NEWSLETTER

March 2019
BANDAI NAMCO Holdings Inc.

BANDAI NAMCO Mirai-Kenkyusho
5-37-8 Shiba, Minato-ku, Tokyo 108-0014

Interview with the President

Continuing to strengthen our stable earnings
platform as we aim for sustained growth
We are about to enter the second year of the BANDAI NAMCO Group Mid-term
Plan that started in April 2018. In this issue of the newsletter, BANDAI NAMCO
Holdings’ President Mitsuaki Taguchi discusses the results trend in FY2019.3, theCompany’s organizational structure in FY2020.3, and the status of initiatives
under the Mid-term Plan.
The results for the first nine months of
the fiscal year have been announced.
Taguchi: In the first nine months of FY2019.3,
we achieved record-high results, with net salesof ¥528.7 billion and operating profit of ¥69.8
billion. Rather than a breakthrough perfor-

mance by a single business, these results reflect
generally favorable performances by all ofour businesses.
In the Toys and Hobby Unit, we had favorable results in Japan and overseas with Gundam
plastic models and products for the mature
fan base, such as collectible figures. Also, ineach region, popularity was enjoyed by products
and services that leverage established IP*,such as DRAGON BALL and KAMEN RIDER
in Japan and the Mobile Suit Gundam seriesin Asia.
In the Network Entertainment Unit, competition is intensifying. In this setting, mainstay
game application titles maintained high levelsof popularity, including DRAGON BALL, ONE
PIECE, and THE IDOLM@STER. In addition,
in home video games, SOULCALIBUR VI, a
new worldwide title, got off to a favorable start,
and repeat sales of existing titles were also firm.
In the Real Entertainment Unit, sales of
new arcade game products were solid, andwe moved ahead with the opening of new-­format amusement facilities.
In the Visual and Music Production Unit,sales of mainstay IP packaged products, suchas LoveLive! Sunshine!! and IDOLiSH7, were
firm, and live events were popular.
In the IP Creation Unit, we released new
visual products that leverage mainstay IP, suchas the Mobile Suit Gundam series and LoveLive!
*IP: Characters and other intellectual property

Sunshine!!, and we took steps to build interest
among consumers.
The Company changed its forecast for
the full fiscal year.
Taguchi: When we announced the results forthe first nine months, we revised the full-year
forecasts to net sales of ¥710.0 billion andoperating profit of ¥75.0 billion. For the fourth
quarter, we expect our results to be down year
on year. However, this reflects such factors
as the product and service lineup in the fourth
quarter and initiatives targeting future businessdevelopment, as well as a different productmix from the fourth quarter in the previous
fiscal year, when new home video game titles
and repeat sales were strong.
In the Toys and Hobby Unit, we anticipate
a certain level of expenses in preparation for
FY2020.3, including launch expenses for new
IP, promotional expenses for the 40th anniversary of Mobile Suit Gundam, and global
e-commerce infrastructure enhancement
expenses. Overseas, the difference in productmix is expected to have an influence in Asia,
while the forecast for Europe and the Americas
incorporates losses associated with the careful
review of our product lineup.
In the Network Entertainment Unit, welaunched multiple major home video game
titles in the fourth quarter, and accordingly
we are planning for upfront expenses associatedwith development costs. Furthermore, we
expect sales of repeat titles to stabilize in the
fourth quarter, following the sales promotion
campaigns that we implemented in the third
quarter. In network content, we anticipate

Mitsuaki Taguchi
President & Representative Director,
BANDAI NAMCO Holdings Inc.
continued steady results with major titles.
However, given the increasingly intense competition, we will carefully scrutinize our content
in development and our titles in distribution,
and as a result we plan to expense certain
work-in-process.
Also, in the Real Entertainment Unit, we
anticipate expenses associated with the closureof multiple facilities, the relocation of the Head
Office, etc. In the Visual and Music Production
Unit, we expect to see an effect from the differences in the lineups of packaged products
and live events. Also, in the IP Creation Unit,
we do not anticipate results on the same level
as the previous year, when licensed product­revenue was favorable.
In the fourth quarter, we will implementa variety of forward-looking measures in allof our businesses, and we will aim to surpassthe record-high results that were set in
FY2018.3. Rather than focusing only on thecurrent market environment, I believe that weneed to work to achieve sustainable growth.
To that end, we should continue to reinforce
our foundation in order to facilitate further
stable increases in earnings, whether or not
we have hit products.

