Sega Sammy Holdings Inc. · TSE:6460
Sega Sammy — FY2023/3 Earnings Presentation
75 slides from Sega Sammy's earnings presentation, Apr 28, 2023
Slide 1: Fiscal Year Ended March 2023 Results Presentation
Fiscal Year Ended March 2023 Results Presentation 2023/4/28 Market forecasts, operating results forecast, and other information contained in this material are based on judgements and projections of the Company‘s managements based on currently available information. Therefore, please understand that
Slide 2: FY2023/3 Results / FY2024/3 Forecast
01 FY2023/3 Results / FY2024/3 Forecast -2-
Slide 3: Results Highlights
Results Highlights (Billion yen) FY2022/3 FY2023/3 FY2024/3 Full Year Full Year Full Year Results Results Forecast FY2023/3 Results Sales 320.9 389.6 433.0 Entertainment Contents 235.9 282.8 305.0 Achieved significant increases in sales and profits YoY Pachislot and Pachinko Machines 75.8 94.2 115
Slide 4: Breakdown of Income (FY2023/3 Results)
Breakdown of Income (FY2023/3 Results) (Unit: billion yen) Breakdown of non-operating income/losses and Operating income 46.7 extraordinary income/losses Non-operating income 4.9 Non-operating income 4.9 Gain on investments in partnership 1.9 Foreign exchange gains 1.3 Non-operating expenses 2.2 Div
Slide 5: Costs and Expenses, etc.
Costs and Expenses, etc. ■Entertainment Contents (Billion yen) FY2021/3 FY2022/3 FY2023/3 FY2024/3 Full Year Full Year Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Results Forecast R&D / Content production expenses 9.2 9.8 11.8 14.7 9.9 13.5 12.7 18.3 11.9 14.8 16.4 22.9 66.0 68.9 Advertising expenses 1.7 2.
Slide 6: Costs and Expenses, etc.
Costs and Expenses, etc. ■Resort (Billion yen) FY2021/3 FY2022/3 FY2023/3 FY2024/3 Full Year Full Year Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Results Forecast R&D / Content production expenses 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.1 0.0 0.0 0.0 0.1 0.1 0.0 Advertising expenses 0.0 0.1 0.1 0.0 0.0 0.2 0.1 0.0 0
Slide 7: Consolidated Balance Sheet Summary
Consolidated Balance Sheet Summary (Billion yen) 【Assets】 【Liabilities and Net Assets】 As of end of As of end of Increase As of end of As of end of Increase Account Account March 2022 March 2023 /Decrease March 2022 March 2023 /Decrease Cash and Deposits 152.4 179.5 +27.1 Accounts Payable 24.4 30.5
Slide 8: Consolidated Cash Flows
Consolidated Cash Flows (Unit: billion yen) Cash and cash equivalents Cash Flows from Operating Activities End2019/3期末 of 152.4 Income before income taxes +47.0 FY2022/3 Depreciation and amortization +10.6 C/F Increase in notes and accounts receivable from -13.4 -trade Operating Increase in inventor
Slide 9: Per Segments Results / Forecast
02 Per Segments Results / Forecast -9-
Slide 10: Entertainment Contents Business
Entertainment Contents Business (Billion yen) FY2022/3 FY2023/3 FY2024/3 Full Year Full Year Full Year FY2023/3 Results Results Results Forecast Sales 235.9 282.8 305.0 Both sales and profits increased YoY Consumer 158.3 187.9 205.0 • Some new titles in Full game and F2P* performed strongly Amusem
Slide 11: Entertainment Contents Business: Per Subsegments
Entertainment Contents Business: Per Subsegments FY2023/3 Results FY2024/3 Forecast • Sales of new titles increase • Strong performance of new titles such as “Sonic Full • Sales of repeat titles contribute to earnings due to new titles Frontiers” and "Persona 5 Royal" (Remaster) Game • Repeat sales
Slide 12: Consumer Area / Full Game: Sales Trend
Consumer Area / Full Game: Sales Trend (Unit: billion yen) -12-
Slide 13: Consumer Area / F2P: Sales Trend
