BANDAI NAMCO Group

Mid-term Plan
Apr. 2012 – Mar. 2015

Table of Contents
FY2012.3 Performance
New Mid-term Plan
Review of the Past Years
Direction of New Mid-term Plan
New Mid-term Plan: Focus Strategies(1) Business Area Strategies(2) Functional Strategies

1

FY2012.3 Performance

3Q Results and Full Year Forecasts
Billion yen
FY2011.3
Results

FY2012.3
Results / Forecasts

3Q(9mo.)Full Year

3Q(9mo.)Net Sales

288.0

394.1

323.3

Operating
IncomeRecurring
Income

16.6

16.3

16.5

Net Income
CapitalExpenditures

Full Year

YOY
3Q(9mo.)Full Year

440.0

+35.3

+45.9

30.7

31.5

+14.1

+15.2

16.3

30.8

31.5

+14.3

+15.2

3.6

1.8

16.3

18.5

+12.7

+16.7

8.5

10.7

11.0

15.0

+2.5

+4.3

Depreciation

12.4

18.0

13.3

20.0

+0.9

+2.0

R&D
Investments
Advertising
Expenses
Personnel
Expenses

29.7

40.1

29.8

38.0

+0.1

-2.1

19.5

28.7

21.3

31.0

+1.8

+2.3

29.8

40.3

31.2

43.0

+1.4

+2.7

2

Performance by Business
Upper Cell : Net Sales
Lower Cell : Operating Income

Billion yen

FY2011.3
Results
3Q(9mo.)Toys and
Hobby
Content
Amusement
Facility
OthersCorporate andElimination
Consolidated

FY2012.3
Results / Forecasts

Full Year

3Q(9mo.)YOY

Full Year

3Q(9mo.)Full Year

116.3
13.5
130.2
3.5
46.4

158.3
13.8
179.9
3.0
62.3

133.5
17.4
151.4
11.6
45.9

172.0
17.0
217.0
14.5
61.0

+17.2
+3.9
+21.2
+8.1
-0.5

+13.7
+3.2
+37.1
+11.5
-1.3

1.4
13.4
0.8
-18.4
-2.7
288.0

1.7
18.5
0.8
-24.9
-3.1
394.1

1.8
17.7
1.7
-25..3
-1.9
323.3

2.0
27.0
1.5
-37.0
-3.5
440.0

+0.4
+4.3
+0.9
-6.9
+0.8
+35.3

+0.3
+8.5
+0.7
-12.1
-0.4
+45.9

16.6

16.3

30.7

31.5

+14.1

+15.2

Performance by Business Toys and Hobby
Billion yen
FY2011.3
Results
3Q(9mo.)FY2012.3
Results / Forecasts

Full Year

3Q(9mo.)YOY

Full Year

3Q(9mo.)Full Year

OP

116.3
13.5

158.3
13.8

133.5
17.4

172.0
17.0

+17.2
+3.9

+13.7
+3.2

OP Margin(%)

11.7

8.7

13.1

9.9

-

-

Net Sales

Overview-Strong performance by KAMEN RIDER /POWER RANGERS (Japan) products.
-Earnings contributed from card products.

Current status-Good start of new PrettyCure series.

-Started broadcasting of new POWER RANGERS
series in Japan on February 26.
-Developing POWER RANGERS in the U.S.
and Europe.

-The Little Battlers / products designed for
adult customers gained popularity.
→Expanded target customers.

3

Performance by Business Content
Billion yen
FY2011.3
Results
3Q(9mo.)FY2012.3
Results / Forecasts

Full Year

3Q(9mo.)YOY

Full Year

3Q(9mo.)Full Year

OP

130.2
3.5

179.9
3.0

151.4
11.6

217.0
14.5

+21.2
+8.1

+37.1
+11.5

OP Margin(%)

2.7

1.7

7.7

6.7

-

-

Net Sales

Overview

Current status-SNS members breakthrough 10 million.
-Strong performance by arcade game→sales expected to exceed ¥10 bn. in FY 2012.3.
machines and prizes.
-Prizes for arcade game machines remain strong.
-Domestic home video game software
gained popularity.
-Launching game software Soul Calibur V.
TALES OF XILLIA
Mobile Suit Gundam Extreme VS.
-Strong sales of SNS contents.
-Visual package software gained popularity.
Mobile Suit Gundam UC
TIGER&BUNNY

Performance by Business Amusement Facility
Billion yen
FY2011.3
Results
3Q(9mo.)FY2012.3
Results / Forecasts

Full Year

3Q(9mo.)YOY

Full Year

3Q(9mo.)Full Year

OP

46.4
1.4

62.3
1.7

45.9
1.8

61.0
2.0

-0.5
+0.4

-1.3
+0.3

OP Margin(%)

3.1

2.9

4.0

3.3

-

-

Net Sales

Overview

Current status-Characters facilities and events helped to
attract customers.