March 20191

Interview with the President

In the second year of the Mid-term Plan, we
will continue to step up the pace at which wetake on challenges without fearing change.
Taguchi: The basic dividend policy of the

BANDAI NAMCO Group is to provide areturn to shareholders that targets a total return
ratio of 50% or more based on stable dividend
payments of 2% of DOE (dividends on equity),
while maintaining a stable level of dividends
over the long term and focusing on the costof capital.
In accordance with this basic policy, theannual per-share dividend forecast for FY2019.3
has been revised to ¥123, with a base dividendof ¥36 per share and a performance-based
dividend of ¥87 per share. An interim dividendof ¥18 per share has already been paid, andaccordingly the year-end dividend will be ¥105
per share.
There will be a change in the leadersof the Unit core companies.
Taguchi: In the BANDAI NAMCO Group,

the presidents of the core companies in thefive Units also serve as directors of the holding
company. With this structure, we are conducting rapid management decision-making
and execution.
Satoshi Oshita will be retiring. Mr. Oshita
is the President and Representative Directorof BANDAI NAMCO Entertainment Inc., thecore company in the Network Entertainment
Unit. Yasuo Miyakawa, who is currently the
President and Representative Director of
SUNRISE INC., the core company in the IP
Creation Unit, will become the President andRepresentative Director of BANDAI NAMCOEntertainment Inc.
Mr. Miyakawa has many years of experience in IP creation, which is the source of
the IP axis strategy. In addition, he has extensive experience in a wide range of businessfields, including toys and digital content. He
has also taken on new challenges without
being constrained by conventional wisdom,with a central focus on challenges, such as
the installation of an life-size Gundam statue
and the simultaneous roll-out of visual products
through multiple windows. Among the Group’s
Units, the Network Entertainment Unit faces

2

BANDAI NAMCO NEWSan especially rapid pace of change in its operating
environment, and I believe that Mr. Miyakawa
will be an excellent leader of this Unit.
Who will be the new president of
SUNRISE?
Taguchi: The SUNRISE President and Rep-

resentative Director will be Makoto Asanuma,
who is currently Senior Managing Director
at SUNRISE. Mr. Asanuma has many yearsof experience with products and services thatleverage IP, such as games and digital content.
The mission of the IP Creation Unit includes
not only creating IP but also working to maximize IP value through close collaboration
with other businesses. I expect Mr. ­Asanuma
to further advance Groupwide initiatives related
to the creation and cultivation of IP.
I believe that this change in leaders will
have the effects of integrating the differing
viewpoints in visual products and games,
providing a spur to action, and fostering thecreation of new value in each Unit.
It has been a year since the start of
the Mid-term Plan.
Taguchi: This Mid-term Plan reflects the ideathat we must adapt to changes in the times

and in fans, as expressed by the key word
“CHANGE” in the Mid-term Vision. To that
end, we are aiming for continued change inall areas without being constrained by conventional wisdom. We are now taking on avariety of challenges to squarely face thechanges in our operating environments andusers in order to determine what kind of

Would you discuss the strengths of

Do you have a message for

the BANDAI NAMCO Group?
Taguchi: As I mentioned, our greatest strengthshareholders?
Taguchi: The mission of the BANDAI NAMCO

is the IP axis strategy, under which we develop
a wide range of businesses centered on IP. In
addition, another strength is that we have people
with experience in multiple fields, rather thanjust a single field. We are taking steps to conductpersonnel exchanges involving young andmid-career employees working across Unit
boundaries. For example, employees who havebeen in charge of the production of Gundam
plastic models might be given experience inthe production of Gundam series visual products
and games. IP contains a variety of focus points
that highlight its appeal through products andservices. I believe that employees who haveexperience in multiple business categories
are a major source of strength for BANDAI
NAMCO. They enable us to cultivate an extensive understanding of differences and to focus
on IP with a 360-degree view. Moving forward,
BANDAI NAMCO will strive to build a reputation as a corporate group that rolls out
products and services in a unique manner andthat fully leverages the appeal of IP.

Group is to provide “Dreams, Fun and Inspiration,” through our products and services,and our vision is to become “the Leading
Innovator in Global Entertainment.” Group
employees are working each day with a senseof pride and responsibility to provide “Dreams,
Fun and Inspiration,” that are indispensable
in daily life.
As our employees boldly take on challenges,
such as new business models and new IP,
they will have both successes and failures.
The employees who acquire that kind ofexperience are an important human resource
who will support the BANDAI NAMCO
Group in the years ahead. The Group will
establish the frameworks needed to support
our employees as they take on challenges. I
think that our shareholders can look forward
to exciting developments as the Group takes
on future challenges.

