Bandai Namco Group: First Quarter Result Presentation, Fiscal Year Ending March 2024

Key insights

7 takeaways

01
Bandai Namco’s consolidated operating profit fell significantly to 27.9 billion yen in Q1 FY2024, down from 44.3 billion yen in the same period last year.See it on page 1
02
The Digital segment experienced a sharp profit decline from 29.4 billion yen to 2.6 billion yen, driven by a thinner home video game release schedule and lower repeat unit sales.See it on page 3
03
The Toys and Hobby segment became the primary growth engine, generating 120.3 billion yen in sales and 23.6 billion yen in profit behind strong demand for Gundam models and card games.See it on page 6
04
Despite the Q1 profit contraction, the group maintained its full-year forecast of 1,000 billion yen in net sales and 125 billion yen in operating profit.See it on page 6
05
Consolidated net sales rose to 224.8 billion yen, an increase of 8.6 billion yen compared to the previous year's first quarter.See it on page 3
06
Management plans to recover digital performance by launching major titles in later quarters and implementing stricter development screening processes.See it on page 9
07
The Amusement segment reported growth in both sales and profit, supported by new machine releases and increased foot traffic in Japanese facilities.See it on page 3

Summary

Bandai Namco's first-quarter results for the fiscal year ending March 2024 show higher sales but sharply lower profit, driven by a weak Digital segment offset by strength in Toys and Hobby. Net sales rose 8.6 billion yen to 224.8 billion yen, while operating profit fell 16.4 billion yen to 27.9 billion yen, recurring profit dropped to 32.7 billion yen, and profit attributable to owners of the parent declined to 21.7 billion yen from 37.0 billion. Advertising and personnel expenses increased, and capital investment fell to 6.9 billion yen.

Segment performance diverged significantly. Digital sales fell 21.5 billion yen to 68.0 billion, and segment profit collapsed from 29.4 billion to 2.6 billion yen, reflecting differences in title lineup and product mix and lower repeat unit sales of home video games, though network content and a new PC online game started well. Toys and Hobby sales climbed 25.5 billion yen to 120.3 billion, with profit up 9.3 billion to 23.6 billion, supported by Gundam plastic models, card games that became worldwide hits, and capsule toys. Amusement sales reached 28.2 billion yen with profit of 3.1 billion, and existing Japanese facilities grew sales 2.6%. IP Production was flat at 14.9 billion yen in sales and 1.0 billion in profit, helped by licensing tied to the Mobile Suit Gundam: The Witch from Mercury.

For the first half, the company held its net sales forecast at 475.0 billion yen and operating profit at 60.0 billion, but raised recurring profit by 3.0 billion to 65.0 billion. Within segments, Digital was cut to 160.0 billion yen in sales and 17.0 billion in profit, citing repeat unit sales and higher research expenses from a revised development screening system, while Toys and Hobby was raised to 240.0 billion in sales and 40.0 billion in profit, and Amusement profit to 5.0 billion. The full-year plan remains unchanged at 1,000.0 billion yen in net sales and 125.0 billion in operating profit, pending closer examination.

Strategically, the group emphasizes its ALL BANDAI NAMCO approach of cross-business, cross-region IP initiatives. Upcoming launches include major home video game titles in the second quarter and beyond, such as Armored Core VI, along with expanded global rollouts in strong toy categories and new facilities and machines in amusement.