Investors

FIELDS CORPORATION held a financial presentation for the third quarter of the year ending March 31, 2016 in OTEMACHI 1st SQUARE CONFERENCE (Chiyoda-ku, Tokyo) on February 1, 2016 (Monday) at 11:30 am.
This page provides an overview of our explanation (summary) at the financial presentation.

Takashi Oya, President & COO

1. Overview

⇒Page 2 of Financial Presentation

In the nine months ended December 31, 2015, net sales totaled 71.6 billion yen and ordinary income was 2.1 billion yen.
In pachinko/pachislot machine sales, the overall number of machines sold was up 43.7% over the previous year to 220,000 units. Compared with the previous term , sales of both pachinko and pachislot titles increased.
In intellectual property (IP), progress has been made in cross-media expansion, including IP created from HERO'S Monthly.

2. Summary of Results for the Third Quarter of the Year Ending March 31, 2016 (Consolidated)

Consolidated P/L

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The table shows the consolidated P/L statement for the third quarter of the year ending March 31, 2016.
We posted 71.6 billion yen in net sales, 2.1 billion yen in operating income, 2.1 billion in ordinary income and 0.7 billion yen in net income attributable to owners of the parent company. Earnings have grown considerably compared to the same period of the previous year.

Main pachinko/pachislot machines lineup

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The table shows the pachinko/pachislot machines lineup already announced for the year ending March 31, 2016.
In the third quarter, the number of pachislot machines sold totaled 93,000, up 164.6% year-over-year, and the number of pachinko machines sold increased 7.4% to 126,000.
It should be noted that, in addition to the titles already announced, 2 more pachislot titles and 2 more pachinko titles are scheduled to be sold during the fourth quarter (January–March).

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.
The expenditure for loans is associated with an expansion of development lines at an equity method affiliate and an increase in work in process. There are therefore no particular concerns regarding financial soundness.

(Reference) Trends in Pachinko/Pachislot Market and Data

Status of pachislot machine sales

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The status of pachislot machine sales is shown in the graph.
The deadline for the installation of new machines under the old regulations (end of November 2015) fell during this third quarter. As a result, the number of titles increased, and the number of machines sold across the whole market exceeded the same period of the previous year.
There is still consumer demand even after the transition to the new regulations, and so we expect that the market will remain steady during the next fiscal year.

Status of pachislot machine installation

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The status of pachislot machines installed is shown in the graph.
The number of machines installed has risen slightly since the end of 2014. The share of machines installed currently stands at 45% for AT-type machines. As AT-type machines transition to ART-type machines, we expect the share of normal-type machines to also increase. In anticipation of this situation, we are also working to expand our lineup of normal-type machines.

Status of pachinko machine sales

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The status of pachinko machine sales is shown in the graph.
The number of titles sold during the third quarter was on par with the previous year, but the number of machines sold fell below the same period of the previous year.
Given the moratorium on replacing machines in May during the Ise-Shima Summit, we expect that sales will be concentrated in March and April.

Status of pachinko machine installation

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The status of pachinko machines installed is shown in the graph.
The number of machines installed has remained virtually flat, while the share of machines installed is polarized between the Amadigi-type (Low Spec) and the MAX-type (High Spec) machines. Going forward, there will be more need for our middle high-type machines, targeted at securing light users.

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.
Although the ratio of pachislot machines passing the test has remained at a constant level, the ratio of pachinko machines passing the test has been on a downward trend since September 2015.

As pachinko/pachislot machines shift from high-stakes machines to low-stakes machines, we expect that the amount of money a user spends each session will also decrease. However, since there will be more opportunities than before to play the machines, we believe that scene direction and content will be more important than ever before. Consequently, at FIELDS, we will continue to contribute to the health and development of the industry by promoting the creation and “reboot” (remake) of IP.

Tetsuya Shigematsu, Executive Vice President

3. IP Initiatives

Status of IP

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The graph shows the total number of IP and the status of their development.
Our model is to develop IP across multiple media formats, either IP we have developed in-house, such as HERO'S, or IP we have developed in collaboration with partner companies. The total number of IP and the number of IP developments are gradually increasing.

IP creation

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These materials show the status of IP creation.
In the roughly four years since its first issue, we have created 65 titles from HERO'S Monthly. Producing animated versions takes time, but we are making progress with several projects.
Regarding “ULTRAMAN,” the cumulative total number of comic books published in the current series of seven volumes topped 2 million. As for “Tengen Toppa Gurren Lagann,” it continues to be broadcast as a TV anime series and to be published as a series in HERO'S Monthly, and as part of our cross-media expansion, we launched a new “Tengen Toppa Gurren Lagann” pachinko machine. We also made the decision to distribute HERO'S works to China.

Visual distribution of IP

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Animation is a type of business. At the same time, it is a tool for expanding a fan base.
TV broadcasts of the “Ultraman X” anime finished at the end of last year, and its theater release is scheduled for this March. Simultaneous broadcasts overseas have reached about 400 million views, and going forward, we will also ramp up merchandise development in those broadcast regions.
A new run of “Ultraman Series” is also scheduled to start broadcasting in July 2016.
Apart from “Ultraman Series,” in January 2016, we also commenced TV broadcasts of “Active Raid” and “Grimgar, Live and Act.” Plans are already in place to commercialize them through various media, including adapting them into comic form and game form.

In visual distribution, we are currently proceeding to build a new scheme for creating animation which includes domestic and overseas distributors as partners. The aim is to increase earnings by holding a large number of rights to serve as a contact point for animation works produced through this new scheme, and by carrying out cross-media expansion.

IP merchandising expansion (social games)

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The handout shows the expansion of social games.
We released two titles in December, and currently eight titles are being merchandised. Although competition in the market is fierce, we will concentrate on enhancing the profitability and game function of existing titles.

IP merchandising expansion (licensed goods)

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These materials show the status of licenses.
Our advertising campaigns are currently focused on “Ultraman Series.”
Domestic and overseas advertising campaigns numbered 36 this period, and we expect that this number will increase even further next year.
In addition, with our new licensed brand “A MAN of ULTRA” (a licensed brand spreading the world of Ultraman to apparel and other product lines), the number of licensed companies reached 39 for 41 brands. We also plan to open several pop-up shops in major department stores.