Hasbro Financial Earnings Reports (ongoing)

[griffin]

For an update on how well Hasbro is doing, plus some tidbits on a number of Transformers elements, they recently held a quarterly investor/shareholder conference call (http://www.tfw2005.com/transformers-news/conventions-15/tfw2005-coverage-of-hasbro-third-quarter-2014-earnings-conference-call-181376/).

It mentions some upcoming projects, but nothing too specific.

One thing of note is the creation "Allspark Pictures", for their live-action movies... including Transformers 5, My Little Pony and Jem.... leaving the existing "Hasbro Studios" unit to work on their TV projects.

[griffin]

There isn't much in the way of news in the latest quarterly report, but for those who are interested in these things, this is a link to all the numbers (http://www.tfw2005.com/transformers-news/conventions-15/hasbro-2015-q1-earnings-conference-call-transformers-saves-the-day-182514/)... and there are a number of conflicting elements and figures, leaving a lot of room for interpretation.

One notable thing is that they mentioned (http://www.tfw2005.com/transformers-news/transformers-movie-just-movie-31/hasbro-confirms-the-transformers-cinematic-universe-transformers-5-in-2017-182515/) to the investors about their future plans for Transformers Movies, which we already know about... plus an odd vagueness of when the next one should be out. (if a movie of this size is coming out in 2017, they should have a date known by now with a production schedule, and pre-production started with some of the cast and crew already signed up)


Our plan with the studio and filmakers you may have heard some writers being hired and we have in fact brought in Akiva Goldsman to lead a group of writers to really create a strategic plan around Transformers. We think there are any number of stories to be told from the brand that has been around for 30 years with amazing canon and mythology. We would expect the sequel to the Transformers movie [TF4] to happen in 2017.

[Zommael]

I'd guess the uncertainty surrounding when exactly the next instalment will appear might be because they've decided to go in the direction of a cinematic universe. While TF4 could be seen to be setting up elements of that (The Creators, Optimus in space, KSI hiding the remaining Autobots, the Dinobots off on their own), it may also be that they need to examine how best to approach it in TF5 before they can fully lock it in. It's also doubtful that Hasbro are privy to those plans at this stage in anything but the broadest sense, although I'd expect Paramount to be looking to the TF experts in Hasbro and elsewhere for ideas about how best to expand the property.

I'd imagine we will see a new TF movie in 2017, but kind of hope it's longer, as it now seems to be the gaps between the movies that give us the best and most creative toys.

[griffin]

TFW seems to be sitting in on these, so here are this quarter's financial details (http://news.tfw2005.com/2015/07/20/tfw2005-coverage-of-hasbro-2015-q2-conference-call-298158)for Hasbro and Transformers... for those interested.

Apparently RID has been doing well, including licensing for that line.

As expected and projected, this year has been down for Transformers, due to it being a non-Movie year.

Total revenue for Hasbro was down for the April-June quarter, dragged down by the International revenue (NOT sales, as International Revenue is the commission that Hasbro America gets from the sales in other countries, which also has to pay for the running of the Local Branches), which dropped by 9% (our region was bad, but Europe was worse), noted as being due to the strengthening US$... so expect some pain with toy prices here and in other countries as Hasbro America adjust their commission quotas from the foreign branches to compensate for the stronger US$ (which earns Hasbro America less dollars even if the foreign branches are making the same profit).
So if Hasbro America wants X amount in US$ every quarter from their foreign markets and the US$ keeps getting stronger, those markets have to raise more money from their sales in their currency to meet that same US$ payment.

It is an American company after all, so they won't care about what it does to the prices or collectors in non-American markets... they would expect the employees of those non-American markets to find a way to raise the extra money, or else they would be replaced with people who can.
That's the hard fact of a publicly listed major corporation - at the end of the day they are only in it for the money, to keep the shareholders happy. They do have a little wiggle-room to try to entice certain demographics (like ours), but ultimately, if they need to make hard decisions to meet budget requirements and save their share-price, we are not their safety net... cheap kiddie toys for parents giving gifts would be.


This is a nice timeline to download (http://news.tfw2005.com/wp-content/uploads/sites/10/2015/07/Hasbro-History.jpg), even if it is watermarked... as it has a brief timeline of Hasbro's history since it's 1923 beginning.
(not long now before their 100th anniversary)


And as a bit of a tease, we get a slide that reveals (http://news.tfw2005.com/wp-content/uploads/sites/10/2015/07/MASK-200x150.jpg) some new old toylines coming back for Hasbro soon - Jem, MASK, Micronauts, Stretch Armstrong, and Action Man.

The confirmation of MASK should excite some here, as they were a similar toyline in the 1980s (converting toys), so there were fans for both lines at the time. (especially if you had parents or relatives buy you a transforming toy as a present, and it ended up being something from MASK, Machine Men or Robotech because they didn't realise it had to say "Transformers" on the box)

I think it is sad to see that GIJoe isn't listed as one of their future brands, and instead the Action Man line is, which was what GIJoe was called in some other markets.
With almost no products during their 50th anniversary, and still no definite sign of a 3rd movie being released any time soon, maybe Retailers are just not showing any interest in the toyline at the moment after the huge mess caused by the second GIJoe movie (the movie was pushed back 9 months at the last minute by the Movie Studio to make it 3D, which killed off any interest in the toyline by Retailers who didn't want them 9 months before the Movie comes out, and it probably also meant missing factory production schedules for most of the later wave Movie toys... because they couldn't just squeeze them in later when other toylines or products were needed to be made).

[Tetsuwan Convoy]

Hrm, Interesting. Good to see some mention od MASK, but wierd that Action Man is on for a comeback. I remember it had a fairly strong shelf presence over here when it was out, with that dodgy cartoon and a butt load of toys. They sat on the shelves for ages until it faded away.

I wonder if they will doe the same big toys for A.M?

Can't wait to see what they have planned fo MASK. Probably nothing as cool as the original toys but hey, it'll be welcome look at by me

[Lord_Zed]

Hey the 2000 series Action Man from Mainframe was pretty decent as I recall, it pushed the TV 3D from Beast Wars a little further toward the end of its run.

