Oriental Land Co Ltd

Hello everyone, this is Tomoyuki Shimoda. Thank you very much for taking time out of your busy schedules to attend our company financial presentation today. Prior to today's financial results briefing, we would like to express our deepest sympathies to all those affected by the Reiwa 8 Kumamoto earthquake and their families. Thank you for watching. Furthermore, for guests who are unable to visit our parks or reschedule their visits due to the impact of this earthquake, we will provide refunds for park tickets and take other necessary measures taking into account the situation and needs of the affected areas. I will now explain the financial results for the first quarter of the fiscal year ending March 2027 and our outlook for the future. First, I will explain the financial results overview. Please turn to page 4. As you can see, here are the financial results for the first quarter. Due to the strong performance of the Tokyo DisneySea 25th anniversary events and other factors, consolidated operating cash flow, net sales and operating profit all reached record highs this quarter. Going forward, we will continue to prioritize allocating cash to growth investments and take steady steps to enhance corporate value, including shareholder returns. In our cruise business as well, preparations for the launch in fiscal year 2028 are in full swing and we are making steady progress. Thank you for watching. Compared to the same period of the previous fiscal year, we saw an increase in both net sales and profits, driven by factors such as higher attendance and higher net sales per guest. I will now explain the results by segment and the factors behind the changes. Net sales for the theme park segment increased by ¥16.1 billion to ¥147.4 billion. Attendance increased due to factors such as the Tokyo DisneySea 25th anniversary events. Net sales per guest reached a record high across all revenue categories. Attractions and shows revenue increased slightly, mainly due to a rise in revenue from Disney Premier Access. Merchandise revenue increased due to factors such as higher sales of merchandise related to Tokyo DisneySea 25th anniversary. Food and beverages revenue increased primarily driven by strong sales of menu items and food souvenirs related to Tokyo DisneySea 25th anniversary. As a reference, we will explain the trends in attendance and net sales per guest compared to the same period of the previous fiscal year. Attendance for the three months of this quarter was approximately 7% higher. By month, attendance was up approximately 4% in April, approximately 13% in May, and approximately 3% in June. Net sales per guest were up approximately 5% for the first three-month quarter. Please refer to page 7. Operating profit for the theme park segment increased by 8.5 billion yen to 37.8 billion yen. The merchandise and food beverages cost ratio decreased overall as the food and beverages cost ratio declined due to price adjustments and changes in the sales mix. Personnel expenses increased due to an increase in headcount and compensation revisions. Miscellaneous costs increased due to higher costs related to the Tokyo DisneySea 25th Anniversary events and costs related to entertainment.

Please refer to page 8.

In the hotel business segment, driven by factors such as an increase in average room rates, net sales rose by 0.7 billion yen to 29.2 billion yen, reaching a record high. The occupancy rate at Disney hotels for this quarter was 95.2%, up 1.2 percentage points, and the average room rate was ¥67,036, up ¥502. Although miscellaneous costs climbed due to decoration costs for the Tokyo DisneySea 25th anniversary events, etc., operating profit reached a record high of ¥9.2 billion, driven by factors such as an increase in net sales. Please turn to page 9. Net sales for the other business segment increased primarily due to growth in the expiry business, offsetting the impact of business restructuring. Operating profit rose by ¥0.3 billion to ¥0.5 billion, owing to a decrease in miscellaneous costs and other factors. Please turn to page 10. Driven by an increase in net sales per guest and a rise in attendance, both net sales and operating profit exceeded our initial forecast. Attendance outperformed our forecast, driven by the Tokyo DisneySea 25th anniversary events. Net sales per guest were higher than expected in total. This was attributable to higher than projected revenues from merchandise and food beverages owing to the strong performance of products, menu items, and food souvenirs related to Tokyo DisneySea 25th anniversary. For your reference, I will explain the trends in attendance and net sales per guest compared to our initial forecast. Attendance for the three-month period under review outperformed our forecast by approximately 3%. On a monthly basis, attendance was roughly on par with the forecast in April, about 5% higher in May, and about 4% higher in June. Net sales per guest also outperformed the initial forecast by approximately 4%. Costs in the theme park segment decreased due to factors such as a deferral of miscellaneous costs to the second quarter and after as well, and the lower than expected merchandise and food beverages cost ratio. As a result, operating profit exceeded our forecast.

Please turn to page 11. Next, I will explain our earnings outlook for the first half and the full fiscal year.

Please turn to page 12. Although net sales and operating profit for this quarter exceeded our forecast, driven by the strong performance of the Tokyo DisneySea 25th anniversary events, among other factors, we are maintaining our financial forecasts for the first half and the full fiscal year at this time. Taking into account factors such as weather risks. In addition to the Tokyo DisneySea 25th anniversary events, summer cool-off at Tokyo Disney Resort began on July 2nd and has been well received by guests. Moving forward into the second quarter and beyond, we will continue to strive to improve our business performance by steadily implementing our initiatives.

Please refer to page 13.

Although we expect a temporary decline in profits for the current fiscal year due to factors such as the implementation of large-scale guest room renovation work at some Disney hotels beginning in the second quarter, we will continue to aim to contribute to our financial performance by implementing various initiatives. For example, regarding park tickets, in addition to adjusting the price tier composition, we have decided to introduce higher priced tickets. We also plan to expand the scope of facilities covered by Disney Premier Access and revise its pricing. As part of our future initiatives regarding cost control we will fundamentally review our budget management system and prioritise costs to ensure a strategic allocation of resources. In addition, by formulating budgets that reflect current conditions we will work to establish a system that enables us to execute plans as scheduled. To support our future growth, we will implement various initiatives to improve profitability, thereby generating cash to source growth investments. Our vision for theme parks is the pinnacle of happiness creation that exceeds people's imagination. Moving forward we will continue to meet the diverse needs of our guests and work to further enhance our existing services, thereby creating unique and unparalleled value. That concludes my remarks. Thank you very much.