Consumer Area / F2P: Sales Trend "Project SEKAI COLORFUL STAGE! feat. Hatsune Miku" (Unit: billion yen) "PHANTASY STAR ONLINE 2 NEW GENESIS" “PHANTASY STAR ONLINE 2” (2012/7~) “SEGA NET MAHJONG MJ“ (2013/7~) [Top 3 titles in sales from Jan. to Mar. 2023] (No. 1) (No. 2) (No. 3) "Project SEKAI COLORF
Slide 14: (Reference) Consumer Area: Sales Trend
(Reference) Consumer Area: Sales Trend (Billion yen) FY2022/3 FY2023/3 FY2024/3 Through Through Through Through Through Through Full Year Q1 Q1 Q2 Q3 Q4 Q2 Q3 Q4 Forecast Sales 29.5 71.2 119.6 158.3 34.7 75.0 142.5 187.9 205.0 Domestic 13.0 30.9 50.3 66.6 15.7 33.8 52.4 71.4 71.6 Overseas 16.7 40.3
Slide 15: (Reference) Consumer Area / Full Game: Unit Sales Trend
(Reference) Consumer Area / Full Game: Unit Sales Trend FY2022/3 FY2023/3 FY2024/3 Through Through Through Through Through Through Full Year Q1 Q1 Q2 Q3 Q4 Q2 Q3 Q4 Forecast Full Game: Number of Titles Japan 0 title 3 titles 5 titles 6 titles 3 titles 7 titles 11 titles 15 titles 12 titles Asia 1 ti
Slide 16: Major new titles released in FY2023/3
(Reference) Consumer area/Full Game: Major new titles released in FY2023/3 [Titles released in FY2023/3] "Sonic Frontiers" • IP growth through hits for movies and animations, collaborations, and etc. • Expand sales opportunities by global simultaneous launch x multi-platform support • Worldwide unit
Slide 17: Major new titles to be released in FY2024/3
(Reference) Consumer area/Full Game: Major new titles to be released in FY2024/3 [Titles to be released in FY2024/3] *Only announced titles are listed. Figures in () to the right of the title are the planed release dates "Sonic Origins Plus" (Jun. 23) "Samba de Amigo: Party Central" (Summer 2023) ©S
Slide 18: Entertainment Contents Business: Sales Schedule (Consumer)
(Reference) Entertainment Contents Business: Sales Schedule ～FY2023/3 In or after FY2024/3（Plan） 13 Sentinels: Aegis Rim ENDLESS™ Dungeon Sonic Frontiers (for Nintendo Switch™) Hatsune Miku: Project DIVA Mega Mix+ Etrian Odyssey Origins Collection Football Manager 2023 (for PC) New titles Sonic Orig
Slide 19: Entertainment Contents Business: Sales Schedule (Amusement Machine)
(Reference) Entertainment Contents Business: Sales Schedule ～FY2023/3 In or after FY2024/3（Plan） StarHorse4 / EIKETSU TAISEN / maimai DX / CHUNITHM / O.N.G.E.K.I. / MJ ARCADE <Major titles in operation> INITIAL D THE ARCADE / KanColle Arcade / Fate Grand Order Arcade / lalamee Amusement Machine <Maj
Slide 20: Pachislot and Pachinko Machines Business
Pachislot and Pachinko Machines Business FY2023/3 Results (Billion yen) FY2022/3 FY2023/3 FY2024/3 Full Year Full Year Full Year Results Results Forecast Achieved significant increases in sales and profits YoY Sales 75.8 94.2 115.0 • Especially pachislot machines (No. 6.5 models) performed strongl
Slide 21: Pachislot and Pachinko Machines Business: Sales Schedule
New series (Reference) Pachislot and Pachinko Machines Business: Titles which installation Sales Schedule started from previous FY / Specification changed title ～FY2023/3 In or after FY2024/3 (Plan) Pachislot Saga of Tanya the Evil Smart Pachislot Hokuto No Ken Pachislot CODE GEASS Lelouch Pachislot
Slide 22: Resort Business
Resort Business (Billion yen) FY2022/3 FY2023/3 FY2024/3 FY2023/3 Results Full Year Full Year Full Year Results Results Forecast Strong performance centered on individual customers, Sales 8.6 11.5 12.0 leading to a recovery in earnings Operating Income -2.5 -1.1 -1.0 • PHOENIX RESORT: Strong growt
Slide 23: Status of Each Facility: PHOENIX RESORT