Not sure whether to be excited for new MASK or not, those old toys were a level of quality we just wont get in non collector toys in modern times. I half expect them to like Ben 10 or something.

Speaking of which Gi Joe like Matel's MOTU seems to be confined to limited small collector aimed lines, so I wonder which any of these resurrected brands will gain traction.

[Meister]

Wow MASK, now that's bringing back some memories:)

[DELTAprime]

The way Hasbro gets commission from it's international branches always seems odd to me. You don't see Apple HQ in Cupertino getting commissions from it's sales around the world, they just take all the money they make as a global business and put it into bank accounts around the world till it's needed.

[Trent]

The way Hasbro gets commission from it's international branches always seems odd to me. You don't see Apple HQ in Cupertino getting commissions from it's sales around the world, they just take all the money they make as a global business and put it into bank accounts around the world till it's needed.

Which is why the Australian government is trying to crack down on them. the reason they do that is it's a great way to avoid tax.

[griffin]

Yes... the Hasbro model means they pay their taxes here, and in addition to paying for the costs of their local branch office and their taxes, they pay the American head office for the privilege of accessing Hasbro products to sell here.
But since the American head office requires US$, at a certain amount each quarter, the AU$ amount has to meet that required US$ amount... which means higher prices if the AU$ value plunges like it has been recently.


Those companies that have been dodging tax and GST by setting themselves up as a foreign entity exporting their products into Australia to their customers via a "local" company, is why the Government is wanting to crack down on all online sales... ruining it for those of us who were buying small amounts of products from actual foreign sources GST-free.

[DELTAprime]

The government is BS'ing you that Apple doesn't pay GST. Every receipt I get from Apple has GST as part of the total.

[prjkt]

The government is BS'ing you that Apple doesn't pay GST. Every receipt I get from Apple has GST as part of the total.

I think they're talking about the supply end of the chain, importing the products, not the retail end.

[griffin]

The government is BS'ing you that Apple doesn't pay GST. Every receipt I get from Apple has GST as part of the total.

Yes, not all are dodging both taxes, but my mis-grammatically structured sentence was meant to mean that some are dodging (regular) tax and others are dodging GST, while some are dodging both.

Tax legislation is so massive in this country, there are heaps of loopholes for the rich to pay their army of accountants to find... and the rest of us pay higher taxes to cover the cost of funding all the necessary services that they and us use. :(

[DELTAprime]

What we really need is people in Canberra that know how to run a country properly in both parties. I'm fed up with all of them and their BS.

[Trent]

What we really need is people in Canberra that know how to run a country properly in both parties. I'm fed up with all of them and their BS.

Then don't vote for them.

[DELTAprime]

Then don't vote for them.

Isn't it still illegal not to vote in Australia?

[griffin]

Isn't it still illegal not to vote in Australia?

It's never been illegal to not vote.

The law requires you to be registered to vote, and to have your name ticked off during an election (by you), but what you do after you get your name ticked off is entirely up to you.
It is not illegal to take the ballot paper from the staffer, scrunch it up in a ball, toss it over their head into a bin, and walk out. (or just stick it in the ballot box blank)

For most people though, they are fooled into thinking that they have to fill out the ballot paper, while others just think that since they went to all the trouble of getting there, lining up for half an hour, and crossing their name off, they might as well fill out the ballot paper... but you are not legally required to fill it out, because how can the authorities prove it without breaching your right to a secret voting process.

The major parties both love compulsory voting (and convincing voters that they must fill out the ballot paper on those Electoral Commission Ads), because it rakes in millions of dollars to each party. Each time you vote for a 2-house election, you are give $5 to the party you are voting for (if they get over 15% of the vote). So you are averaging an election each year from Local, State and Federal elections, and each year voters are giving up $5 to the people they are voting for (currently about $2.50 for each ballot paper).
That means about $20 million for the two major parties at each election... plus $1 per year per vote to go to their re-election war-chest, and three years ago they wanted to increase it to $4 per year per vote.

So you can see why they want to make you keep voting, and make the public think that you have to fill out the ballot paper. Because even though it is legal to put in a blank ballot paper, no politicians gets your $5 of tax-payer's money if you do put it in blank.


Okay, now that we have gotten past that rant, the point Trent was making was that you don't have to vote for the two major parties. Vote for an independent or a minor party... or donkey vote (don't fill it out properly or at all, so that it invalid).

[UltraMarginal]

I have a couple mates who walk in get signed off and walk out, one of the volunteers got into an argument with one of them once saying they must take a ballot paper. Apparently you don't even need to do that.

[griffin]

Sometimes these earnings reports will reveal some new info or details, but this one doesn't (http://news.tfw2005.com/2015/10/20/tfw2005-coverage-of-hasbro-2015-q3-earning-conference-call-304137). It is still interesting to follow, to see how the Transformers Brand, and Hasbro in general, are doing (financially).

The "bad" news is that Transformers is down by about a third for a year after a Movie year. But that isn't really bad news, as a drop off is always expected after a movie year.
The good news is that it seems that the post-movie drop off of earnings/profit for Transformers is actually better than they expected, being supported by RID (and its cartoon) and Generations.

Even Rescue Bots are doing well, along with licensing (fees) for Transformers in general (despite licensing as a whole being down), prompting comments of them needing to look into broadening the Brand on a global scale to maximise all areas, not just the core toy element.

[griffin]

For anyone else who follows these things, Hasbro have just had their financial report presentation for the first quarter of 2016, and on the whole they have improved on a year ago, but took a hit to their licensing revenue (which is only about 5% of their earnings, and their main revenue is from toys, so they shouldn't be worried about licensing if they keep failing to use it as free marketing (by making it cheap or free) in order to draw the general public into buying their main revenue products - the toys).

Despite the absence of a Transformers movie to drive up sales, they had a 20% increase over Q1 of 2015 (excluding licensing), most likely thanks to the Star Wars movie in the previous quarter (toy sales for the months after the December release).
With a Star Wars Movie every December, and a Transformers movie every June for the next three years, the revenue and profit growth should be more levelled during that time, as opposed to their recent ups and downs between each Transformers Movie.