Directors at Principal Companies in the BANDAI NAMCO Group (as of April 1, 2019)
BANDAI NAMCO Holdings Inc.

BANDAI CO., LTD.

President and Representative
Director

President and Representative
Director

Mitsuaki Taguchi

BANDAI NAMCO Entertainment Inc.

SUNRISE INC. Taking office from April 1, 2019 (planned)

Yasuo Miyakawa

Makoto Asanuma

President and ­Representative
Director

President and R­ epresentative
Director

BANDAI NAMCO Arts Inc.

Shuji Ohtsu

Managing Director

Yoshitaka Tao

Director

Yuji Asako

Director

Akihiro Sato

Masaru Kawaguchi

Director

Nobuhiko Momoi

Director (Part-time)

President and Representative
Director

Masaru Kawaguchi

Director

Director (Part-time)

Satoshi Oshita

Director (Part-time)Taro Tsuji

Director (Part-time)

Hitoshi Hagiwara

Director (Part-time)

Yusuke Fukuda *Director (Part-time)

Kazumi Kawashiro

Director (Part-time)

Nao Udagawa

Director (Part-time)

Yasuo Miyakawa

BANDAI NAMCO Entertainment Inc.

Vice President and­Representative Director

Satoshi Kono
Hideyuki Kurita

Director

Yuka Sakurai

Director

Kenji Hamada

Director

Kimikazu Ueyama

Director (Part-time)

Kiyoko Matsumura *Yuzuru Matsuda
Satoko Kuwabara

President and Representative
Director

Director (Outside)

Mikiharu NomaManaging Director

Nao Udagawa

Director

Kazunori Goka

SUNRISE INC.

Director

Toru Konno

Director

Hiroshi Kawasaki

President and Representative
Director

Mitsuaki Taguchi

Director

Daisuke Uchiyama

Director

Shuji Ohtsu

Director

Masahiro Shimizu

Director

Yuji Asako

Director (Part-time)

Naoki Katashima

Director (Part-time)

Masaru Kawaguchi

Director (Part-time)

Masaru Kawaguchi

Director (Part-time)

Yasuo Miyakawa

BANDAI NAMCO Amusement Inc.

President and Representative
Director

Director (Part-time)

Hitoshi Hagiwara

Director (Part-time)

Kazumi Kawashiro

President and Representative
Director

Hitoshi Hagiwara

Director (Part-time)

Makoto Asanuma

Executive Vice President

Kazuya Kiyoshima

Director (Outside)

Yuzuru Matsuda

Director

Haruo Iwayaguchi

Director (Outside)

Satoko Kuwabara

Director

Yoshiyasu Horiuchi

Director (Outside)

Mikiharu Noma

Director (Part-time)

Shunji Inoue

Director

Director (Outside)

Yasuo Miyakawa

Kazumi Kawashiro

Executive Director

Director (Outside)

Following the General Meeting of Shareholders scheduled for June 2019

New president

Please discuss the forecast for dividends

value we can generate in each business inthe years ahead.
With the IP axis strategy, which is ourgreatest strength, we will rapidly change our
products and services, as well the methods ofproviding value, in line with the times. On
the other hand, no matter what the age, there
will be no change to the fact that IP itself isthe core of our business. It is essential that
we provide new value through our products
and services by fostering innovation in established IP and by creating and cultivating new
high-quality IP. It is important that we do notlimit our initiatives targeting high-quality,
appealing IP to Units within the Group. Rather,
we need to cooperate with a wide range ofpartners in order to create and nurture IP. We
will work from a variety of angles, including
not only creating products and services but
also advancing internal, Groupwide projects;
making investments from the BANDAI
NAMCO Content Fund; and reinforcing partnerships with parties outside the Group. In
this way, we will strive to implement initiatives
that go one step further than anything we havedone in the past.
In the second year, which will be the halfway
point of the Mid-term Plan, we will further
increase the number of challenges that wetake on throughout the Group and in eachbusiness. Through a process of trial and error,
we will leverage each of our results and work
to rapidly move on the next stage. First, we
will try new things and work to rapidly produce
results. When the outcome is positive, we will
accelerate the process, and when it is not, we
will change direction. In this way, I would
like to see the Group work rapidly through aprocess of hypothesis and testing without
fearing change.