-Solid performance of facilities especiallyfor families.
-Focusing on efforts to differentiate our facilities.
→POWER RANGERS series introduced into
character-packaged entertainment facilities.

Year-on-year existing store sales in Japan
Oct.

Nov.

Dec.

3Q
(3mo.)

3Q(9mo.)

2nd half
Forecast

Full Year
Forecast

103.0% 99.8%

99.7%

97.6%

98.9% 101.9%

97%

100%

1st Half

4

BANDAI NAMCO Group

Mid-term Plan
Apr. 2012 – Mar. 2015

Review of the Past Years

5

Previous Mid-term Plans
Objectives of the Management Integration
Aiming at a major step forwardin the entertainment business.

Mid-term Plan

Mid-term Plan

Apr. 2006 – Mar. 2009

Apr. 2009 – Mar. 2012

Development ofour management base.
→Generating synergies.
-Restructured organization.
-Strengthened financial base.
-Aligned corporate culture andhuman resources.

Development of a
global base for growth.
→Globalization-Invested in growing business areas.
-Reinforced profitability to support
up-front investments.

Transition of Results
Billion yen
FY2011.3 FY2012.3
Forecasts

FY2007.3

FY2008.3

FY2009.3

FY2010.3

Net Sales

459.1

460.4

426.3

378.5

394.1

Operating Income
Recurring Income
Net Income

42.2
45.6
24.2

33.4
36.1
32.6

22.3
24.5
11.8

1.8
1.9
-29.9

31.5
16.3
31.5
16.3
1.8
18.5
Operating Income

Net Sales

440.0

500
5,000

50
500

400
4,000

40
400

300
3,000

30
300

200
2,000

20
200

100
1,000

10
100

0

FY2007.3
2006

FY2008.3
2007

FY2009.3
2008

FY2010.3
2009

FY2011.3
2010

Mid-term Plan

Mid-term Plan

2006-20082009-2011

FY2012.3
2011

6

Mid-term Plan 2009-2011 Pursued Goal
2005 2006

2007

2008

2009

2010

2011

2012

Focused on:

Development of a global base for growth.

Initiatives to boost
profitability in
the Japan market

Business expansion
in the U.S. andEurope markets

Mid-term Plan 2009-2011 Financial Results2005 2006

2007

2008

2009

2010

2011

2012

Operating Income

Net Sales Billion yen
500
5,000

50

e
anc g
m
for verin
r
e
P eco
R

400
4,000
300
3,000

2,000
200

40
30
20

1,000
100

10

0

FY2007.3
2006

FY2008.3
2007

FY2009.3
2008

FY2010.3
2009

Recorded significant losses in the first year,
mainly in Content business, on failure to
respond to changes in the business environment.

FY2011.3
2010

FY2012.3
2011

BANDAI NAMCO
Restart Plan

- Transforming into a speedy group- Improving profitability and strengthening
financial standing7

Mid-term Plan 2009-2011 Achievements
and Issues
Toys and
Hobby

Japan: Implemented strategy of achieving a No. 1 position.
Overseas: Struggled particularly in the U.S. and Europe.

Content

Japan: Positive effects from Restart Plan.
Overseas: Struggled with home video game softwarein the U.S. and Europe.

Amusement
Facility

Opened differentiated amusement facilities.
Challenges in developing new earnings drivers.

All domestic Strategic Business Units achieved some success.
All overseas Strategic Business Units struggled.
Still in the recovery stage at Content business.

Direction of New Mid-term Plan

8

Group Mission and Vision
MissionDreams, Fun and Inspiration
Vision

The Leading Innovatorin Global Entertainment

Mid-term Vision9Mid-term Vision

EmpowerGain Momentum

Accelerate
Evolution

Achieve record profits.

Implement a
growth strategy.

Enhance our IP value
business model.

