Sega Sammy Holdings Inc. · TSE:6460

Sega Sammy — Q3 FY2020 Earnings Presentation

33 slides from Sega Sammy's earnings presentation, Feb 5, 2020

  1. Slide 1: FY Ending March 2020 3Q Results Presentation

    FY Ending March 2020 3Q Results Presentation February 5, 2020 [Disclaimer] The contents of this material and comments made during the questions and answers etc. of this briefing session are the judgements and projections of the Company’s managements based on currently available information. These co

  2. Slide 2: Revision to full-year operating results forecast announced on February 5

    1. With regard to revision to the full-year operating results forecast announced on February 5 -2-

  3. Slide 3: Revisions to full-year forecast (1) Overall

    Revisions to full-year operating results forecast announced on Feb 5 (1) Overall FY ending March 2020 Full-Year Forecast: (Unit: billion yen) Breakdown per Segments 2019/3 2020/3 Revised Full Year Full Year Increase / Full Year Results Forecast (announced Forecasts Decrease  While Pachislot and Pac

  4. Slide 4: Revisions to forecast (2) Pachislot and Pachinko Machines Business

    Revisions to full-year operating results forecast announced on Feb 5 (2) Pachislot and Pachinko Machines Business (JPY Billion) 2019/3 2020/3 Revised Full Year Full Year Main reason for the revision Full Year Forecast Increase / Forecasts Results (announced Decrease on Apr 26) (announced  Launch of

  5. Slide 5: Revisions to forecast (3) Entertainment Contents Business

    Revisions to full-year operating results forecast announced on Feb 5 (3) Entertainment Contents Business (JPY Billion) 2019/3 2020/3 Revised Full Year Full Year Full Year Forecast Increase / Results (announced Forecasts Decrease Main reason for the revision (announced on Apr 26) on Feb 5)  Unit sal

  6. Slide 6: Organizational restructuring announced on Dec 24

    Organizational restructuring announced on Dec 24 Entertainment Contents Business Merges SEGA Games Co., Ltd. and SEGA Interactive Co., Ltd. with the aim to enhance the development capabilities through utilization of resources. (Current status) (Scheduled for April 1, 2020) SEGA SAMMY HOLDINGS INC. S

  7. Slide 7: FY Ending March 2020 3Q Results / Full-Year Forecast

    2. FY Ending March 2020 3Q Results / Full-Year Forecast -7-

  8. Slide 8: Results Highlights

    Results Highlights (Unit: billion yen) 2019/3 2020/3 Revised Full Year Results Full Year Results Forecast Full Year Forecasts 2020/3 3Q Results Through 3Q Results Through 3Q (announced (announced on Apr 26) on Feb 5)  Both sales and profit increased YoY. Sales 250.3 331.6 280.8 390.0 367.0  Unit s

  9. Slide 9: Breakdown of Income (2020/3 3Q results)

    Breakdown of Income (2020/3 3Q results) (Unit: billion yen) Breakdown of non-operating income / losses (Unit: billion yen) Non-operating income 1.8 Interest income 0.1 Dividends income 0.3 Gain on investments in partnership 0.4 Non-operating expenses 4.0 Foreign exchange losses 0.3 Equity in losses

  10. Slide 10: Consolidated Costs and Expenses

    Consolidated Costs and Expenses (Unit: billion yen) 2019/3 2020/3 Revised Full Year Full Year Results Full Year Results Forecast Forecasts Through 3Q Results Through 3Q (announced (announced on Apr 26) 2020/3 3Q results / Main Factors on Feb 5) R&D Expense / Increased with launch of new titles in Co

  11. Slide 11: Consolidated Balance Sheet Summary

    Consolidated Balance Sheet Summary (Unit: billion yen) As of end of As of end of Change March 2019 December 2019 Main change factors Changes Total Current Assets 260.4 264.0 +3.6 Cash and Deposits 137.4 102.0 -35.4 Current Assets +3.6 Accounts Receivable 39.2 57.8 +18.6 While cash and deposits decre