(Reference) Status of Each Facility: PHOENIX RESORT PHOENIX RESORT: Sales by type of facility users • Sales and facilities users in FY2023/3 exceeded the level prior to COVID-19, driven by strong individual customers • In addition to continue to capture individual customer demand, the recovery of
Slide 24: Status of Each Facility: PARADISE SEGASAMMY
(Reference) Status of Each Facility: PARADISE SEGASAMMY (KRW million) Trend of Drop amounts* at PARADISE CITY *Drop amounts: Purchased amount of chips -24-
Slide 25: Progress of the Medium-Term Plan (~FY2024/3)
03 Progress of the Medium-Term Plan (～FY2024/3) -25-
Slide 26: Long-term vision
Long-term vision Value (Mindset and DNA) “Creation is Life” × Mission / Purpose (Raison d’être) “Always Proactive, “Constantly Creating, Forever Captivating” —Making life more colorful— Always Pioneering” Vision (Ideal self) Be a Game Changer Pachislot and Gaming Entertainment Pachinko & Resort Sust
Slide 27: Mid-term Plan: Ordinary Income Trend (FY2015/3-FY2024/3)
Mid-term Plan: Ordinary Income Trend (FY2015/3-FY2024/3) Mid-term plan was achieved one year ahead of plan, driven by growth of Entertainment Contents and Pachislot & Pachinko Mid-term Plan (Billion yen) Beyond the Status Quo (Announced on May 2021) Road to 2020 (Structural Beyond the Status Quo r
Slide 28: Entertainment Contents Business Consumer area
Entertainment Contents Business Consumer area Entertainment Contents Business -28-
Slide 29: Becoming a Global Leading Contents Provider
Long-term Target Becoming a Global Leading Contents Provider FY2024/3 FY2026/3 Reinforcing the earnings base by strengthening the global branding of existing IPs Creation of “Super Games” Investment promotion period toward becoming a global player Proactive growth investment Announced the implementa
Slide 30: Key Points in FY2024/3
Key Points in FY2024/3 Further Expansion of Major IPs (Full Game) • Promote the global simultaneous launch x multi-platform support of several new titles • Strengthen repeat sales of series titles released in the previous fiscal year Secure stable earnings from existing mainstay titles (F2P) • S
Slide 31: Expanding Touchpoints
Expanding Touchpoints 1 Strengthen global simultaneous launch Expanding touchpoints x multi-platform support FY2022/3 FY2023/3 FY2024/3 Plan Global simultaneous launch × Multi-platform support (new titles) 7 titles 10 titles 12 titles (Approx. 6M unit sales) （Approx. 8.8M unit sales） （Approx. 12M
Slide 32: Prolonging Product Life Cycles
Prolonging Product Life Cycles 2 Remake/Remaster, Spin-Off / Change of theme, Prolonging product Multichannel monetization life cycles (Additionally support subscription services, etc.) FY2022/3 FY2023/3 FY2024/3 Plan Remake/Remaster, Spin-Off / Change of theme (new titles) Approx. 4M unit sales A
Slide 33: Strengthening User Engagement
Strengthening User Engagement 3 Strengthening the mix of media, Strengthening user engagement expanding SONIC's brand awareness CY2020 CY2021 CY2022 CY2023～ Future initiatives with PARAMOUNT PICTURES Development of a third feature film Development of original TV series to be distributed in Param
Slide 34: Game Market Data: Market Size by Region
Game Market Data: Market Size by Region Worldwide market has grown to nearly double in size since 2015 Although it reached a brief plateau in 2022 and 2023, the growth is expected from 2024 onward (Trillions yen) Forecast *In-house estimation based on data from "Newzoo Global Games Market Data Jan
Slide 35: Pachislot and Pachinko Machines Business
Pachislot and Pachinko Machines Business Pachislot and Pachinko Machines Business -35-
Slide 36: Long-term Targets