Anyway, there are some slides and states posted up on TFW (http://news.tfw2005.com/2016/04/18/tfw2005-coverage-hasbro-2016-q1-conference-call-314364) from the presentation to digest.

[philby]

cheers :) I don't really follow stuff like that closely but I suppose it is an alright indication of the health of the brand or at least the company putting it out :)

[griffin]

The latest quarter earnings for Hasbro has been released (http://news.tfw2005.com/2016/10/17/tfw2005-coverage-hasbro-q3-2016-earnings-conference-call-326476), covering July to September, and Transformers have done well despite no new movie (most likely due to the release of Titans Return during this quarter). Plus, their International earnings look to have again grown more than their domestic earnings.

In their Domestic (North America) market, the Hasbro Brands improved 2% while their licensed/partner Brands improved 13%.
In their International markets, the Hasbro Brands improved 4%, while their licensed/partner Brands improved 30%.

In general the Boys brands (which includes Transformers) declined Domestically, but improved Internationally, while Transformers was noted as a positive performer in both markets.

Unfortunately, Machinima was heavily highlighted when praising the growth of fan-oriented Transformers products, as if it had anything to do with the success of Generations (when it managed to fizzle out in the fandom and barely got a significant amount of youtube views by the general public).

[griffin]

For those who follow these sorts of things, the first quarter revenue results for 2017 has been released by Hasbro (https://www.seibertron.com/transformers/news/hasbro-reports-revenue-and-net-earnings-growth-for-first-quarter-2017/37898/), showing that they were doing fairly well for the first 3 months of this year, despite being a period between two big movies (Star Wars in 4th quarter 2016 and Transformers in 2nd quarter 2017)... which should mean a great year for Hasbro this year. (hopefully meaning more resources spent on non-movie toylines like Generations in the next year)

International revenue was flat, but that was down to exchange rate fluctuations than a drop in sales in the non-American countries, as the International revenue is their commission syphoned from non-American countries, not the actual sales in those countries. (which is why the toys are so much more expensive in other countries than America, as we have to pay for the operating costs of the local branch of Hasbro in addition to sending money back to the head office of Hasbro... when American toys only have to pay for the operating costs of their branch of Hasbro)

[griffin]

For those who follow how Hasbro are doing as a company (which reflects on how Transformers will be doing, as it is one of their own brands), the third quarter results are out (http://news.tfw2005.com/2017/10/23/tfw2005-coverage-hasbro-third-quarter-2017-earnings-conference-call-352521), with mostly positive news, despite the impact of the ToysRUs bankruptcy hitting their revenue slightly (and it would have also affected all toy companies, so it wasn't seen as a big deal just to them).

Transformers and international markets are noted as improvers for that quarter, along with a big increase in their Hasbro Gaming division.

[griffin]

Following on from that, is an article that pretty much repeats (https://www.seibertron.com/transformers/news/toys-r-us-bankruptcy-filing-causing-holiday-woes-for-toy-companies/39888/) the point about the ToysRUs bankruptcy affecting the results of the 3rd QTR and the next QTR... but still expecting to do well despite it.

[griffin]

I've merged several of these into one topic, because there don't seem to be too many people interested in these, so I don't see much need for a new topic for each one.


The first quarter of 2019 earnings report was just released (https://news.tfw2005.com/2019/04/23/tfw2005-coverage-of-hasbro-2019-first-quarter-financial-results-387362), showing an increase in revenues globally, with Transformers being noted as one of the positive elements due to the Bumblebee Movie toyline, while the Movie was out at the beginning of the year.

[KELPIE]

It will be interesting to see if Hasbro go for the Star Wars license again.

It might be worth it just to keep the strong ties with Disney for Marvel and the Disney Princesses?

[griffin]

At their second quarter financial report meeting (https://news.tfw2005.com/2019/07/23/success-of-transformers-bumblebee-movie-and-its-future-for-hasbro-392730), Hasbro continues to praise the Bumblebee Movie for another quarter of improved sales attributed to it, and expect more revenue to come in from the second half of the year from the home-media sales (which they will get a cut from, being a major investor to the movie).
Most areas were up, on last year's second quarter, and they seem to be sitting on a very healthy warchest of US$1.2 Billion at the moment... it's almost like they are saving up for some big purchase(s) soon.

And in a follow-up interview (https://news.tfw2005.com/2019/07/24/hasbro-to-reduce-toy-production-in-china-and-move-to-india-and-vietnam-392824) on a financial program in America, it was noted that due to the trade war between the US and America, Hasbro will be looking to reduce their Chinese productions to under 50%, shifting more work to Vietnam and India by the end of next year.

[griffin]

Hasbro's CEO has commented again about the upcoming tariffs on Toys from China (https://news.tfw2005.com/2019/08/28/hasbro-planning-to-raise-toy-prices-and-modifying-for-a-cost-cut-395691) (from Trump's trade war), noting that they will be forced to pass on the added cost, but not until next year. Meanwhile, they will be looking to move more production out of China (noted in the previous post), which is exactly what Trump is hoping American business will do, so that it hurts China through loss of business.... and expect to have it down to 50% by the end of next year (from 90% a few years ago).
They are also looking into more cost-cutting, to offset the impending tariff costs, but he doesn't expect it to happen before the tariff price rises next year.
(don't forget that they are also looking to eliminate all plastic in their packaging during this time, which could help with the cost cutting)

[Sinnertwin]

They'll just save on expenses (cutting out plastic etc) but still charge the consumer the full amount. I doubt Hasbro will do their fans a solid and keep prices the same.

[griffin]

The latest quarterly report from Hasbro saw little movement overall (https://news.tfw2005.com/2019/10/22/tfw2005-coverage-of-hasbro-q3-2019-financial-call-398862), including Transformers which was still being propped up by residual income from the Bumblebee Movie still trickling back in to Hasbro. They are still in a good position though, despite trade war tensions and tariffs.