Director (Part-time)

Takaaki Suzuki

Director (Part-time)

Makoto Asanuma

Makoto Asanuma *Managing Director

Shin Sasaki

Director

Naoya Masaki

Director (Part-time)

Yasuo Miyakawa *Director (Part-time)

Masayuki Ozaki

Director (Part-time)

Yoshitaka Tao

Director (Part-time)

Kazuhiro Takenaka

Director (Part-time)

Hiroshi Kawasaki

Director (Part-time)

Hirofumi Inagaki

Director (Part-time)

Yoshiyasu Horiuchi

Director (Part-time)

Satoshi Kono

Seiji Kagawa


Newly appointed* Change in position
March 20193

Closeup

We will establish a governance system that
addresses the requirements of society and takesteps to ensure that it functions effectively on aGroupwide basis.
As an entertainment company that provides “Dreams, Fun and Inspiration,” theBANDAI NAMCO Group is working to build a solid management foundation for
rapidly changing business environments and global markets while advancing­environmental and social activities that lead to happiness for society and stakeholders. In this section, Yuji Asako, a Director of BANDAI NAMCO Holdings Inc.,
discusses the Group’s ­corporate governance and CSR initiatives.
Would you describe your position
within the Group?
Asako: As the Division General Manager of

the Corporate Planning Division, I am responsible for communications activities for investors,
shareholders, and other internal and external
stakeholders. I am also in charge of the formulation of the Mid-term Plan, the establishmentof the governance system, the promotion of
CSR activities, and other initiatives.
What is the Company’s approach to­corporate governance?
Asako: To achieve ongoing growth in enterprisevalue over the long term, the enhancement ofcorporate governance will be an importantmanagement issue for the Group. In addition,
the field of entertainment is changing rapidly,
and to succeed in this global competition wewill need to establish a solid managementfoundation. In accordance with that view, I
am working to further strengthen the Group’s
corporate governance system.
Would you provide an overview ofthe governance system?
Asako: Since the Company’s founding,we have emphasized the inclusion of
objective, outside viewpoints in ourmanagement activities. For example, thearticles of incorporation call for two or
more outside directors. In accordancewith this approach, currently three ofthe 11 board members are independent,
outside directors. In addition, the Company uses the Audit & Supervisory Board
system, with the four Audit & Supervisory
Board members auditing the businessexecution of the Board of Directors.
Three of those four members meet thestandards for independent, outside Audit

4

BANDAI NAMCO NEWS& Supervisory Board members.
We are working to rapidly track and respondto management information. To that end, meetings of executives include the Group Business
Report Meeting, which handles data and­business reports from each Unit; the GroupManagement Meeting, which principally discusses Group management issues and strategies;
and regular weekly report meetings. In addition,
we have established the Personnel Committee
and other committees. In this way, we havesecured the governance framework.
What is the role of the Personnel
Committee?
Asako: The Personnel Committee is an advisorycommittee to the Board of Directors. Its purpose
is to objectively and neutrally consider personnel
and compensation issues regarding directors.
The majority of the members are independent,
outside directors, and the committee has astrong focus on transparency. In addition to
the Personnel Committee, the Company also
works in other ways to ensure transparency
and fairness regarding personnel issues. For
example, in the appointment of new officers,

Examples of CSR Initiatives

the independent, outside directors hold interviews with the candidates, and their opinions
are considered when decisions are made.
The Board of Directors is also­evaluated by the outside officers.
Asako: It is difficult for the Board of Directors

to evaluate itself, and accordingly objective
evaluations are conducted by the Independent
Directors and Audit & Supervisory Board
Members Committee, which comprises outside
directors and Audit & Supervisory Board
members. Specifically, an annual questionnaire
is distributed to all officers, and the results areused to identify issues where there is a gap
between the comments of inside and outside
officers. On that basis, the Independent Directors
and Audit & Supervisory Board Members
Committee evaluates the situation and provides
its opinions to the Board of Directors. In thisway, we can determine if there is a lack ofobjectivity on the Board of Directors, if theboard is functioning effectively, etc.
What were the results of the­evaluation from the Independent
Directors and Audit & Supervisory
Board M­ embers Committee?
Asako: The strong points were considered tobe the culture of the Board itself and the demon-

stration of leadership by all of the Directors,
based on their recognition of their roles. The
rapid formulation of an action plan in responseto the opinions of the Independent Directors
and Audit & Supervisory Board Members
Committee was also evaluated. This fiscal year,
we received opinions regarding tracking andresponding to risks with a global perspective,
strengthening the monitoring of major business
BANDAI NAMCO Group CO2 Emissions(t-CO2)(For the Fiscal Years Ended March 31)

We continue to implement support activities for children
in regions affected by the Great East Japan Earthquake.
<<Photo shows activities held in Ishinomaki City, Miyagi Prefecture>>companies, and taking steps to develop thenext-generation of managers and executives.
Moving forward, we will continue to respondrapidly to these opinions.