Operating Income¥42.5 billion

Net Sales¥480 billion

Achieve record profits.

Growth to generate
record sales.

Acquire 30 million
BANDAI NAMCO
ID members.
Enhancement of
our IP model.

Numerical Targets
Billion yen

FY 2015.3 Targets
Net Sales

480 billion yen

Upper Cell : Net Sales
Lower Cell : Operating
IncomeToys and
Hobby
Content

Operating
Income42.5 billion yen

Amusement
Facility
Others

ROE

10%

Corporate andElimination
Consolidated

FY2012.3 FY2015.3
Forecasts Targets

14.5

220.0
22.0
220.0
20.0

61.0

70.0

2.0

-3.5

3.5
25.0
1.0
-55.0
-4.0

440.0

4,80.0

31.5

42.5

172.0
17.0
217.0

27.0
1.5
-37.0

10

Top Management

From April 2012

Toys and
Hobby
Core Company:
BandaiPresident & CEO Executive Vice
President
Kazunori Ueno
Mitsuaki Taguchi

Content

NAMCO BANDAI Holdings
President & CEO
Shukuo Ishikawa
Executive Vice President
Kazunori Ueno

Core Company:
President & CEO Executive Vice
NAMCO BANDAI
President
Satoshi Oshita
Games
Shin Unozawa

Amusement
Facility
Core Company:
NAMCO

President & CEO
Masahiro Tachibana

New Mid-term Plan: Overview
Mission & Vision

Mid-term
VisionDreams, Fun and Inspiration
The Leading Innovator in Global Entertainment

Gain Momentum
Net Sales: ¥480 billion

Achieve record profits

Focus Strategies

Business
Area
Strategies

Functional
Strategies

Accelerate Evolusion

Empower
Operating Income: ¥42.5 billion

Basic Business Area
Japan
Profit Recovering
Area U.S., EU
New Growth Area
Asia

Implement a
growth strategy

Acquire 30 million BANDAI
NAMCO ID members.

Enhance our IP value
business model

Toys & Hobby

Content

Amusement Facility

Toys & Hobby

Content (Japan)

Amusement
Facility(Japan)Arcade game, SNS,
Visual & Music

Toys & Hobby(U.S. & EU)

Video Game
Software

Toys & Hobby(Asia)

Arcade Game

Group-wide Network Strategy(Japan)(Worldwide)(Asia)

Amusement
Facility(Asia)

Human Resources Strategy

11New Mid-term Plan: Focus Strategies(1) Business Area Strategies

Toys and Hobby

Basic Business Area
Achieve profitable
expansion in basic
business area. Japan

Toys & Hobby

Content
Content (Japan)(Japan)Arcade game, SNS,
Visual & Music

Toys & Hobby(U.S. & EU)

Video Game
Software

Toys & Hobby

Arcade Game

(Asia)(Asia)

Amusement
Facility
Amusement
Facility(Japan)Profit Recovering Area
Recover low-profit andloss-making businesses.

U.S., EU

(Worldwide)

New Growth Area
Create and develop
new growth area.

Asia

Amusement
Facility(Asia)(2) Functional Strategies
Group-wide Network Strategy

Human Resources Strategy

New Mid-term Plan: Focus Strategies

12New Mid-term Plan: Focus Strategies(1) Business Area Strategies

Toys and Hobby

Basic Business Area
Achieve profitable
expansion in basic
business area. Japan

Toys & Hobby

Content
Content (Japan)(Japan)Arcade game, SNS,
Visual & Music

Toys & Hobby(U.S. & EU)

Video Game
Software

Toys & Hobby

Arcade Game

(Asia)(Asia)

Amusement
Facility
Amusement
Facility(Japan)Profit Recovering Area
Recover low-profit andloss-making businesses.

(Worldwide)

U.S., EUNew Growth Area
Create and develop
new growth area.

Asia

Amusement
Facility(Asia)(2) Functional Strategies
Group-wide Network Strategy

Human Resources Strategy

Focus Strategies(1)Business Area Strategies Basic Business Area
Toys and Hobby (Japan)
Ｆ

Ａｇｅ 0

3

5

7

9

12

15

20

30

40

Ｍ

Preschool-age children

Elementary school-age boys

Strengthen long-established characterproducts.

Continue introducing IP into various productcategories.

Promote tie-ups
Develop IP by fully
utilizing media.
among the categories.