[griffin]

A recent acquisition by Hasbro is of the company "Entertainment One" (https://news.tfw2005.com/2019/12/30/til-all-are-one-hasbro-completes-acquisition-of-entertainment-one-403125), for a massive �2.9 Billion (that's about US$3.8 Billion or AU$5.7 Billion).

Yes, that's Billion with a "B".... and it was apparently an all cash purchase, so Hasbro has been building a fairly big warchest in recent years from their very healthy financial reports.

Hopefully it didn't clean out the warchest, as this is a big risk for them, as Hasbro are looking to do more of their TV entertainment in-house, instead of paying others to produce it for them.... and we saw how their venture into cable television failed (the HUB channel in America), hoping to take on Disney and Nickelodeon with a dedicated channel to Hasbro toylines. And the collateral damage was the axing of the popular Animated series and toyline, so that HUB could be launched with something new (TFPrime).

Hasbro's current value is somewhere between US$1.8 and US$5.3 Billion... so if they ended up purchasing a lemon, or the project doesn't generate a return, it could sink the parent company, as Hasbro relies on the stockmarket and it's fickle share traders to be valued as one of the biggest Toy Companies in the world (based on current share prices).


PAWTUCKET, R.I.�(BUSINESS WIRE)�Dec. 30, 2019� Hasbro, Inc. (NASDAQ: HAS) today announced that it has completed its previously announced acquisition of Entertainment One Ltd. (eOne), adding beloved global brands and expanding storytelling through immersive entertainment experiences.
�We are excited about what we can do together and see tremendous opportunity for shareholder value creation through this acquisition,� said Brian Goldner, Hasbro chairman and chief executive officer. �Our businesses are highly complementary with substantial synergies and a great cultural fit. The addition of eOne accelerates our blueprint strategy by expanding our brand portfolio with eOne�s beloved global preschool brands, adding proven TV and film expertise, and creating additional opportunities for long-term profitable growth. We are pleased to welcome the incredibly talented eOne team to our Company.�
Darren Throop, president and chief executive officer of eOne, will report to Goldner. In addition, eOne�s Olivier Dumont, president, family & brands, Steve Bertram, president, film & television, and Chris Taylor, global president, music, will also be joining Hasbro, reporting to Throop.
The all-cash transaction is valued at approximately �2.9 billion, based on the consideration of �5.60 per common share of eOne. Converted at a rate of 1.31 USD/GBP on December 30, 2019, the total cash consideration was approximately US$3.8 billion. Hasbro also expects to redeem eOne�s outstanding senior secured notes and to pay off the debt outstanding under eOne�s revolving credit facility, which together represent approximately �0.6 billion of eOne�s indebtedness.

[DaptoDog]

A recent acquisition by Hasbro is of the company "Entertainment One" (https://news.tfw2005.com/2019/12/30/til-all-are-one-hasbro-completes-acquisition-of-entertainment-one-403125), for a massive �2.9 Billion (that's about US$3.8 Billion or AU$5.7 Billion).

Yes, that's Billion with a "B".... and it was apparently an all cash purchase, so Hasbro has been building a fairly big warchest in recent years from their very healthy financial reports.

Hopefully it didn't clean out the warchest, as this is a big risk for them, as Hasbro are looking to do more of their TV entertainment in-house, instead of paying others to produce it for them.... and we saw how their venture into cable television failed (the HUB channel in America), hoping to take on Disney and Nickelodeon with a dedicated channel to Hasbro toylines. And the collateral damage was the axing of the popular Animated series and toyline, so that HUB could be launched with something new (TFPrime).

Hasbro's current value is somewhere between US$1.8 and US$5.3 Billion... so if they ended up purchasing a lemon, or the project doesn't generate a return, it could sink the parent company, as Hasbro relies on the stockmarket and it's fickle share traders to be valued as one of the biggest Toy Companies in the world (based on current share prices).

Thanks for posting this Griffin. I agree with your view that it is a big bet for the company. I would only clarify that Hasbro's "market value" based on the current share price is actually US$14.4b (https://www.google.com/search?q=hasbro+market+cap&rlz=1C1CHBF_en-GBAU853AU853&oq=hasbro+market+cap&aqs=chrome..69i57j0l2.4104j0j7&sourceid=chrome&ie=UTF-8). I imagine your referring to value as in the "book value" of the company based on the last reported equity of US$1.8b (https://investor.hasbro.com/news-releases/news-release-details/hasbro-reports-third-quarter-2019-financial-results)? Indeed they do rely on the stockmarket valuation to some extent and are trading at very high multiples of both book value and earnings.

It is a big bet for Hasbro because they are taking on a lot of debt in this transaction. They go from last reported net debt of around US$700m to around US$5b once the transaction closes. eOne doesn't generate a lot of profit which makes it even riskier for Hasbro if they can't monetise the assets.

It's definitely worth watching. If Hasbro has indeed bitten off more than it can chew it could get into trouble. I dare say though that Disney would be waiting in the wings to snap it up if it got cheap enough. So the Transformers brand would live on in some way, shape or form.

[Sinnertwin]

Remember when we used to joke about Disney owning everything?
As Count Dooku once said, this is just the beginning...

[High_Q]

Remember when we used to joke about Disney owning everything?

I just rewatched Howard the Duck (1986) recently, and noticed it was based on a Marvel IP produced by Lucasfilm. Who would've guessed that 30 years later, both belong to the House of Mouse.

[DELTAprime]

I had no idea that Hasbro owned Peppa Pig or PJ Mask till I read that press release. The more you know. Shrugs

[High_Q]

I had no idea that Hasbro owned Peppa Pig or PJ Mask till I read that press release. The more you know. Shrugs

Hasbro also owns gangster rap label Death Row Records. :cool:

[griffin]

Some news from Hasbro's recent purchase of Entertainment One (https://news.tfw2005.com/2020/02/17/entertainment-one-to-produce-tv-and-movie-content-based-on-transformers-405339), pretty much confirming the original intention of having them producing TV and film content based on Hasbro properties and licenses, quoting examples of Transformers, GIJoe, Power Rangers, Action Man and Dungeons & Dragons (and including an image of My Little Pony).