Long-term Targets Triple crown of share in Building a stable utilization, in installation, earnings structure and in sales FY2024/3 No. 1 in total utilization share of Pachislot and Pachinko Maintain stable earnings Improvement of Creation of hits business efficiency -36-
Slide 37: Review of 2nd Year of Medium-Term Plan: Total Utilization Share
Review of 2nd Year of Medium-Term Plan: Total Utilization Share Although Pachislot was strong, total utilization share decreased YoY due to struggle in Pachinko *1 *1 【Trend of our utilization share】 FY2022/3 FY2023/3 1st K Company 18% 1st S Company 18% 2nd S Company 18% 2nd K Company 16% 3rd Samm
Slide 38: Market Trend (Utilization Trend)
Market Trend (Utilization Trend) Utilization level of Pachislot is significantly increasing 【Utilization Trend (Pachislot & Pachinko)】 Beginning of “Smart Pachislot Hokuto No Ken” Installation ・Pachislot Utilization level has increased due to installation of Beginning of Smart Pachislot No. 6.5 Mo
Slide 39: Market Forecast of FY2024/3
Market Forecast of FY2024/3 Expect increase of unit sales driven by Pachislot in FY2024/3 【Transition of Unit Sales】 (Thousand) *1 *In-house Estimation *Includes FY2023/3 Smart Pachislot unit sales (Approx. 90,000 units) -39-
Slide 40: Smart Pachislot Hokuto No Ken
“Smart Pachislot Hokuto No Ken” Installed Units: Approx. 40,000 units (as of April 28) *Of the above, approx. 5,000 units were delivered in advance in FY2023/3 • Record high utilization start out of past “Hokuto” series Maintains top class utilization in market • Actively implement promotion such
Slide 41: Smart Pachislot Hokuto No Ken: Utilization Share
“Smart Pachislot Hokuto No Ken” Our total utilization share has increased significantly due to installation of “Smart Pachislot Hokuto No Ken” 【Transition of total utilization Share (2023)】 14.2% (2nd Place) 8.8% Beginning of (4th) “Smart Pachislot Hokuto No Ken” Installation *In-house estimation
Slide 42: Investment in Growth: Investment Strategy
Investment in Growth Investment Strategy -42-
Slide 43: Concept of Investment in Growth (~FY2026/3)
Concept of Investment in Growth (～FY2026/3) Implemented investment in the following growth area Area of consideration for investment Progress Expansion of organic development Strengthen pipeline development resources Strengthen global mobile and online Establishment of SEGA Sapporo Consumer
Slide 44: Overview of the Acquisition of Rovio
Overview of the Acquisition of Rovio Deal Overview Acquisition Price • EUR 9.25 per Share • EUR 1.48 per Option At the meeting of the Board of Directors held on April 17, 2023, An • 19.0% premium to Rovio’s closing price as of April 14, 2023, announcement of a tender offer to acquire Rovio Entertain
Slide 45: Overview of Rovio
Rovioの概要 Overview of Rovio Company Overview Financial Trend / Segmentation Long Term Trend of Revenue and Operating Margin • Founded: 2003 400 （EUR m） 20% 15.6% 13.2% 15% 300 11.2% • HQ: Espoo, Finland 8.8% 10.5% 9.0% 10% 6.2% 200 • Stock Exchange: NASDAQ Helsinki 317.7 5% 281.1 289.0 272.2 286.2 10
Slide 46: Key Strength of Rovio①: Development and Operational Capabilities
Key Strength of Rovio① : Development and Operational Capabilities regarding Mobile Gaming Holds 8 studios with a focus on casual-games, serving as a base for its strong game portfolio Game Studio Portfolio HISTORIC FOOTHOLD 6.7 M 5.0 B 8 Daily Active Users Cumulative Live Service (2022 Average) Down
Slide 47: Key Strength of Rovio②: The Globally Popular Angry Birds IP
