Sega Sammy Holdings Inc. · TSE:6460
Sega Sammy — Q2 FY2021/3 Earnings Presentation
46 slides from Sega Sammy's earnings presentation, Nov 6, 2020
Slide 1: Fiscal Year Ending March 2021 2Q Results Presentation
Fiscal Year Ending March 2021 2Q Results Presentation Nov 6, 2020 [Disclaimer] Market forecasts, operating results forecast, and other information contained in this materials are based on judgements and projections of the Company’s managements based on currently available information. Therefore, ple
Slide 2: 1. FY Mar 2021 2Q Results, Overview of Revised Full-Year Forecasts
1. Fiscal Year ending Mar 2021 2Q Results, Overview of Revised Full-Year Forecasts
Slide 3: FY2021/3 2Q Results, Full-Year Forecast Summary
FY2021/3 2Q Results, Full-Year Forecast Summary (JPY Billion) 2020/3 2021/3 Full Year Revised Full Year FY2021/3 2Q Results Through Through Through Forecast Forecast 2Q 4Q 2Q (announced on Aug 5) (announced ◆ Significant decline in sales YoY and recording of losses on Nov 6) Sales 165.5 366.5 110.2
Slide 4: Breakdown of major extraordinary losses / income
Breakdown of major extraordinary losses / income In and after 3Q ＜Extraordinary income ＞ 1Q results 2Q results (forecast) Subsidy income for COVID-19 0.07 billion yen 0.5 billion yen - (Structural reform) - - 5.9 billion yen Gain on sales of investment securities In and after 3Q ＜Extraordinary losse
Slide 5: Breakdown of Income (FY2021/3 2Q Results)
Breakdown of Income (FY2021/3 2Q Results) (Unit: billion yen) -3.0 Operating Income Non-operating income/ losses and extraordinary income / losses 3.2 Non-operating Non-operating income 3.2 Income Gain on valuation of investment securities 2.2 3.7 Non-operating Dividends income 0.3 Expenses Non-oper
Slide 6: Consolidated Costs and Expenses
Consolidated Costs and Expenses (Unit: billion yen) 2020/3 2021/3 Revised Full Year Full Year Through Through Through Forecast Forecast 2Q 4Q 2Q (announced Main factors for increase or decrease for 2Q and revised (announced on Aug 5) operating results forecast on Nov 6) R&D Expense / Expenses decrea
Slide 7: Consolidated Balance Sheet Summary
Consolidated Balance Sheet Summary (Unit: billion yen) As of end of As of end of Change March 2020 September 2020 Main factors for increase / decrease YoY Changes Total Current Assets 268.9 262.0 -6.9 Cash and Deposits 159.0 139.1 -19.9 Current Assets -6.9 Notes and accounts receivable - 40.4 26.1 -
Slide 8: Liquidity of Funds
Liquidity of Funds ✓ Secured 311 billion yen as liquidity, which enabling flexible response to funding demand, including working capital for existing business and strategic investments in the future. (Unit: billion yen) Working capital of existing business: Approx. 70 billion yen -8-
Slide 9: Market and business environment for the current fiscal year
Market and business environment for the current fiscal year 2021/3 Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Pachislot and *Utilization has been recovering *Utilization is stable at about 70 to 80 percent, and the removal of previous *Halls suspended operation since resumption of o
Slide 10: Pachislot and Pachinko Machines Business
Pachislot and Pachinko Machines Business (JPY Billion) 2020/3 2021/3 FY2021/3 2Q Results Revised Full Year Through Through Through Forecast Full Year ◆ Resumed sales of new titles from 2Q. Forecast 2Q 4Q 2Q (announced on Aug 5) (announced ◆ Although recorded losses, the extent of losses decreased on
Slide 11: Pachislot and Pachinko Machines Business
Pachislot and Pachinko Machines Business (JPY Billion) 2020/3 2021/3 Revised Full Year Full Year Through Through Through Forecast Forecast 2Q 4Q 2Q (announced (announced on Aug 5) on Nov 6) Number of Titles 1 title 5 titles 1 title 8 titles 6 titles Pachislot Unit Sales (units) 28,360 123,336 4,885
Slide 12: Pachislot and Pachinko Machines Business: Major titles
Pachislot and Pachinko Machines Business: Major titles 2Q In and after 3Q Pachislot Pachinko Pachislot Pachinko “Pachislot Shin Hokuto Muso” “P Psalms of Planets Eureka Seven “Pachislot The Seven deadly Sins” “P Shin Hokuto Muso Chapter 3” HI-EVOLUTION ZERO” ©Buronson & Tetsuo Hara/NSP 1983, Approve
Slide 13: Entertainment Contents Business
Entertainment Contents Business (JPY Billion) 2020/3 2021/3 Revised FY2021/3 2Q Results Full Year Full Year Through Through Through Forecast 2Q 4Q 2Q (announced Forecast (announced ◆ Although sales decreased, profit increased YoY due to on Aug 5) on Nov 6) the contribution of Consumer area. Sales 11
Slide 14: Consumer area
Consumer area Sales Operating Income (Unit: billion yen) Operating Income Margin FY2021/3 2Q Results ◆ Despite a decline in QonQ, profit increased substantially YoY. ◆ Strong performance of repeat sales, centered on overseas. ◆ Recorded royalties for some new titles. ◆ Performance of new titles for
Slide 15: Consumer area: Major Titles