  12. Slide 12: 3Q results / Full-Year Forecast per Segments

    3. 3Q results / Full-Year Forecast per Segments - 12 -

  13. Slide 13: Pachislot and Pachinko Machines Business

    Pachislot and Pachinko Sales Operating income (Unit: billion yen) Machines Business Operating income margin 2020/3 3Q results 2019/3 2020/3  Profitability improved YoY due to increased pachislot unit sales.  Pachislot : "Pachislot Hokuto No Ken Tenshou" "Pachislot Psalms of Planets Eureka Seven 3

  14. Slide 14: Pachislot and Pachinko Machines Business: Major titles

    Pachislot and Pachinko Machines Business Major titles in 3Q Major titles in and after 4Q Pachislot Pachinko Pachislot Pachinko "Pachislot Hokuto No Ken "Pachislot 〈Monogatari〉 "P GAOGAOKING 3" "P SOUTEN-NO-KEN Souryu" Tenshou" Series Secondseason" ©Buronson & Tetsuo Hara/NSP 1983, ©Sammy ©Nisioisin/

  15. Slide 15: Transition of revision of rules and easing of voluntary regulation

    Transition of revision of rules (February 2018) and Pachislot and Pachinko easing of voluntary regulation, etc. Machines Business Revision of rules New Regulation Machine (1) New Regulation Machine (2) (Regulation for 6.0 model machine) (Regulation for 6.1 model machine) Pachislot Gameplay in shorte

  16. Slide 16: Entertainment Contents Business

    Sales Entertainment Contents Business Operating income (Unit: billion yen) Operating income margin 2019/3 2020/3 2020/3 3Q results  Digital Games area performed solidly.  The expenses increased in Packaged Games area due to the launch of new titles. Forecast  Several new titles are planned to lau

  17. Slide 17: Digital Games

    Sales Digital Games Operating income (Unit: billion yen) Operating income margin 2019/3 2020/3 2020/3 3Q results  Significant profit growth YoY.  Steady performance of the titles in operation. • “SEGA Pocket Club Manager” • “Fist of the North Star LEGENDS ReVIVE”  Expenses decreased in the curren

  18. Slide 18: Packaged Games

    Sales Packaged Games Operating income (Unit: billion yen) Operating income margin 2020/3 3Q results 2019/3 2020/3  Launched several new titles but sales went below expectation.  “PERSONA 5 ROYAL”  "Mario & Sonic at the Olympic Games Tokyo 2020™"  “New Sakura Wars”  Repeat sales of existing titl

  19. Slide 19: Packaged Games: Major titles

    Packaged Games Major 3Q Titles Major titles after 4Q “PERSONA 5 ROYAL” “New Sakura Wars” “Ryu ga Gotoku 7" ©ATLUS ©SEGA All rights reserved. ©SEGA ©SEGA "Mario & Sonic AT Tokyo 2020 Olympic™" TM IOC/TOKYO2020/USOC 36USC220506. © 2019 IOC. All Rights Reserved. © NINTENDO. ©SEGA. “Football Manager 202

  20. Slide 20: Amusement Machine Sales

    Sales Amusement Machine Sales Operating income (Unit: billion yen) Operating income margin 2019/3 2020/3 2020/3 3Q results  Launched “StarHorse4”  While prize category performed solidly, profit decreased YoY.  YoY decline due to negative repercussions of the sales of high- margin CVT Kit in the p

  21. Slide 21: Amusement Center Operations

    Sales Amusement Center Operations Operating income (Unit: billion yen) Operating income margin 2019/3 2020/3 2020/3 3Q results  Prize remained solid, but profits declined YoY.  Common fixed expenses such as depreciation of machines increased.  Impact of the consumption tax hike.  Sales of existi

  22. Slide 22: Animation / Toys

    Sales Animation / Toys Operating income (Unit: billion yen) Operating income margin 2019/3 2020/3 2020/3 3Q results  Both sales and profits increased YoY.  Animation: Recorded revenue from video distribution, etc.  Toys: Sales of new products such as “Fun to change mouse covers! Sumikkogurashi Pe

