Outline of Results Briefing held on Nov 6, 2020 | Investor Relations

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Outline of Results Briefing held on Nov 6, 2020

: We would now like to begin the Financial Results Briefing session of SQUARE ENIX HOLDINGS (the “Company”) for the first quarter of the fiscal year ending March 31, 2021 (“1H FY2021/3”).
Today’s presenters are:Yosuke Matsuda, President and Representative Director, andAtsushi Matsuda, General Manager of Finance and Accounting Division.

: First, Mr. Matsuda, General Manager of Finance and Accounting Division, will give an overview of the Company’s financial results for 1H FY2021/3, and then our president Mr. Matsuda will discuss the progress made by each of the Company’s business segments.

: Good afternoon. I am Atsushi Matsuda.In 1H FY2021/3, the Company booked net sales of ¥172.7 billion (up ¥52 billion YoY), operating income of ¥31.6 billion (up ¥15.7 billion), ordinary income of ¥30.5 billion (up ¥14.9 billion), and net income attributable to parent company shareholders of ¥16.0 billion (up ¥5.1 billion).

: I will next break down our results by segment.The Digital Entertainment segment posted net sales of ¥142.4 billion (up ¥57 billion YoY) and operating income of ¥33.8 billion (up ¥17.2 billion).
The HD Games sub-segment saw sales rise YoY and a turn to profitability thanks not only to the release of major console titles such as “FINAL FANTASY VII REMAKE” and “Marvel’s Avengers,” but also to brisk sales of catalog titles and licensing income.
The MMO sub-segment saw sales decline YoY given that the “FINAL FANTASY XIV” expansion pack had been released a year earlier, but YoY growth in paying subscriber numbers for that title resulted in higher profits.
The Games for Smart Devices/PC Browser sub-segment saw YoY growth in both sales and profits. In addition to solid performances from titles launched in FY2020/3 such as “DRAGON QUEST WALK,” “WAR OF THE VISIONS: FINAL FANTASY BRAVE EXVIUS,” earnings were also helped by “DRAGON QUEST TACT,” which had a strong start following its July launch.
The Amusement segment generated net sales of ¥13.9 billion (down ¥8.2 billion YoY) and an operating loss of ¥1.6 billion (vs. operating income of ¥1.3 billion a year earlier). The Company temporarily closed its amusement facilities in Japan in 1Q in response to the government’s state of emergency declaration, resulting in a sharp YoY sales decline and an operating loss.
The Publication segment booked net sales of ¥12.3 billion (up ¥3.3 billion YoY) and operating income of ¥5.3 billion (up ¥2.1billion). Sales in digital formats, such as from “MANGA UP!” manga application and e-books, grew substantially. Sales in printed formats were also brisk, resulting in YoY growth in net sales and operating income.
The Merchandising segment posted net sales of ¥4.8 billion (up ¥300 million YoY) and operating income of ¥1.5 billion (up ¥900 million). The YoY growth in sales and profits owed to brisk sales of character goods and soundtracks based on the Company’s IP.
This concludes my overview on our 1H FY2021/3 financial results.

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The plans, forecasts, strategies and ideas described in this material are descriptions of forecasts of future results. These descriptions rely on information available as of the date of production of this material and are based on assumptions and judgment made by the Company’s management. Readers are advised not to rely solely on these forecasts. Readers should also not assume that these forecasts are accurate or valid information, even after the date of public release. There are many factors that may cause actual results to vary considerably from the forecasts, and in some cases actual results may be inferior to forecasts.
The information on the future forecasts described in this material is current as of November 6, 2020. The company is not obliged to update or correct forecasts concerning the Company’s future results, including forecasts or outlook, if new information becomes available and/or events occur after November 6, 2020.