Key Strength of Rovio②：The Globally Popular Angry Birds IP Launch of Angry Birds Launch of Angry Birds 2 5bn Cumulative Downloads 2009 2015 2022 Game AB Movie AB Movie 2 2016 2019 Movie・ Anime TV Anime TV Anime 2013 2022 LBE1・ Merchandise LBE Business operated all across the globe as of the end of 2
Slide 48: Gross Booking per Title (Quarterly)
Gross Booking per Title（Quarterly） Core titles; Angry Birds 2 and Angry Birds Dream Blast boast strong sales AB Dream Blast is on course to pass the current top title, AB2 (EUR m) 90.0 82.3 80.0 76.1 6.1 74.2 76.1 4.1 1.5 72.6 2.7 70.0 67.9 67.3 68.3 2.0 4.5 2.5 2.0 0.1 64.6 65.0 64.5 1.0 1.8 1.8 62
Slide 49: Key Strength of Rovio③: Beacon, the Tool for Live Service Game Operation
Key Strength of Rovio③：“Beacon”, the Tool for Live Service Game Operation Accelerate the globalization of SEGA’s mobile game business, which is currently Japan-oriented Player Recognition ※ Categories where synergies can be most expected Analytics Advertising Effectiveness AB testing Live Operation
Slide 50: Progress of Consumer Area's Mid Term Plan
Progress of Consumer Area’s Mid Term Plan Conversion of current IP into global IP is under progress Growth Strategy is moving to the next stage Core Factors for Next Growth Strategy SEGA ＝ Treasure Island Revive and scale globally Key growth factors in the Past recognized IP, by reforming it to
Slide 51: To Increase Presence in the Global Gaming Market
To Increase Presence in the Global Gaming Market We recognize that a Japan-oriented mobile gaming business is not ideal By expanding to overseas markets, we can increase our presence in the rich mobile gaming market Global Market Size Revenue Breakdown of SEGA’s Consumer Game Business PC 19% Oversea
Slide 52: Geographical Breakdown of The Mobile Gaming Business after the Acquisition
Geographical Breakdown of The Mobile Gaming Business after the Acquisition By acquiring Rovio, SEGA’s overseas mobile revenue would as an estimate increase to 45% of total mobile revenue SEGA Mobile Rovio Mobile Simple consolidated basis Japan/Overseas Ratio Japan/Overseas Ratio Japan/Overseas Ratio
Slide 53: Purpose of this Deal: Complementary Capabilities
本件の意義：補完的なケイパビリティ Purpose of this Deal：Complementary Capabilities The two companies share common values and complementary capabilities There are large potential for synergies, to take a leap forward as a global player Global development capabilities for large-scale Development and operational ca
Slide 54: Expected Synergies
想定するシナジー Expected Synergies Utilization of Rovio’s distinctive know-how in live service mobile game operation, to bring SEGA’s current and new titles to the 1 global mobile gaming market, where there is large potential, and many users can be accessed Rapid expansion of both companies’ fanbase by sha
Slide 55: Establishment of a Joint Venture with PAPYLESS CO., LTD.
Establishment of a Joint Venture with PAPYLESS CO., LTD. Launch joint label for the production of vertical scroll comics Concluded a capital and business alliance with PAPYLESS CO., LTD.which develops e-book platforms domestically and overseas. We will form a creative team that can handle everythi
Slide 56: Initiatives for Sustainability
Initiatives for Sustainability -56-
Slide 57: Initiatives for Sustainability
Initiatives for Sustainability -57-
Slide 58: Initiatives for Sustainability (Investment in Human Resources)
Initiatives for Sustainability (Investment in Human Resources) [Target Company] 4 key indicator for human resources 1), 2), 3) : SEGA SAMMY HOLDINGS, SEGA (Japan), Sammy 4): Major Group Companies in Japan 1) Development of culturally diverse human resources*1 2) Active career opportunities for wom
Slide 59: ESG Ratings, Evaluations and etc.
