Square Enix 2009 Annual Report Download - page 5

Download and view the complete annual report

Please find page 5 of the 2009 Square Enix annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 60

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60

To Our Shareholders
I am grateful to our shareholders for the opportunity to present the Company’s annual report
for the fiscal year ended March 31, 2009.
In the fiscal year under review, on a consolidated basis, net sales decreased 8.0% com-
pared with the previous fiscal year, to ¥135,693 million. Operating income declined 42.9% to
¥12,277 million, and recurring income decreased 40.3% to ¥11,261 million. Net income
amounted to ¥6,333 million, a 31.1% decline compared with the previous fiscal year. As a
result, the recurring income margin was 8.3%, and return on equity (ROE) stood at 4.3%.
We set dividends applicable to the fiscal year ended March 31, 2009, at ¥30.00 per share,
resulting in a consolidated payout ratio of 54.4%.
In light of the very high payout ratio, I would like to provide additional clarification. The
Company’s dividend policy is to maintain an optimal balance between performance-linked
payouts and stable returns to shareholders. In line with this policy, we have stated that our
benchmark for the payout ratio is approximately 30%. Underpinning this is our belief that the
Company should generate sustained growth and we define the key measurement for this as
growth in dividends per share. In other words, it is our policy to maintain the payout ratio at
around 30%, as the dividend increases step by step.
Although a characteristic of the entertainment industry is that it is impossible to avoid
volatility in operating results, I am conscious that such volatility is only tolerable as long as it
occurs within the context of steady growth in the Company’s core strengths.
Regrettably, the Company’s operating results for the fiscal year under review were disap-
pointing. However, this was not a reflection of a loss of core strength and I think that we have
been able to lay the groundwork for our next phase of growth. Although the payout ratio is
quite high, we judged that a dividend of ¥30.00 is an appropriate amount in these circum-
stances.
During the period under review, from a medium- to long-term strategic perspective, did we
actually make substantive progress toward sustained growth? I would now like to discuss this
point in some detail.
03