Financial

Consolidated Financial Results: Nine Months Ended December 31, 2022

Summary

Konami Group experienced a period of financial divergence during the nine months ending December 31, 2022, characterized by top-line revenue growth coupled with significant bottom-line contraction. Total revenue rose by 5.5 percent to 226.8 billion yen, bolstered by the release of core gaming titles, favorable currency fluctuations stemming from yen depreciation, and robust performance within the Gaming and Systems segment, particularly in the United States market. This growth trajectory underscores the company’s continued reliance on its Digital Entertainment division as a primary revenue engine, even as it diversifies its international footprint. Despite these gains, profitability faced substantial headwinds, with business profit falling 31.2 percent to 41.06 billion yen and operating profit declining to 37.5 billion yen from 60.3 billion yen in the prior year. This margin compression resulted from a confluence of rising operational costs, including increased product amortization, elevated promotional expenditures, and higher energy prices. The Amusement and Sports segments also contributed to the overall profit decline, reflecting broader challenges in maintaining cost efficiency across diverse business units. In response to these fiscal pressures, the company revised its full-year consolidated earnings forecast downward, specifically adjusting profit expectations within the Digital Entertainment business. Moving forward, the strategic focus remains centered on long-term value creation through cross-platform game development, the expansion of eSports initiatives, and the stabilization of its amusement and sports club operations. By prioritizing these growth areas, the organization aims to navigate current macroeconomic volatility while leveraging its established intellectual property to regain operational momentum.

From the report

for the Consolidated Financial Results Nine Months Ended December 31, 2022 (Prepared in Accordance with IFRS) February 2, 2023 KONAMI GROUP CORPORATION Address: 11-1, Ginza 1-chome, Chuo-ku, Tokyo, Japan Stock code number, TSE: 9766 Ticker symbol, LSE: KNM URL: ~~https://www.konami.com/~~ Shares listed: Tokyo Stock Exchange and London Stock Exchange Representative: Kimihiko Higashio, Representative Director, President Contact: Junichi Motobayashi, Corporate Officer, General Manager, Finance Division Beginning date of dividend (Phone: +81-3-6636-0573) payment: - (Amounts are rounded to the nearest million, except percentages and per share amounts) 1. Consolidated Financial Results for the Nine Months Ended December 31, 2022 (1) Consolidated Results of Operations (Millions of Yen, except percentages and per share amounts) Profit Business Operating Profit before Profit for the attributable to Revenue profit profit income taxes period owners of the parent Nine months ended December 31, 2022 226,878 41,062 37,523 38,374 27,571 27,571 % change from previous year 5.5% (31.2)% (37.8)% (35.9)% (34.9)% (34.9)% Nine months ended December 31, 2021 215,048 59,657 60,311 59,860 42,383 42,381 % change from previous year 12.0% 30.2% 48.8% 51.5% 56.9% 57.0% Total comprehensive income for the period: Nine months ended December 31, 2022: ¥31,509 million; (28.1)% Nine months ended December 31, 2021: ¥43,800 million; 66.6% Note) Business profit is calculated by deducting “cost of revenue” and “selling, general and administrative expenses” from “revenue.”

Total comprehensive income for the period: Nine months ended December 31, 2022: ¥31,509 million; (28.1)% Nine months ended December 31, 2021: ¥43,800 million; 66.6% Note) Business profit is calculated by deducting “cost of revenue” and “selling, general and administrative expenses” from “revenue.” Basic earnings per Diluted earnings per share (attributable to share (attributable to owners of the parent) owners of the parent) (yen) (yen) Nine months ended December 31, 2022 204.82 203.46 Nine months ended December 31, 2021 317.79 312.89 (2) Consolidated Financial Position (Millions of Yen, except percentages and per share amounts) Total equity Ratio of equity attributable to owners attributable to owners Total assets Total equity of the parent of the parent December 31, 2022 524,079 367,955 367,940 70.2% March 31, 2022 528,613 348,076 348,061 65.8%