ESG Ratings, Evaluations and etc. MSCI ESG RATINGS Adoption Status in Major ESG Indices CDP Climate Change：B Water：C- -59-
Slide 60: Financial Strategy
Financial Strategy Financial Strategy -60-
Slide 61: To Maximize the Corporate Value (~FY2026/3)
To Maximize the Corporate Value (~FY2026/3) Shift to the management focusing on capital efficiency Investment focus on Growth of profit Consumer business Expansion of equity spread Ordinary Income: Over 50.0 Billion yen ROE: Over 10% Improvement of ROIC management Maximization asset efficiency
Slide 62: Expansion of Equity Spread
Expansion of Equity Spread [Trend of ROE, COE and Equity Spread] Equity spread is trending positive in the last two fiscal years due to growth of the profits in each business *ROE: Return on equity *COE: Cost of equity (Source: Bloomberg) *Equity spread: ROE-COE -62-
Slide 63: Per Business ROIC
Per Business ROIC [Per business ROIC trend] ROIC of each business is trending towards improvement ・Entertainment Contents Business ROIC is trending at a high level mainly due to growth in profits at Consumer area, while increasing investment capital ・Pachislot and Pachinko Machines Business ROIC is
Slide 64: Investment Capital/Adjusted Profits per Business
Investment Capital/Adjusted Profits per Business [Investment capital trend per business] [Adjusted profits trend by business] *Investment Capital per business: investment capital at the end of each business period (total assets-current liabilities excluding interest-bearing debt)-CMS deposits -64- *
Slide 65: Impact of Rovio Acquisition (Entertainment Contents Business)
Impact of Rovio Acquisition (Entertainment Contents Business) Impact on adjusted profits of Entertainment Contents Business • Impacts on consolidated results are currently being calculated (Reference) Operating profit of Rovio in the latest period is approximately 28.5 million euros (4.1 billion y
Slide 66: EPS Trend
EPS Trend EPS* improved from expansion of business results and share buybacks *EPS = Earnings per share *In FY2022/3 and FY2023/3, decrease in taxable income from net loss carried forward and income taxes, etc. decreased from tax credit relevant to research and development for subsidiaries in U.K
Slide 67: Shareholder Returns
Shareholder Returns (Process of Determining the Amount of Return and Methods) FY2024/3 FY2025/3 Q1 Q2 Q3 Q4 Q1 FY2023/3 Q1 Q2 Q3 FY2024/3 Results Results Results Results Results Announcement Announcement Announcement Announcement Announcement Share buybacks (if implemented) Interim dividends Year-en
Slide 68: Shareholder Returns Trend (FY2018/3-FY2024/3)
Shareholder Returns Trend (FY2018/3-FY2024/3) Based on the policy of a total return ratio of 50%, annual dividends for FY2023/3 is expected to be 59 yen and plan to execute share buybacks of 10.0 billion yen [Results and forecast of dividends per share] *1 FY2018/3 FY2019/3 FY2020/3 FY2021/3 FY202
Slide 69: Total Shareholder Return Trend
Total Shareholder Return Trend FY2024/3 FY2018/3 FY2019/3 FY2020/3 FY2021/3 FY2022/3 FY2023/3 (Forecast) Stock Price Fluction Rate (yen) 193 ▲379 9 412 386 400 ー Dividend per share (yen) 40 40 40 30 40 59 47 Total Shareholder Return ー 79.9% 82.8% 109.0% 134.3% 161.5% ー *Stock Price fluctuation Rate
Slide 70: Appendix
04 Appendix SEGASammy
Slide 71: Trend of Balance of Content Production Expenses in B/S
Trend of Balance of Content Production Expenses in B/S (Consumer area) (Unit: billion yen) *Balance of work in progress R&D expenses of titles before release + balance of unamortized R&D expenses of released titles -71-
Slide 72: Trend of No. of Employees by Segment
Trend of No. of Employees by Segment (Unit: employees) *No. of employees are the No. of full-time employees and permanent contract employees. Excludes the No. of temporary employees -72-
Slide 73: Resort Business (PARADISE SEGASAMMY)
Resort Business (PARADISE SEGASAMMY) (KRW Billion) 2022/3 2023/3 Full year Full year FY2023/3 Results Results Results Sales 161.5 270.5 Recovery trend due to relaxation of travel restrictions Casino 86.6 157.5 • Drop amounts of Japanese VIP recovered rapidly which close to Hotel 67.7 95.9 before C
Slide 74: Overview of Rovio
Overview of Rovio Trade name Rovio Entertainment Oyj Consolidated performance and financials of Rovio for the last three years Location of head office Keilaranta 7 02150, Espoo, Uusimaa Finland Fiscal year Name / title of the FY2020/12 FY2021/12 FY2022/12 Alexandre Pelletier-Normand / CEO (Units： EU
Slide 75: https://www.segasammy.co.jp/en/ir/
https://www.segasammy.co.jp/en/ir/ Cautionary Statement for Investors and Shareholders with Respect to Nevada Gaming Statutes and Please visit below website for more information of products and services of Regulations SEGASAMMY. SEGA SAMMY HOLDINGS INC. (“the Company”) is registered with the Nevada