  23. Slide 23: Other Topics

    Other Topics Movie: “Sonic The Hedgehog” Published nationwide on Feb. 14 Published in Japan on Mar. 27 Scheduled to be published in Europe, South America, Asia, and other parts of the world in stages (Feb-Mar) ©2019 PARAMOUNT PICTURES AND SEGA OF AMERICA, INC. ALL RIGHTS RESERVED. - 23 -

  24. Slide 24: Resort Business

    Resort Business Sales (Unit: billion yen) Operating income 2019/3 2020/3 FY3/20 3Q results  Profit of PHOENIX RESORT improved but expenses for domestic Integrated Resort (IR) increased, leading to wider losses. Forecast  Continue to improve profitability at existing facilities.  Expenses increase

  25. Slide 25: PHOENIX RESORT

    PHOENIX RESORT Sales (Unit: billion yen) Operating income Operating income margin 2019/3 2020/3 FY3/20 3Q results  Increase in number of users due to the 25th anniversary commemorative project and implementation of measures for the Kyushu area.  One-night event to commemorate the 25th anniversary

  26. Slide 26: PHOENIX RESORT events and plans

    PHOENIX RESORT “The DELICIOUS FESTIVAL” 25th anniversary special plan, “Five Meals for One Night in Winter” - 26 -

  27. Slide 27: Initiatives to promote integrated resort (IR) business

    Resort Business Initiatives to promote integrated resort (IR) business  Concludes Production Agreement with KYOTO KITCHO - Developing plans for the authentic, luxury Japanese restaurant and inn at IR facilities –  Strategic business alliance with Katana Inc. - Jointly working to design and formula

  28. Slide 28: IR initiatives: Production Agreement with KYOTO KITCHO

    Resort Business Initiatives to promote integrated resort (IR) business  Concludes Production Agreement with KYOTO KITCHO (from 2018) ~ Developing plans for the authentic, luxury Japanese restaurant and inn at IR facilities Design and produce restaurants and inns where people can enjoy classic Japan

  29. Slide 29: IR initiatives: Partnership with Katana Inc.

    Resort Business Initiatives to promote integrated resort (IR) business  Partners with Katana Inc., an Elite Marketing Company Led by Tsuyoshi Morioka, One of Japan’s Top Marketers (from 2017) SEGA SAMMY and Katana have been engaged as partners in the design and formulation of a Japanese- style IR b

  30. Slide 30: IR initiatives: Alliance with Foster+Partners

    Resort Business Initiatives to promote integrated resort (IR) business  Strategic Business Alliance with Foster+Partners (from 2017) SEGA SAMMY with abundant Foster+Partners with extensive knowledge and knowhow in the experience in having carried out entertainment industry innovative feats in the a

  31. Slide 31: Exhibited at 1st JAPAN IR EXPO in Yokohama

    Resort Business Initiatives to promote integrated resort (IR) business Exhibited at 1st JAPAN IR EXPO in Yokohama (held on Jan 29 and 30, 2020) "Sustainably Successful Integrated Resort" trying to realize in Yokohama, picturing with Foster+Partners. - 31 -

  32. Slide 32: PARADISE SEGASAMMY (Equity method affiliate)

    PARADISE SEGASAMMY (Equity method affiliate) Transition of Drop* amounts at Paradise City （KRW Billion） (KRW million) FY2019 3Q FY2020 3Q Results Results Sales 213.9 331.5 Casino 176.8 268.7 Hotel 36.8 49.6 Other 0.4 13.2 Cost of sales 188.2 279.5 Casino 113.5 145.5 Hotel 69.6 87.3 Other 5.1 46.6 Gr

  33. Slide 33: Cautionary Statement regarding Nevada Gaming Statutes

    https://www.segasammy.co.jp/english/ Cautionary Statement for Investors and Shareholders with Respect to Nevada Gaming Statutes and Please visit below websites for products and service information. Regulations https://www.segasammy.co.jp/english/pr/corp/group/list.html SEGA SAMMY HOLDINGS INC. (“the

Sega Sammy Holdings — Q3 FY2020 Earnings Presentation on 6ix