Nintendo : Three Months Earnings

CONSOLIDATED FINANCIAL HIGHLIGHTS

Nintendo Co., Ltd.

August 3, 2023

Nintendo Co., Ltd.

11-1Hokotate-cho, Kamitoba,

Minami-ku, Kyoto 601-8501

Japan

					(Amounts below one million yen are rounded down)
Consolidated Results for the Three Months Ended June 30, 2022 and 2023
(1) Consolidated operating results
	Net sales		Operating profit	Ordinary profit		Profit attributable
			to owners of parent
	million yen	%	million yen	%	million yen	%		million yen	%
Three months ended June 30, 2023	461,341	50.0	185,441	82.4	253,766	52.2		181,019	52.1
Three months ended June 30, 2022	307,460	(4.7)	101,647	(15.1)	166,723	29.6		118,984	28.3
[Notes]
Percentages for net sales, operating profit etc. show increase (decrease) from the previous fiscal year.
Comprehensive income: Three months ended June 30, 2023: 237,507 million yen [30.2%] Three months ended June 30, 2022: 182,428 million yen [86.6%]
	Profit per share		Diluted profit per share
		yen		yen
Three months ended June 30, 2023	155.48		-
Three months ended June 30, 2022	101.85		-
The Company enacted a 10-for-1 stock split of its common stock with an effective date of October 1, 2022.
Profit per share is calculated based on the assumption that the stock split was implemented at the beginning of the previous fiscal year.
(2) Consolidated financial positions
	Total assets		Net assets		Capital adequacy
			ratio
	million yen		million yen			%
As of June 30, 2023	2,997,942		2,361,772		78.7
As of March 31, 2023	2,854,284		2,266,466		79.4

[Reference]

Shareholders equity : As of June 30, 2023: 2,360,572 million yen As of March 31, 2023: 2,266,234 million yen

Dividends
			Dividend per share
	End of 1st quarter	End of 2nd quarter	End of 3rd quarter	Year-end	Annual
	yen	yen	yen	yen	yen
Year ended March 31, 2023	-	630.00	-	123.00	-
Year ending March 31, 2024	-
Year ending March 31, 2024		-	-	-	147.00
(forecast)
[Notes]

Revisions to previously announced dividend forecast: Not applicable

The Company enacted a 10-for-1 stock split of its common stock with an effective date of October 1, 2022. The dividend for the 2nd quarter of the fiscal year ended March 31, 2023 presents the amount prior to the stock split. The dividend for the year-end of the fiscal year ended March 31, 2023 presents the amount after the stock split.

Dividends are paid twice a year after the end of the second quarter and at the fiscal year-end based on profit levels achieved in each fiscal year as our basic policy. As for the dividend forecast for the fiscal year ending March 31, 2024, only the annual dividend is described because the financial forecast for the year is prepared only on a full fiscal year basis and the dividend cannot be separately forecasted between the interim and the fiscal year-end.

Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2024

	Net sales		Operating profit	Ordinary profit	Profit attributable	Profit per share
		to owners of parent
	million yen	%	million yen	%	million yen	%	million yen	%	yen
Year ending March 31, 2024	1,450,000	(9.5)	450,000	(10.8)	480,000	(20.1)	340,000	(21.4)	292.04

[Notes]

Percentages for net sales, operating profit etc. show decrease from the previous fiscal year. Revisions to previously announced financial forecast: Not applicable

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Nintendo Co., Ltd.

Others

(1)	Changes for important subsidiaries during the three-month period ended June 30, 2023	: Applicable
	Newly consolidated: 1 company (Nintendo Systems Co., Ltd.)
(2)	Application of accounting procedures specific to the preparation of quarterly consolidated financial statements	: Applicable
(3)	Changes in accounting procedures:
	1)	Related to accounting standard revisions etc.			: Not applicable
	2)	Other changes				: Not applicable
	3)	Changes in accounting estimates				: Not applicable
	4)	Modified restatements				: Not applicable
(4)	Outstanding shares (common shares)
	1)	Number of shares outstanding (including treasury shares)
		As of Jun. 30, 2023:	1,298,690,000	shares	As of Mar. 31, 2023:	1,298,690,000	shares
	2)	Number of treasury shares
		As of Jun. 30, 2023:	134,460,801	shares	As of Mar. 31, 2023:	134,460,640	shares
	3)	Average number of shares
		Three months ended	1,164,229,290	shares	Three months ended	1,168,178,044	shares
		Jun. 30, 2023:	Jun. 30, 2022:

[Notes]

The Company enacted a 10-for-1 stock split of its common stock with an effective date of October 1, 2022

Outstanding shares (common shares) are calculated based on the assumption that the stock split was implemented at the beginning of the previous fiscal year.

[Notes]

1. This earnings release report is not subject to quarterly review procedures by a certified public accountant or audit firm.
2. Forecasts announced by the Company (Nintendo Co., Ltd.) referred to above were prepared based on management's assumptions with information available at this time and therefore involve known and unknown risks and uncertainties such as fluctuation in foreign exhange rates and other changes in the market environment. Please note such risks and uncertainties may cause the actual results (earnings, dividend, and other results) to be materially different from the forecasts.