Electricity use reduction for amusement facility
amusement machines (FY2018.3)
Lighting for

1,080

amusement machinesconverted to LEDs

46

reduction in electricity use
in comparison with% fluorescent lights

What steps are being taken tostrengthen governance?
Asako: The Corporate Governance Code, which

is formulated by the Tokyo Stock Exchange,
was revised last year. In conjunction with thisrevision, we took steps to verify the Company’s
corporate governance, and the results confirmedthat our initiatives were generally in line withthe demands of society. Nevertheless, we must
continue to think about how to do an evenbetter job. The BANDAI NAMCO Group
includes more than 100 companies. We are
active in a wide range of businesses, and ouroperating environment is continually changing.
To identify risks and take full advantage ofopportunities, we will work to further enhance
our governance system, to ensure that thesignificance of that system is thoroughly
understood throughout the Company, and to
make sure that the system is functioning in asustainable, effective manner.

Contributing to the realization of a sustainable
society by building an environment that­facilitates ongoing, independent initiatives

Yuji Asako
Director,
BANDAI NAMCO Holdings Inc.

on the front lines, we are constantly asking
whether or not our CSR activities are in linewith our business activities. For example,
changing lighting to LEDs at amusement
facilities is effective not only from the viewpoint of environmental friendliness but also
from the business perspective of reducing costsby saving electricity. Considering this businessfocus, employees who are on the front linesof product and service development can engage
in independent, ongoing initiatives, thereby
facilitating contributions to the realization ofa sustainable society.

the world, I think that we need to take an evenmore rigorous approach to considering theinfluence of our products and services on society.
Furthermore, while we aim for business growth
we also need to continue to implement countermeasures to address environmental issues. Up
to this point, we have set CO2 emissions reduction targets and worked to achieve them, andfrom the current Mid-term Plan we are also
starting to manage emissions intensity* foreach Unit. As a company that provides “Dreams,
Fun and Inspiration,” to customers around theworld, we will continue to do our utmost on
Groupwide basis as we move forward.

Would you explain the Group’s
approach to CSR?
Asako: The Group’s CSR concept is “Fun For

the Future!” As a company that provides“Dreams, Fun and Inspiration,” these words
incorporate our wish to leverage BANDAI
NAMCO’s distinctive strengths in order tocontribute to the creation of a fun future. In
organizational systems, we hold regular meetingsof the Group CSR Committee. This committee
is chaired by President Taguchi, and the members include the president of each Unit’s corecompany. The committee discusses and sharesinformation about important CSR strategies.
In addition, we are working to promote specificactivities through the Group CSR Subcommittee.
This is a subsidiary organization of the GroupCSR Committee, and the participants include
people working on the front lines.
There are four important themes.
Asako: Yes, there are four important themesthat the Group is working on. These are “safetyof products and services,” “environmental consideration,” “policies regarding influence onsociety of the Group’s content and products,”
and “supply chain management.” We periodicallyverify the importance of these themes in linewith such factors as the demands of the societiesin which the Group operates and the influenceof our businesses on those societies.
What is the Group’s focus in theimplementation of CSR activities?
Asako: To foster spontaneity and continuity

The Group is also implementing support for regions affected by disasters.
Asako: We continue to offer support activities
in the regions affected by the Great East Japan
Earthquake. For example, Group employees

are now visiting these regions three times ayear and holding workshops that leverage
BANDAI NAMCO’s distinct strengths throughthe use of IP and products. In addition, weoffer shareholders the option to donate theirshareholder benefits. We combine the amountdonated by shareholders with a contribution
from the Company and donate a total of ¥10
million to Save the Children Japan. The donatedfunds are used for support activities for children
in the regions affected by the disaster.
What issues does the Group face in CSR,
and what areas require ­strengthened
initiatives?
Asako: As we expand the IP axis strategy around

What is your motto for the development of managers and employees?
Asako: I strive to ensure that we maintain consistency in our interactions with our various

stakeholders. This applies to our views andstatements as well as to our policies and points
of focus. On the other hand, the conventional
wisdom in one market might not apply in anothermarket, and the social environment also changes,
and I need to continue to emphasize modesty
in honestly accepting those facts. I am also
working to create environments in which
employees can have fun while positively andenergetically doing their work. I think thatbuilding a favorable internal environment is
one of my major duties, and moving forward
I will continue to provide energetic support
for the activities of our employees.
* CO2 emissions per unit of activity

March 20195