Summary of Research Findings

For this research, 131 pachinko parlor operators were randomly sampled from a total of 2,609 pachinko parlor operators nationwide listed in the “YANO Pachinko Database”. We analyzed the business performance trends over the three years from FY2017 to FY2019 based on the average value of key indicators in their financial statements.

Noteworthy Topics

Financial Performance Trends of 131 Pachinko Parlor Operators

<Sales & Cost of Sales>

Comparing the average sales for FY2019 (20,834 million yen) to that of FY2017, it dropped by 5.1%. The decrease in the number of customers and shift to new gaming machines caused the significant decline in sales. Although the average sales cost sustained composition ratio of 85% over the past few years, it diminished to 85.1% in FY2018 and 85.0% in FY2019.

<Gross Margin >

By reducing the sales cost, composition ratio of gross margin in FY2019 rose by 0.1 percentage points from the previous fiscal year to 15.0%. Nevertheless, the average gross margin dropped to 3,116 million yen, down by 1.6% from the previous fiscal year. While there are companies holding down their sales cost to secure gross margin, it was not enough to compensate for the decline in sales.

<SGA Expenses>

The average SGA expenses for FY2019 diminished by 3.0% from the preceding fiscal year, while composition ratio also dropped by 0.1 percentage points. However, as mass replacement of old gaming machines with new gaming machines is required by FY2021 to comply with the revision of Gaming Machine Guidelines that came into force in February 2018, SGA expenses may swell hereafter, exerting further pressure on profit.

<Operating Income>

Due to reductions in sales cost and SGA expenses, operating income continues to rise. It rose by 9.2% year-on-year in FY2018, and by 7.0% year-on-year in FY2019. Similarly, composition ratio has increased, from 1.8% in FY2017 to 2.0% in FY2018 and 2.2% in FY2019.

Research Outline