TV content isn't expected until 2021, but this should mean that the current cartoons (Cyberverse and Rescue Bots Academy) are likely to be wrapped up this year, because they won't be wanting to keep paying the current production company, now that they have just paid a fortune for their own production company... and a new series will mean a new toyline to help push it (when it is usually a cartoon to push a toyline).

[griffin]

Looks like eOne will be tasked with producing music for Hasbro shows and films as well (https://news.tfw2005.com/2020/03/14/eone-music-to-produce-music-for-hasbro-franchises-408069). Pretty much everything audio-visual it seems.
Considering how much they spent on the business, they need to squeeze everything out of it as they can.

[griffin]

Hasbro have released its financial report for the second quarter of 2020, (https://www.allspark.com/2020/07/hasbro-quarterly-financial-results-for-q2-2020/) detailing the affect the virus has had so far, and noting that despite the downturn they should still meet their annual product estimates.
It seems that while the toy sales might be down, they are benefiting from people being stuck at home, as gaming and digital revenues were up significantly.

[griffin]

The annual financial report for Hasbro for 2020 is out (https://news.tfw2005.com/2021/02/08/tfw2005-coverage-of-hasbro-2020-q4-and-full-year-financial-call-428547) and it shows the expected negative impact covid had last year... but surprisingly, they appear to have had a better 4th quarter than the previous year, so something significant turned around to rebound better than the negative impact of covid earlier in the year.
The international figures aren't good though, showing a big downturn in sales and profit for both the 4th quarter and the full year, with one reason being noted as being the exchange rate against the US$ (a weaker US dollar means they get less money in America from the "commission" Hasbro America makes from every non-American sale), and this could see an increase in our prices soon, so that the money being sent back to Hasbro in America goes back up into positive territory.

I think the total balance sheet is concerning though, after the purchase of eOne early last year, Hasbro's available cash has gone from being half a billion dollars in the black at the end of 2019, to 3.2 billion dollars in the red at the end of 2020. I guess eOne counts as an asset of similar value, so as long as that acquisition is productive, it is an asset that could be sold off if Hasbro's cash-flow and available cash suddenly gets worse.

This slide is an excellent one for those interested in knowing how much it actually costs to produce Hasbro toys (https://news.tfw2005.com/wp-content/uploads/sites/10/2021/02/Hasbro-Q4-Earnings-Presentation-FINAL-30.jpg) (in general), with the "cost" to them being just 31.5% of the revenue (the wholesale price to their retailers). A 69% profit margin is quite extraordinary, which is a lot more than I was expecting, as retailers margins are usually around 40%.
The breakdown of that 31.5% cost to Hasbro of their (mostly toy) products is 14.5% for the physical materials for the toys and packaging, and 17% for the costs behind the production and shipping.

[Trent]

The annual financial report for Hasbro for 2020 is out (https://news.tfw2005.com/2021/02/08/tfw2005-coverage-of-hasbro-2020-q4-and-full-year-financial-call-428547) and it shows the expected negative impact covid had last year... but surprisingly, they appear to have had a better 4th quarter than the previous year, so something significant turned around to rebound better than the negative impact of covid earlier in the year.
The international figures aren't good though, showing a big downturn in sales and profit for both the 4th quarter and the full year, with one reason being noted as being the exchange rate against the US$ (a weaker US dollar means they get less money in America from the "commission" Hasbro America makes from every non-American sale), and this could see an increase in our prices soon, so that the money being sent back to Hasbro in America goes back up into positive territory.

I think the total balance sheet is concerning though, after the purchase of eOne early last year, Hasbro's available cash has gone from being half a billion dollars in the black at the end of 2019, to 3.2 billion dollars in the red at the end of 2020. I guess eOne counts as an asset of similar value, so as long as that acquisition is productive, it is an asset that could be sold off if Hasbro's cash-flow and available cash suddenly gets worse.

This slide is an excellent one for those interested in knowing how much it actually costs to produce Hasbro toys (https://news.tfw2005.com/wp-content/uploads/sites/10/2021/02/Hasbro-Q4-Earnings-Presentation-FINAL-30.jpg) (in general), with the "cost" to them being just 31.5% of the revenue (the wholesale price to their retailers). A 69% profit margin is quite extraordinary, which is a lot more than I was expecting, as retailers margins are usually around 40%.
The breakdown of that 31.5% cost to Hasbro of their (mostly toy) products is 14.5% for the physical materials for the toys and packaging, and 17% for the costs behind the production and shipping.

That slide doesn�t show corporate overheads (marketing, HR, shareholder return, etc). It purely relates to the toys production. Thinking about it, it probably does edge closer to 50% gross margin once everything is taken into account which is more in line with what I�d expect.

[JJJ]

The international figures aren't good though, showing a big downturn in sales and profit for both the 4th quarter and the full year, with one reason being noted as being the exchange rate against the US$ (a weaker US dollar means they get less money in America from the "commission" Hasbro America makes from every non-American sale), and this could see an increase in our prices soon, so that the money being sent back to Hasbro in America goes back up into positive territory.


Hang on. How does that work? With a weaker USD, or at least a stronger AUD, every dollar we spend means more money to them. For example, the price of a WFC deluxe has remained constant for the past 18 months, but in that time the AUD has risen in value by about 15%. Which should mean that the value of revenues from us, if sales remain static, has risen by ~15%. Even if sales have dropped, the increasing value of our currency should help pad that out.

[griffin]

That slide doesn�t show corporate overheads (marketing, HR, shareholder return, etc). It purely relates to the toys production. Thinking about it, it probably does edge closer to 50% gross margin once everything is taken into account which is more in line with what I�d expect.

The "cost of sales" is just what it cost to acquire the stock (either from someone else, or in-house). Those other elements is what the difference between the cost of "acquiring" the stock and selling it to the retailers covers, just like it does in the 40% that retailers mark up their stock between the acquiring of their stock to selling it to customers. Which still goes to my point of surprise, that the "margin" to cover all of those other elements by Retailers and by Distributors like Hasbro, is significantly different, despite having the mostly the same non-stock cost elements.

