Oriental Land Co Ltd

Good afternoon, everyone. I'm Tomoyuki Shimoda. Thank you for taking time out of your busy schedule to attend this financial presentation. I'd like to provide you with an overview of our financial results. Please refer to page 2. We usually provide the financial results for the first nine months at this timing, but as the situation in the third quarter ended December 31st, 2024, differed significantly from the trends seen in the first half year. Today we will start by explaining the results for the three months of the third quarter to help you better understand our performance. For the results for the first nine months, please refer to page nine and the appendix. The three-month results for the third quarter are as shown here. Both net sales and operating profit increased year on year, primarily due to an increase in net sales per guest and higher performance of the hotel business segment. Please refer to page 3. As you can see, net sales and operating profit for the third quarter have grown over the years, reaching record highs in the third quarter under review. We managed to achieve both high levels of attendance and net sales per guest, exceeding the strong performance of the Tokyo Disney Resort 40th Anniversary events in the previous fiscal year by leveraging our Halloween, Christmas and other special events as well as Fantasy Springs. Guest satisfaction also remains at a high level. In the remaining few months under our current medium-term plan, we will endeavor to enhance guest satisfaction and increase net sales and operating profit. Now I'd like to elaborate on the results by segment and the reasons for changes. Please refer to page 4. Net sales for the theme park segment increased by 18.3 billion yen to 172.1 billion yen. Attendance increased year on year, owing to the opening of Fantasy Springs and a rise in the number of overseas guests, despite a decline in travel demand due to decelerated revenge spending and the termination of the Tokyo Disney Resort 40th anniversary events. For your information, attendance for the three months of the third quarter increased year on year by approximately 2%. On a monthly basis, attendance increased in October, November and December by around 2%, 3% and 2% respectively. Net sales per guest increased in terms of all revenue categories, reaching a record high. Revenue from attractions and shows climbed year on year, primarily due to increases in revenues from Disney Premier Access and Tokyo Disney Resort vacation packages. Merchandise revenue increased year-on-year, chiefly owing to the sale of products related to Fantasy Springs and a higher revenue from strong sales of products related to special events, despite the high base of year-on-year comparison due to the sale of products related to the Tokyo Disney Resort 40th anniversary in the same period of the previous fiscal year. Food and beverages revenue increased year-on-year, primarily due to the opening of new restaurants and refreshment outlets within the newly opened Fantasy Springs. Please refer to page 5. Operating profit for the theme park segment increased year-on-year by 4.3 billion yen to 59.6 billion yen. The merchandise and food beverages cost ratio rose overall year-on-year. While the merchandise cost ratio remained almost unchanged, the food and beverages cost ratio increased due to a surge in raw material prices, as well as the ordering of some ingredients from external parties. Personnel expenses increased year on year, primarily as a result of an upward revision of wages and a rise in personnel expenses for part-time cast members, owing to an increase in the number of hours worked due to the opening of Fantasy Springs. Miscellaneous costs increased year on year, chiefly due to a rise in sales promotion costs for strengthening measures to attract guests. Depreciation and amortization expenses increased, mainly due to the acquisition of new assets related to the opening of Fantasy Springs. Please refer to page 6. Net sales for the hotel business segment increased year-on-year by 7.3 billion yen to 31.3 billion yen as a result of an increase in accommodation revenue on the back of the opening of the Tokyo DisneySea Fantasy Springs Hotel and higher charges per room. Operating profit increased by 2.7 billion yen to 11.2 billion yen, primarily due to increases in costs resulting from the opening of the Tokyo DisneySea Fantasy Springs Hotel. In view of the ongoing robust performance of Disney hotels, we endeavour to enrich the experience we offer at the resort as a whole by starting to adjust room charges more flexibly in line with demand and providing more rooms through Tokyo Disney Resort vacation packages. Please refer to page 7. Net sales for the other business segment increased year on year by 0.2 billion yen to 4.3 billion yen, primarily owing to an increase in net sales from the monorail business, driven by a rise in the number of passengers. Operating profit increased by 0.1 billion yen to 0.7 billion yen. Please refer to page 8. At the first half-year results presentation in October 2024, we shared our outlook for the full fiscal year ending March 2025 in comparison with our initial forecast made at the beginning of the fiscal year. Now we will explain the third quarter results compared to our outlook. Although attendance in the third quarter fell slightly short of our projection due to the rainy weather in October, we expect attendance in the second half year to be as projected, owing to an increase in the fourth quarter driven by measures to attract more guests. For your reference, vis-à-vis the forecasted attendance of 28 million for the full fiscal year, attendance for the three months of the third quarter fell short by approximately 2%. On a monthly basis, attendance fell short by around 6% in October, but was roughly in line with the forecast in November and December. Net sales per guest exceeded our outlook during the third quarter, owing to increases in the revenues from Disney Premier Access and merchandise. Although revenue from Disney Premier Access will remain strong during the fourth quarter, food and beverages revenue is expected to fall short of our outlook, which will result in net sales per guest remaining as projected in the second half year. In the third quarter, net sales for the hotel business segment and other business segment and costs for the theme park segment were roughly in line with our projection announced in October 2024. The fourth quarter and second half year results are also expected to be as projected. Our initial forecast continues to be a stretch goal, but we will make all-out efforts to achieve the full fiscal year forecast by implementing a range of measures in the fourth quarter, including the sale of the college passport. Please refer to page 9. For your reference, the results for the first nine months of fiscal year 3-25 are as shown here. The degree of profit decrease has narrowed owing to an increase in net sales per guest and a higher operating profit for the hotel business segment. Please refer to page 10. In November 2024, Fantasy Springs received a Thea Award created by the Themed Entertainment Association, TEA. We are deeply honoured to have won this internationally prestigious award. We lifted restrictions on entry to Fantasy Springs on January 7, 2025, as we have been able to operate the area smoothly and maintain a high level of guest satisfaction. We have not eased the daily attendance limit at this point in time. We intend to carefully monitor and examine our park operation status and the level of guest satisfaction repeatedly. Guests still need to obtain either a fee-based or free-of-charge pass to enjoy attractions at Fantasy Springs, but we will continue to step up measures to allow more guests to experience the area. Please keep an eye on Fantasy Springs. This will be all from me. Thank you very much.