appreciation to our shareholders. Dividends per share for the fiscal year ended March 31, 2015 will amount to 60 yen, including the ordinary dividend.

In the fiscal year ended March 31, 2015, net sales totaled 99.5 billion yen and ordinary income was 5.4 billion yen.
Earnings were generally in line with forecasts.
In pachinko/pachislot machines sales, the number of machines sold for titles launched exceeded forecasts for “CR EVANGELION 9”, “Ultra Battle Retsuden”, “Pachislot BERSERK” and others. However, we kept our initial conservative forecasts unchanged due to the impact of changes in the model certification test method in September 2014. As a result, the number of pachinko machines sold totaled 302,000 and the number of pachislot machines sold amounted to 97,000.
At the same time, IP created by Fields is being developed for the screen. We aim to work with a wide range of companies in the entertainment field and become a stronger, leaner IP company.
Going forward, we will curb SG&A costs Group-wide.

2. Summary of Results for the Year Ended March 31, 2015 (Consolidated)

Consolidated P/L

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The consolidated P/L statement for the fiscal year ended March 31, 2015 shows that net sales totaled 99.5 billion yen, operating income was 4.7 billion yen, ordinary income amounted to 5.4 billion yen and net income stood at 3.0 billion yen.
Earnings were generally in line with forecasts.

Main pachinko/pachislot machines lineup (results)

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The main pachinko/pachislot machines lineup for the year ended March 31, 2015 is shown in the table.
In the fourth quarter, about 100,000 pachinko machines in the “CR EVANGELION 9” series were sold, as were about 80,000 “Ultra Battle Retsuden” machines, while the “Salaryman Kintaro” pachislot machine sold about 40,000 machines and “Pachislot BERSERK” sold about 20,000 machines.

Consolidated B/S

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The table shows the consolidated B/S.
There are no points particularly worthy of note.

Consolidated cash flow

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The table shows the consolidated cash flow.
There are no points particularly worthy of note.

3. Forecast of earnings for the Year Ending March 31, 2016 (Consolidated)

Forecast of consolidated earnings

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In the fiscal year ending March 31, 2016, we forecast 120 billion yen in net sales and 6.5 billion yen in ordinary income. We anticipate some latitude in gross margins overall.
In pachinko/pachislot machine sales, all allied manufacturers will release products. The number of titles should more than double over the previous fiscal year. The number of machines sold will increase particularly for pachislot machines, and the share of sales should expand with the growth in the total number of machines sold.

In social games, some titles, such as “KOTOKOTO” and “ANIMAL × MONSTER”, had one million downloads. Going forward, we plan to refine the number of titles and focus our resources on those with the most potential.

In management overall, we will continue to review all of our business to expand the IP business, and will invest more in areas where justified. At the same time, we will curb SG&A expenses.

Toward reforms in management structure

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We will enhance the solid and revenue-generating capacity of our management structure over the next two to three years.
We will make constructive changes in all areas, including eliminations and consolidations among Group companies.

(Reference) Trends in Pachinko/Pachislot Market

Trends in Pachinko/Pachislot Market

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Standards for both pachinko and pachislot machines will change this year.
The MAX type of pachinko machine will be sold through the end of October, after which the minimum big jackpot rate will be 1/320, in line with the current middle type. Our strength is content and product planning, making this transition to the middle type a boost for the Company.
By consolidating medal discharge management in the main panel of pachislot machines, complex games are simplified.
Although the medal discharge performance is restrained, in our view the stronger health of the industry will create new fans.

Changes to standards for pachinko machines (details)

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The new standards for pachinko machines are shown in the table.

Changes in Pachinko Sales Market

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After regulations were revised in 2004, the sales ratio of the MAX type rose, and users’ play time shortened, which has continued to reduce the average shooting game balls per unit.
In the future, an increase in the middle type would lengthen users’ play time and thus is expected to increase average shooting game balls per unit.

(Reference) Pachinko/Pachislot Machines Market Data

Status of pachislot machine sales

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The status of pachislot machines sales is shown in the graph.
The number of pachislot machines sold and the number of titles sold declined particularly in Oct-Dec 2014 as a result of changes in the model certification test method.

Status of pachislot machine installation

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The status of pachislot machines installed is shown in the graph.

Status of pachinko machine sales

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The status of pachinko machines sales is shown in the graph.
The number of pachinko machines sold rose only slightly over the previous fiscal year as a result of changes in the model certification test method for pachislot machines, and the number of titles sold increased significantly.

Status of pachinko machine installation

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The status of pachinko machines installed is shown in the graph.

Status of implementation of SCA’s model certification test

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The status of conformance to the Security Communications Association’s certification tests is shown in the graph.

Tetsuya Shigematsu, Executive Vice President

4. IP Initiatives

Philosophy behind cyclical business model

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We aim to optimize the value of IP and increase corporate value by comprehensively expanding our business, with IP at its core.

Status of IP development

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As of the end of March 2015, the number of IP totaled 150, and IP was expanded into 85 types of media. We expect to gradually release titles currently being developed for film from the fiscal years ending March 31, 2016 and 2017, and at the same time we are planning for commercialization. We plan to expand the number of IP developed every year, but will focus on high-quality IP by concentrating our resources on carefully selected IP without excessive expansion.

Status of IP development

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Fields creates IP based primarily on the monthly comic “HERO’S Monthly.” Since this comic first began publication through March 2015, 49 works have been created. We plan on creating six new works every fiscal year. At present, seven IP that we have created are being developed for film, and commercial goods for this IP will be developed to coincide with the broadcast. Six IP will be developed as games and 3 as pachinko/pachislot machines together with our partners.

Current status of IP film development

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We will now discuss some typical projects.
In HERO’S IP, a television animation of “SWORDGUY” will be broadcast and commercial goods developed from 2017 through 2018. Script development for a live action film of “SOUL ReVIVER” in Hollywood has been completed, and we are now considering media expansion while refining the script.
In Tsuburaya IP, the new series “Ultraman X”, aimed at kids, will be broadcast from July 2015. The previous series lasted one quarter, but this new series will be expanded to cover two quarters. Developments combining TV and movies, such as remakes of existed Tsuburaya IP put together in collaboration with the creator, will target adults overseas as well as in Japan.
Internet distribution of “NINJA SLAYER FROM ANIMATION” began in April 2015. Terrestrial broadcasting from now on has also been decided. Fields holds the majority of merchandising rights, and we plan to launch a wide range of products.

Status of IP merchandising (social game)

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Of existing titles, games using AKB48 have contributed to revenue to some extent. The initial response to “ANIMAL × MONSTER”, launched in March 2015, was extremely positive, and it became a talking point in the market. We are working to improve game features and will time advertising campaigns with the release of updates.
We plan to release six new titles in the fiscal year ending March 31, 2016.

Status of IP merchandising (related to commercialization)

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We plan on releasing a wide range of products utilizing IP. Twenty-five companies will hold licenses for “NINJA SLAYER FROM ANIMATION”, for which we hold the domestic and foreign commercialization rights, and the scale of product development will be over 1.5 billion yen.
In addition, we are planning and developing innovative products such as gimmick goods, utilizing characters. These will be deployed not only in the character market, but also in the general goods market and elsewhere.

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In April 2015, we started “A MAN of ULTRA”, a new licensed brand. Product development for this brand, which offers Ultraman’s world view to adults, will be carried out by 17 companies at present.

Conditions in Ultraman series

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The Ultraman series yields stable revenue from cross-media development. Growth overseas is also expected to be substantial, and we will accelerate overseas expansion beginning in the fiscal year ending March 31, 2016.