The only question I would have is if the "labor" cost includes the R&D of the product, or just the manufacturing of the product. My guess it includes both, as we know how little people are paid in these factories, which is why big corporations like using them instead of having domestic production with domestic employment.

[griffin]

One of the features at each year's New York Toyfair is their annual Investor presentation, and it will sometimes reveal some new Transformers details (or leak a new toy in one of their Brand slides), but with the cancellation of Toyfair this year, we were hoping something interesting would be included to make up for the absence of the live Toyfair presentations.
Apparently it doesn't reveal anything new for toys (https://news.tfw2005.com/2021/02/25/hasbro-investor-day-2021-live-stream-429269), and usually tfw will include screenshot slides of the presentation, but they've just embedded the video (which might not be accessible for too long).

[griffin]

Some info revealed at an annual media convention in America recently (https://news.tfw2005.com/2021/05/24/tfw2005-coverage-of-49th-j-p-morgan-conference-434088), relating to the upcoming movies and WOTC producing video games (including one for Transformers)...


Hasbro and eOne participated at J.P. Morgan 49th Annual Global Technology, Media, and Communications Conference to give a brief highlight on several projects both companies are working on.
Regarding upcoming Transformers entertainment content, eOne CEO Darren Throop stated the following:

�Another one that�s going into production very soon is Transformer 7. The script is in great shape, casting, that�s all in pre-production. Another one that we are working on is a Transformers animated [movie].�
He did not forget to mention Power Rangers as well:


�Power Rangers is being worked on now with a creative steward and a big streaming partner. We haven�t brought that to an announcement stage yet.�

Additionally, Hasbro mentioned that the company is working on their own video games based on their toy properties. During Hasbro�s Investor Day, the toy giant mentioned that Wizards of the Coast is working on video games such as Transformers and G.I. Joe. Today, Hasbro�s Chief Financial Officer Deb Thomas elaborated more on the matter. She emphasized that we won�t see the games at least for another 2 or 3 years.


�We have been investing over the last 5 years and we�ve invested over $200 million in developing games and as you think about going forward, we�ve not taken our foot off the gas [pedal] in this pandemic period and developing games that you�re not going to see until 2 to 3 years out. We�ll continue to develop those.�
�We are really excited about the investments that we�re making around Dungeons & Dragons, Magic: The Gathering, and other games that are based on brands in the Hasbro portfolio by this really terrific team at Wizards of the Coast.�
Mr. Goldner did not forget to mention that Transformers 7 will arrive in summer 2022 and the animated Transformers movie will hit theaters in the years that follow. Therefore, it is likely that we won�t see the Josh Cooley-directed Transformers animated feature film until after 2022.

[griffin]

A followup of what Wizards of the Coast will be taking on in the future (https://news.tfw2005.com/2021/09/25/hasbro-opens-a-new-division-to-develop-aaa-game-titles-441680), in terms of more digital content...


Hasbro�s Wizards Of The Coast division (previously a subsidiary) has opened up a new digital games division called New Raleigh-Durham Studio to develop AAA titles (for PC and Consoles) based on Hasbro properties.

This new division is lead by game industry veterans from big companies such as WB Games (Hitman series, Batman: Arkham series, etc.).

As first announced during Hasbro�s 2021 Investor Event, this new studio is currently aiming to produce games for Transformers, G.I. Joe, Micronauts, and Ouija.

As the first project, this North Carolina-based company will tackle G.I. Joe as a 3rd Person Action-Adventure game. The studio is now hiring for various positions such as Art Director, Lead Animator, Lead Game Designer, and Technical Director.

During a recent interview with Stifel Investment Bank, Wizards Of The Coast CEO Chris Cocks stated that Hasbro is aspiring to have a fully-fledged in-house digital games division to cater to a demanding video game market.

[Lint]

I like this development. Much better than the recent, let's slap a transformers badge on this digital content for $$$ we've been getting lately.

[DELTAprime]

I personally wish more companies would take the Games Workshop approach to games. If you are a Warhammer fan you are spoiled for choice in games because they will give anyone with a decent idea a shot at making a game. Sure some of them fail to be good games, but there's always another Warhammer game coming right around the corner.

I would love to be spoilt for choice with Transformers games.

[griffin]

For anyone interested in the 3rd quarter earnings for 2021 for Hasbro (https://news.tfw2005.com/2021/10/26/tfw2005-coverage-of-hasbro-2021-q3-financial-call-443837). They seem to be doing well considering the current climate, and are working to deal with expected global supply delays.
They haven't yet appointed a new CEO to replace Brian Goldner.

[griffin]

Brian Goldner's replacement has now been announced (https://news.tfw2005.com/2022/01/05/chris-cocks-named-new-hasbro-ceo-447766), and it is a name that has popped up in this topic recently, as he was the CEO of the WOTC division of Hasbro - Chris Cocks.
He originally comes from a long stint at Microsoft, and we saw above that he was looking at expanding digital entertainment at WOTC, so now that he's in charge of all of Hasbro, we could see a big focus shift to digital and virtual play, over physical toy play.

They also announce other new names to the upper management re-shuffle.