Develop strong IP and products for each target customers.

Achieve overwhelming No.1 share in all categories in Japan !

13

Focus Strategies(1)Business Area Strategies Basic Business Area
Content (Japan)
Arcade Game, PrizeSNS

Strengthen links with amusement facilities.
Diversify sales approaches forarcade game machines.
Services linked to mutual utilizationof game cards.
Expand market share for prizes.

Leverage our strengths to launch rapidly.

Explore new distribution channels.

Developed inhouse.

Visual and Music content

Smartphone SNS
games withoverseas markets
in mind.

FeatureContents

Developed jointly.

Age-specific Gundam strategy.
Develop multiple animations fordifferent age groups.
Create new content.
Strengthen lineups for the high-end
and female markets.

Gundam,
MACROSS,
etc.

Achieve No.1 positionin each market !

Focus Strategies(1)Business Area Strategies Basic Business Area
Amusement Facility (Japan)
Advance marketing by targetedcustomers.
Families
Younger
generations

Establish chain store management.
Standardize and improve services

Seniorgenerations

Highly efficient operation

Develop models to utilize IP at facilities.

Achieve No.1 share !

14

Focus Strategies(1)Business Area Strategies Profit Recovering Area
Toys and Hobby (U.S., Europe)
Carry out integrated brand management of the U.S. and Europe.

EuropeBusiness unit

U.S.

Development of major IP brand management
unified in the U.S. and Europe.
Expansion of areas by extending the U.S. and European market.

Focus Strategies(1)Business Area Strategies Profit Recovering Area
Video Game Software
Boost profitability and efficiency. Restructure the business in the
U.S. and Europe.
Utilize NAMCO BANDAI Studio.

Launch franchise
titles that can belinked witharcade gamemachines.

Rapidly launchseasonal titles.

Narrowing down to franchise titles
developed in Japan.
Overseas bases focusing onsales and marketing.

Selection and concentration in titles.

15

Focus Strategies(1)Business Area Strategies New Growth Area
Toys and Hobby (Asia)
Conduct Japan-originated businessactivities simultaneously in Asia.

Arcade Game (Asia)
Actively target Asian andemerging markets.

Reinforce development of existing IP.
Strengthen Japan-Asia cooperation in thehobby and collectible toy businesses.
Transmit
Information.
Develop andmanufacture
Products.
Sell products.

Expand range of redemption machines
overseas, where demand is strong.
Strengthen development of prizes.

-Visual content
distribution.
-Events.
-Develop products
tailored to local needs.
-Launch online sales.

Amusement Facility (Asia)
Start full-scale development of facilities
using popular IP at the local market.

New Mid-term Plan: Functional Strategies

16New Mid-term Plan: Focus Strategies(1) Business Area Strategies

Toys and Hobby

Basic Business Area
Achieve profitable
expansion in basic
business area. Japan

Toys & Hobby

Amusement
Facility

Content
Content (Japan)(Japan)Arcade game, SNS,
Visual & Music

Toys & Hobby(U.S. & EU)

Video Game
Software

Toys & Hobby

Arcade Game

(Asia)(Asia)

Amusement
Facility(Japan)Profit Recovering Area
Recover low-profit andloss-making businesses.

U.S., EU

(Worldwide)

New Growth Area
Create and develop
new growth area.

Asia

Amusement
Facility(Asia)(2) Functional Strategies
Group-wide Network Strategy

Human Resources Strategy

Focus Strategies(2)Functional Strategies Group-wide Network Strategy
Marketing tools to accelerate horizontal integration across the Group.
ONLINEPRIZE

VENDING
MACHINE

ARCADEMACHINETOY

VIDEO ON
DEMAND

SNS

GAME

SOFT
WARE

EVENT

FACILITY VISUAL

NETWORK

LIVE

MUSIC

Existing media
and platforms

Offer products, content andservices linked directly to users.

17

Focus Strategies(2)Functional Strategies Human Resources Strategy
Promote hiring and training of valuable personnel to takethe Group’s future.

HiringTraining

Hire new graduates globally.

Promote employees based
overseas more actively.

Accelerate worldwide
personnel strategy.

Business globalization.

Implement strategic
personnel transfers.

Offer training programs.

Identify personnel capableof managing multiple
business areas.

Cultivate future business leaders.