2. Cash Dividends Cash dividends per share (yen) Record Date First quarter Second quarter Third quarter Year end Annual end end end Year ended March 31, 2022 - 36.50 - 87.00 123.50 Year ending March 31, 2023 - 62.00 - Year ending March 31, 2023 62.00 124.00 (Forecast) Note) Recently announced change in dividend forecasts for the fiscal year ending March 31, 2023 during the three months ended December 31, 2022: No 3. Consolidated Earnings Forecast for the Year Ending March 31, 2023 (Millions of Yen, except percentages and per share amounts) Basic earnings Profit per share attributable to (attributable Business Operating Profit before owners of the to owners of Revenue profit profit income taxes parent the parent) (yen) Year ending March 31, 2023 303,000 50,500 42,500 42,500 29,000 213.93 % change from previous year 1.2% (37.1)% (42.9)% (43.5)% (47.1)% Note) Recently announced change in earnings forecasts for the fiscal year ending March 31, 2023 during the three months ended December 31, 2022: Yes Noted Items (1) Changes in significant consolidated subsidiaries during the period (status changes of subsidiaries due to changes in the scope of consolidation): None (2) Changes in accounting policies and accounting estimate 1. Changes in accounting policies required by IFRS: No 2. Other changes: No 3. Changes in accounting estimate: No (3) Number of shares issued (Share capital) 1. Number of shares issued: (Treasury shares included) As of December 31, 2022 143,500,000 shares 2. As of March 31, 2022 143,500,000 shares Number of treasury shares: As of December 31, 2022 7,941,026 shares

s: No 3. Changes in accounting estimate: No (3) Number of shares issued (Share capital) 1. Number of shares issued: (Treasury shares included) As of December 31, 2022 143,500,000 shares 2. As of March 31, 2022 143,500,000 shares Number of treasury shares: As of December 31, 2022 7,941,026 shares 3. As of March 31, 2022 9,919,591 shares Average number of shares outstanding: Nine months ended December 31, 2022 134,611,852 shares Nine months ended December 31, 2021 133,360,057 shares

Earnings release (Kessan Tanshin) regarding these consolidated procedures. financial results is not subject to auditing Cautionary statement with respect to forward-looking statements and other matters: Statements made in this document with respect to our current plans, estimates, strategies and beliefs, including the above forecasts, are forward-looking statements about our future performance. These statements are based on management’s assumptions and beliefs in light of information currently available to it and, therefore, you should not place undue reliance on them. A number of important factors could cause actual results to be materially different from and worse than those discussed in forward-looking statements. Such factors include, but are not limited to: (ⅰ) changes in economic conditions affecting our operations; (ⅱ) fluctuations in currency exchange rates, particularly with respect to the value of the Japanese yen, the U.S. dollar and the Euro; (ⅲ) our ability to continue to win acceptance of our products, which are offered in highly competitive markets characterized by the continuous introduction of new products, rapid developments in technology and subjective and changing consumer preferences; (ⅳ) the timing of the release of new game titles and products, especially game titles and products that are part of historically popular series; (ⅴ) our ability to successfully expand internationally with a focus on our Digital Entertainment, Amusement, and Gaming & Systems

ng consumer preferences; (ⅳ) the timing of the release of new game titles and products, especially game titles and products that are part of historically popular series; (ⅴ) our ability to successfully expand internationally with a focus on our Digital Entertainment, Amusement, and Gaming & Systems businesses; (ⅵ) our ability to successfully expand the scope of our business and broaden our customer base through our Sports business; (ⅶ) regulatory developments and changes and our ability to respond and adapt to those changes; (ⅷ) our expectations with regard to further acquisitions and the integration of any companies we may acquire; and (ⅸ) the outcome of existing contingencies. Please refer to page from 8 to 10 for further information regarding our business forecasts. KONAMI GROUP CORPORATION (the “Company”) disclosed the supplemental data for the consolidated financial statements via the Company's website on February 2, 2023.

Pages: 18
Words: 6,175
Type: Financial

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