PAWTUCKET, R.I.�(BUSINESS WIRE)�Jan. 5, 2022� Hasbro, Inc. (NASDAQ: HAS) today announced that its Board of Directors has appointed Chris Cocks as Chief Executive Officer and member of the Board of Directors, effective February 25, 2022. Mr. Cocks currently serves as President and Chief Operating Officer of Hasbro�s Wizards of the Coast and Digital Gaming division, a global leader in tabletop and digital gaming. He will succeed Interim CEO, Rich Stoddart, who was appointed following the October passing of Hasbro�s longtime CEO Brian Goldner. Mr. Stoddart, who has served as a Hasbro independent director since 2014, will become Chair of the Board, effective February 25, 2022.
Tracy Leinbach, current Chair of the Board, said: �Chris�s appointment marks the culmination of an extensive and thoughtful candidate review and selection process led by the Board. In Chris, we have chosen a leader uniquely positioned to execute and evolve Hasbro�s Brand Blueprint strategy while continuing to generate growth and deliver strong shareholder returns. Chris�s extensive omni-channel experience and proven track record make him the ideal leader for Hasbro as it continues to become the world�s leading play and entertainment company. On behalf of the Board, we thank Rich for serving as Interim CEO during a difficult time for the Hasbro family and are delighted he will serve as Chair of our Board.�
Mr. Stoddart said: �Having known Chris for years and working more closely with him these last several months, I have no doubt that he will be an extraordinary leader for the next phase of Hasbro�s journey. A storyteller and gamer at heart, Chris innately understands how to create and nurture brands to drive fan and consumer connection across channels. He is a highly strategic leader, with the vision, skills and experience to unlock our Brand Blueprint for supercharged growth.�
Mr. Cocks said: �Hasbro has amazing brands, gifted storytellers and unique entertainment assets, and I am humbled to step into the position of CEO at this important time and to build on the strong foundation Brian created. Our consumer products, gaming and entertainment teams are the best and most creative in the business and have shown such incredible resilience. I look forward to working with our highly-experienced senior management team as we continue to reimagine play and entertainment and deliver experiences to families and fans, of all ages, around the world.�
Mr. Cocks has served as President and COO of Wizards of the Coast since 2016, when he joined Hasbro from Microsoft. Wizards of the Coast, a subsidiary of Hasbro, offers games and entertainment under world-renowned brands such as MAGIC: THE GATHERING, DUNGEONS & DRAGONS and DUEL MASTERS. Under Mr. Cocks, Wizards of the Coast has focused on cooperative game play, expanding new digital initiatives and creating a robust workforce of back-end developers, digital designers, 3D artists and producers. Under Mr. Cocks�s leadership, revenue at Wizards of the Coast has more than doubled, surpassing $1 billion in 2021.
During his 14 years at Microsoft, Mr. Cocks led a global sales and technical engagement team as Vice President, OEM Technical Sales and served in product management and marketing leadership positions at MSN and Xbox Games, where he worked on hit franchises like HALO and FABLE.
The Company expects to name a new president for Wizards of the Coast in the coming weeks.
Eric Nyman to Become Hasbro�s President and Chief Operating Officer
Hasbro also announced the appointment of longtime leader Eric Nyman as President and Chief Operating Officer, effective February 25, 2022. In this new role, Mr. Nyman will oversee global business, operational and foundational platform investments; continue to lead Hasbro�s overall consumer licensing strategy and strategic partnerships; and oversee Hasbro�s global supply chain, directing the strategy for a next-generation consumer direct distribution platform.
Mr. Stoddart continued: �Eric has been a valued member of the Hasbro team for more than 18 years, inspiring our people, and driving consumer-focused innovation across our iconic brand portfolio. The Company will benefit from his vast knowledge, creativity and leadership as he takes on this new, expanded role on our senior management team.�
Mr. Nyman, who joined Hasbro in 2003, currently serves as Chief Consumer Officer and Chief Operating Officer of Hasbro Consumer Products. In this role, he leads the Hasbro Consumer Products business unit, including oversight for operations and partner relationships, Hasbro�s licensed consumer products business and Hasbro Pulse, the Company�s direct-to-consumer platform. He previously served in a number of senior roles, including President of Hasbro North America and General Manager and Senior Vice President of Marketing.

[griffin]

Usually these updates are on TFW, but Seibertron has the latest financial reporting from Hasbro (https://www.seibertron.com/transformers/news/hasbro-reports-strong-revenue-operating-profit-and-earnings-growth-for-the-fullyear-2021/46665/), and it looks like 2021 was a bumper year for Hasbro, increasing revenue (over us$6 Billion) and profits (just on us$1 Billion) despite the pandemic, that impacted sales, production and supply chains for most companies (and we saw a lot of Transformers products delayed here in Australia in 2021).

The financial report says that Hasbro used over a billion US dollars of profits to pay off some of their debt (they bought Entertainment One for 7 Billion, which was probably mostly borrowed, so they might have a lot more debt to pay off just yet).

[griffin]

The 2021 annual financial report from Hasbro has been released (https://investor.hasbro.com/static-files/78098a21-d496-4e87-892f-152b82ee1fe7), and it also talks a little about their next year (which we are already almost halfway through), including the Transformers Experience "summer" (mid) 2022 in America still being listed, which should mean that it hasn't been delayed.

It also mentions that despite other Hasbro Brands doing much better than Transformers, the Transformers Brand still did well in 2021, noting that the WFC cartoon helped with sales.

The total revenue for 2021 was us$6.42 Billion... with us$2.1 Billion of that from Gaming alone (which includes Magic, their biggest growth Brand for the year).

Something that will apply to Transformers, is in their environmental targets...


On track to eliminate plastic in new Hasbro product packaging by end of 2022.

Set goal to make POTATO HEAD brand with plant-based or renewable materials by end of 2024. Transitioning all other existing toys and games to recycled or renewable materials by 2033

That means that within 11 years, our Transformers toys will be made with renewable or plant-based materials... which is good for the environment to have them break down faster (if they end up in the bin and then in land-fill), but that will also mean the toys that don't get thrown away will also break down and disintegrate within a shorter period of time... probably like those biodegradable plastic bags that you find in the cupboard a couple years later and they shatter into thousands of pieces like honeycomb.

[JJJ]

That's a bit pessimistic. There are plastics made from non-fossil sources that are just as durable as the ones we're used to - the important part isn't that they come from a particular source, but rather that they are the right polymers. I'm not entirely up-to-date on progress with these plastics, but the last time I looked they hadn't reached the nylon and ABS realm, and were more expensive than traditionally produced plastics, but development was continuing apace. They started with biodegradable bags and the like because that's where the industrial interest and demand was; this sort of thing will redirect research and development.

On the other hand - good thing we've now got G1 (just about) sorted :)

[DELTAprime]

I know this is an area of science I don't understand fully, but I'm very sceptical of companies saying they can keep producing the same product, but do it green.