New Mid-term Plan: Strategies by Business

18

Strategies by Business Toys and Hobby
True globalization: Become “the premier company” in the characterbusiness by spreading our strength globally.
Basic Business Area
Toys & Hobby (Japan)

Profit Recovering Area

New Growth Area

Toys & Hobby (U.S., EU)

Toys & Hobby (Asia)

Focus Strategies
Carry out integrated brand management of
the U.S. and Europe.
Conduct Japan-originated business activities
simultaneously in Asia.
Become overwhelming No. 1 in Japan.

Numerical Targets in
FY2015.3
Net Sales¥220 billion

Operating
Income¥22 billion

Enhance competitiveness through value chain reform.

Strategies by Business Toys and Hobby
Enhance competitiveness through value chain reform.
Initiatives to boost product development
and manufacturing.
Cooperation across regions.
Faster response and manufacturing ofproduct at more competitive prices.

Reinforce and increase the efficiency ofdevelopment and manufacturing byconcentrating functions in fewer locations.

Consider manufacturing in areas
other than China and Thailand.

19

Strategies by Business Content
Become the No. 1 Content Company in Japan & borderless development:
Offer our customers any genre of content such as games, visual andmusic content, and also deliver them overseas.
Profit Recovering Area

Basic Business Area
Arcade Game (Japan)
SNS (Japan)

New Growth Area

Video Game Software(Worldwide)

Visual & Music (Japan)

Focus Strategies
Reconstruct existing business:
Strategy of achieving No. 1 share.
Maximize business integration
using IP as an axis.

Arcade Game (Asia)

Numerical Targets in
FY2015.3
Net Sales¥220 billion

Operating
Income¥20 billion

Form a network strategy scheme.

Strategies by Business Content
Spin off plannedon April 2, 2012

NAMCO BANDAI Studio

Strategies to maximize businessintegration using IP as an axis.
Transmit IP to unexplored regions
and exits.

Content development(arcade game machines, video gamesoftware, networked games, etc.)

Integrated game development teamthat can respond quickly.
Introduce systems and mechanisms
focused on development.

Enhance content
development skills.

IP A

Video Arcade
SNS PC Video Music Others
game game

Japan
U.S.
EU
Asia

Improve efficiency.

20Strategies by Business Amusement Facility“Become an overwhelming leader in the market:
Strive to obtain 300% customer satisfaction and 30% market share”
Basic Business Area

New Growth Area

Amusement Facility (Japan)

Amusement Facility (Asia)

Focus Strategies
Advance marketing by customer segment.
Establish chain store management.
Develop models to utilize IP at facilities.

Numerical Targets in
FY2015.3
Net Sales¥70 billion

Operating
Income¥3.5 billion

Explore overseas markets.

New Mid-term Plan: Focus Strategies(1) Business Area Strategies

Toys and Hobby

Basic Business Area
Achieve profitable
expansion in basic
business area. Japan

Toys & Hobby

Content
Content (Japan)(Japan)Arcade game, SNS,
Visual & Music

Toys & Hobby(U.S. & EU)

Video Game
Software

Toys & Hobby

Arcade Game

(Asia)(Asia)

Amusement
Facility
Amusement
Facility(Japan)Profit Recovering Area
Recover low-profit andloss-making businesses.

U.S., EU

(Worldwide)

New Growth Area
Create and develop
new growth area.

Asia

Amusement
Facility(Asia)(2) Functional Strategies
Group-wide Network Strategy

Human Resources Strategy

21Capital Policy
Maintain current policy for return of profit toshareholders.

Dividend

Target a consolidated payout ratio of 30% based ona stable dividend payments of 24 yen per share.
Continuously consider for capital efficiency.

Share
Buy-back

OthersUpon consideration of funds on hand,
performance trends, recent share price trends
and existence or non-existence of investment proposals.
Special shareholder benefits: respond to diversifying
needs.
Selective system: gift certificates for kids,
meal certificates, points to buy
Group products online, donations.

Mid-term Vision22

Note on Projections
This document contains forward-looking statements and information related to the BANDAI NAMCO Group thatare based on our knowledge as well as various assumptions made on the basis of information currently available.
The words “forecast,” “plan,” “target,” “estimation,” “projection,” “intend,” “will” and similar expressions, as
related to the Group, are intended to identify forward-looking statements and information. Actual results could
differ materially from those projected in such forward-looking statements.

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