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Nintendo Co., Ltd.

1. Consolidated Operating Results

Regarding the Nintendo Switch business during the first quarter (April through June 2023), The Legend of Zelda: Tears of the Kingdom (released in May) got off to a good start recording sales of 18.51 million units. The April release of The Super Mario Bros. Movie positively impacted sales of Mario related titles, with Mario Kart 8 Deluxe recording sales of 1.67 million units (for cumulative sales of 55.46 million units). Other titles also continued to sell steadily. As a result of these factors, hardware unit sales increased 13.9% year-on-year to 3.91 million units, and software unit sales increased 26.1% year-on-year to 52.21 million units.

Turning to the digital business for our dedicated video game platform, digital sales rose 35.9% year-on-year to 119.6 billion yen, helped by the depreciation of the yen combined with good sales of downloadable versions of packaged software for Nintendo Switch and increased sales related to Nintendo Switch Online.

In the mobile and IP related business, the combination of an increase in income from royalties and the high level of audience engagement with The Super Mario Bros. Movie resulted in overall sales of 31.8 billion yen (an increase of 190.1% year-on-year).

The end result is that overall sales reached 461.3 billion yen, with sales outside Japan of 369.0 billion yen accounting for 80.0% of that total. Operating profit came to 185.4 billion yen. With the depreciation of the yen in foreign exchange markets, we recorded foreign exchange gains of 47.2 billion yen, with the result that ordinary profit totaled 253.7 billion yen and profit attributable to owners of parent totaled 181.0 billion yen.

2. Consolidated Financial Forecast

There are no changes to the original financial forecast for this period that was published on May 9, 2023.

For hardware, by continuing to convey the appeal of Nintendo Switch, we try not only to put one system in every home, but several in every home, or even one for every person. Another objective is to continually release new offerings so more consumers keep playing Nintendo Switch even longer and we can maximize hardware sales. For software, we released Pikmin 4 in July, which will be followed by the release of Super Mario Bros. Wonder in October and Super Mario RPG in November. In addition, add-on content for Pokémon Scarlet and Pokémon Violet in the form of The Hidden Treasure of Area Zero is on the way. The first wave of this add-on content, The Teal Mask, is planned to be released in the fall of 2023, and the second part, The Indigo Disk, is planned for release in the winter of 2023. Other software publishers also plan to release a wide variety of titles, and we will work to invigorate the platform by supplementing existing titles with a continuous stream of new titles and add-on content.

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		Nintendo Co., Ltd.
3. Consolidated Balance Sheets
		million yen
Description	As of March 31, 2023	As of June 30, 2023
(Assets)
Current assets
Cash and deposits	1,263,666	1,327,573
Notes and accounts receivable-trade	119,932	145,660
Securities	615,699	624,456
Inventories	258,628	262,754
Other	56,822	94,969
Allowance for doubtful accounts	(236)	(217)
Total current assets	2,314,513	2,455,195
Non-current assets
Property, plant and equipment	99,509	103,787
Intangible assets	18,595	14,709
Investments and other assets	421,666	424,248
Total non-current assets	539,770	542,746
Total assets	2,854,284	2,997,942
(Liabilities)
Current liabilities
Notes and accounts payable-trade	149,217	145,997
Provisions	4,219	1,742
Income taxes payable	82,550	73,986
Other	297,492	351,845
Total current liabilities	533,480	573,571
Non-current liabilities
Provisions	133	43
Retirement benefit liability	23,084	24,905
Other	31,119	37,648
Total non-current liabilities	54,337	62,597
Total liabilities	587,818	636,169
(Net assets)
Shareholders' equity
Share capital	10,065	10,065
Capital surplus	15,079	15,079
Retained earnings	2,392,704	2,430,523
Treasury shares	(271,049)	(271,050)
Total shareholders' equity	2,146,798	2,184,616
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	28,028	35,878
Foreign currency translation adjustment	91,406	140,077
Total accumulated other comprehensive income	119,435	175,955
Non-controlling interests	232	1,200
Total net assets	2,266,466	2,361,772
Total liabilities and net assets	2,854,284	2,997,942

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		Nintendo Co., Ltd.
4. Consolidated Statements of Income
		million yen
Description	Three months ended June 30, 2022	Three months ended June 30, 2023
Net sales	307,460	461,341
Cost of sales	122,861	180,242
Gross profit	184,598	281,098
Selling, general and administrative expenses
82,950	95,656
Operating profit	101,647	185,441
Non-operating income
Interest income	2,722	10,779
Foreign exchange gains	51,798	47,202
Other	11,259	10,455
Total non-operating income	65,780	68,437
Non-operating expenses
Interest expenses	38	32
Loss on sale of securities	0	70
Other	665	8
Total non-operating expenses	704	111
Ordinary profit
166,723	253,766
Extraordinary income
Gain on sale of non-current assets	25	0
Total extraordinary income	25	0
Extraordinary losses
Loss on disposal of non-current assets	8	13
Total extraordinary losses
8	13
Profit before income taxes	166,740	253,753
Total income taxes	47,775	72,765
Profit
118,965	180,987
Loss attributable to non-controlling interests	(18)	(31)
Profit attributable to owners of parent
118,984	181,019

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