Formula 1's fuel suppliers say they can take carbon from the atmosphere to make fuel and it will be "carbon natural".

[JJJ]

Oh, there's no way to make it carbon neutral in and of itself, that's just corporate / marketing bullshit. Replacing oil with biofuel doesn't get away from using carbon (and you've got all the industry involved in agriculture to go with it, plus a new set of refining processes), because carbon is at the core of polymers. What it does do is stop moving carbon from ancient sequestration back into the current atmosphere, which is something of an improvement, if already far too late.

[Bidoofdude]

I know it�s relevant to their brand to reduce use of plastic packaging, but a lot of this stuff kind of reeks of marketing fluff and trying to gain public favour through ultimately pretty meaningless platitudes. Plastic packaging on collectable toys is ultimately a drop in the bucket compared to the capital and power that Hasbro has. It can come across in a similar vein to a lot of big companies now pushing for individual responsibility from customers (recycling in the home, saving power, saving water) that lessens the responsibility for large faceless companies. Those things are great to do, but the time to do them was decades ago. The time period we live in demands more.

Though perhaps out of their wheelhouse as a toy company, Hasbro would make a much more meaningful impact by investing directly into large scale sustainability efforts and helping push back against the majority of carbon production, that is made by large energy, transport and food production companies resisting systemic changes. Given their recent licensing with Funko and its blatantly unsustainable NFT projects, I would doubt the efforts would go much farther than this surface level marketing gloss, which is disappointing.

[griffin]

Some big changes could be coming our way from Hasbro, after the recent changes at the top (after the passing of Brian Goldner).
One thing is that they are re-evaluating their future entertainment plans and their ongoing partnership with Paramount... which has been a big part of Hasbro's growth in the last 15 years, thanks mostly to Brian's vision for Hasbro's future as an entertainment company, not just a toy company.

This is from an article in Bloomberg (https://www.bloomberg.com/news/newsletters/2022-08-21/hasbro-considers-sale-or-restructuring-of-entertainment-assets), which I haven't read... so am just going on the highlighted bits from here (https://news.tfw2005.com/2022/08/22/hasbro-to-reevaluate-its-entertainment-plans-464080).


Thanks to an article by Bloomberg, we now know that Hasbro is in the process of reevaluating its entertainment plans.
The article highlights multiple factors including the impact of the COVID-19 Pandemic wreaking havoc on Hollywood box-office, and the passing of Hasbro’s former CEO, Brian Goldner, as the root causes of the reevaluation.

Mr. Goldner was also a part of the director board of Paramount Global (formerly known as Viacom CBS). His passing may have severed the tight connection between Paramount Pictures and Hasbro. At the moment, Paramount produces and distributes entertainment based on Hasbro properties such as Transformers, G.I. Joe, D&D, etc.

According to the article, Hasbro is looking at two options:


[Hasbro] can take the existing staff [at eOne] and redirect it to make branded entertainment (think “Peppa Pig” movies), and shut down work on projects like “Yellowjackets” and “Designated Survivor.”
[Hasbro] can sell everything it doesn’t want.

With the current 5-Year Agreement with Paramount Pictures coming to a closure at the end of 2022, Hasbro will also have to reevaluate the partnership on whether to extend or to let go.
CEO of eOne (a subsidiary of Hasbro), Mr. Darren Throop, will be stepping down at the end of this year as well.



Meanwhile, there could also be a shake-up of their toy distribution strategy (https://news.tfw2005.com/2022/08/24/hasbro-to-change-their-toy-distribution-strategy-464191), as they are looking to change the way they release movie tie-in toylines (not just Transformers), from a huge flood of stock all at once around the release of the movie, to a more staggered release over a longer period of time.
This probably only applies to Movie and Cartoon toylines, not the more collector-targeted toylines.



‘Today, unpredictability reigns, with chaotic supply chains affecting timing, and streaming content rolling out in six-packs rather than full seasons. Meanwhile, disappearing theatrical windows have drastically changed movie launches and the Consumer Products programs that accompany them.
But in business, challenges often bring opportunities. That’s the lens through which Marianne James, Hasbro’s VP of EMEA and Asia, sees the current landscape.
“Tried and tested models still have their place, especially when you’ve got a Consumer Products program that leans on core pillars like toys and games,” says James. “What is interesting now is that we can test and learn. Instead of dropping products based on seasons, we’re now looking to where a rollout could be more relevant to a culture in one of our specific markets.”
One way Hasbro has shifted its strategy to accommodate the “highly unpredictable” nature of the market is to space out product releases in smaller waves instead of releasing the entire range in one large launch, she says. This provides the ability to establish contingencies if logistical issues occur in the company’s supply line.
“If the content is pushed back and we experience a delay at retail, or there are problems getting product on the water, it’s better to be flexible and have a softer, more phased-out launch instead of using a big, all-encompassing 360 strategy,” says James.
This is especially important for Hasbro’s “vault” brands such as Transformers, Peppa Pig, and My Little Pony, which exists in highly competitive toy categories, most notably preschool. To have a major rollout fall flat due to timing problems is not an option, so the company is expanding its arsenal of marketing and engagement tools, she says.’

[DELTAprime]

Some bad news today that impacts Hasbro as a whole and its financial state.

Hasbro is laying off around 1100 Employees. I can't find anyone saying people on the Transformers team have been laid off, but that doesn't necessarily mean we won't see Transformers staff leave.

https://gamerant.com/hasbro-layoffs-over-1000-people/

[High_Q]

Some bad news today that impacts Hasbro as a whole and its financial state.

Hasbro is laying off around 1100 Employees.
https://gamerant.com/hasbro-layoffs-over-1000-people/

That's about one sixth of their global workforce. That's a lot of people laid off.
:(

[DELTAprime]

According to a recent report, Chinese company Tencent is trying to buy D&D from Hasbro.

https://www.videogameschronicle.com/news/tencent-is-reportedly-seeking-to-acquire-dungeons-dragons-from-hasbro/