Consumer area: Major Titles 2Q In and after 3Q "HUMANKINDTM" *April 2021 Full Game © Amplitude Studios 2020. © SEGA. "A Total War Saga: TROY" "Shin Megami Tensei Ⅲ "YAKUZA : LIKE A DRAGON" "Puyo Puyo™ Tetris® 2" © SEGA. Developed by The Creative Assembly Limited. NOCTURNE HD REMASTER" ©SEGA ©SEGA Te
Slide 16: Amusement Machine Sales area
Amusement Machine Sales area Sales Operating Income Operating Income Margin (Unit: billion yen) FY2021/3 2Q Results ◆ Utilization of amusement facilities is in recovering trend and improving QoQ. ◆ Sold centered on UFO Catcher series machines and prizes for UFO Catcher. Forecast ◆ Proceed the stream
Slide 17: Amusement Center Operations area
Amusement Center Operations area Sales Operating Income Operating Income Margin (Unit: billion yen) FY2021/3 2Q Results ◆ Sales of existing stores were 50.1 % YoY. ◆ Currently, although stores mainly in suburban and shopping center are recovering, stores in central Tokyo remain sluggish. Forecast ◆
Slide 18: Animation / Toys area
Animation / Toys area Sales Operating Income Operating Income Margin (Unit: billion yen) FY2021/3 2Q Results ◆ Animation: Significant decrease in allocated revenue due to postponement of release of theatrical version of "Detective Conan: The Scarlet Bullet" as the impact of COVID-19. ◆ Toys: Focused
Slide 19: Resort Business
Resort Business FY2021/3 2Q Results (JPY Billion) 2020/3 2021/3 Full Year Revised ◆ PHOENIX RESORT: Facilities utilization is in recovering Full Year Through 2Q Through 4Q Through 2Q Forecast (announced Forecast trend due to "Go To Travel Campaign“. (announced on Aug 5) on Nov 6) (Number of facility
Slide 20: Resort Business (PARADISE SEGASAMMY)
Resort Business (PARADISE SEGASAMMY) （KRW Billion） FY2020 2Q FY2021 2Q FY2021/3 2Q Results （KRW Billion） Results Results ◆ The number of facility users declined. Sales 196.4 115.7 Casino 161.1 91.8 • Number of casino users YoY: 55.8% Hotel 28.3 19.4 • Streamlined the facilities operation by Other 7.
Slide 21: Resort Business (PARADISE SEGASAMMY)
Resort Business (PARADISE SEGASAMMY) Transition of Drop* amounts at PARADISE SEGASAMMY (KRW Million) April, 2017 Opening of Paradise City -21- *Drop amounts: Purchased amount of chips by customers at the table *Calculation method was changed after Jan 2018
Slide 22: 2. Structural Reforms and Future Direction
2. Structural Reforms and Future Direction
Slide 23: Operating results for FY2021/3
Operating results for FY2021/3 ✓ Expansion of net losses due to the Net income -24.5 billion yen recording of structural reform (full-year forecast) expenses Interim: 10 yen, ✓ Review of dividends amount Year-end: undecided ✓ Reduction of directors’ -30％ (Representative Director), etc. compensation
Slide 24: Regarding the implementation of Structural Reforms
Regarding the implementation of Structural Reforms ✓ Building a business structure that can adapt to Review of business Portfolio market condition. Transfer of Amusement Center Operations area ✓ Clarify the growing area by selecting and focusing on Optimization of the scale of Amusement Machine busi
Slide 25: Impact associated with Structural Reform
Impact associated with “Structural Reform” PL impact for PL impact for the current FY the next FY (Forecast) (Forecast) ・Structural reform expenses in １．Review of business Amusement Center Operations -20.5 billion +5.0 billion Portfolio area yen yen ・Closure of Orbi Yokohama (Extraordinary (Ordinary
Slide 26: Future outlook for each segment
Future outlook for each segment
Slide 27: Pachislot and Pachinko Machines Business
Pachislot and Pachinko Machines Business ✓ Utilization of Pachinko hall remains at around 70-80% ✓ Demand is expanding due to the arrival of deadline for removal in the second half to the next fiscal year. ✓ Recovery of business results from increase of sales unit and reduction of fixed expenses. -2
Slide 28: Market Environment of Pachislot and Pachinko Machines Business
Market Environment of Pachislot and Pachinko Machines Business (Transition of utilization of pachinko halls) ➢ Utilization of hall remains at around 70-80% YoY comparison of average utilization rate of pachislot and pachinko Couldn't compare the data during the state of emergency period. 2020 -28- *
Slide 29: Pachislot and Pachinko Machines Business (removal schedules)
Pachislot and Pachinko Machines Business (removal schedules) ➢ Deadline for removal arrives from the second half to the next fiscal year Pachislot Pachinko (Unit: K units) FY2021/3 FY2022/3 FY2021/3 FY2022/3 359K units 609K units 403K units 918K units *In-house estimates as of the end of October 202
Slide 30: Pachislot and Pachinko Machines Business (Transition of results)
Pachislot and Pachinko Machines Business (Transition of results) ➢ Impact has bottomed out in the current fiscal year and aims for recovery of business results in the next fiscal year. ■ Transition of unit sales and operating income (Unit: billion yen) ✓ Unit sales to increase due to expansion of de
Slide 31: Entertainment Contents Business Consumer area
Entertainment Contents Business Consumer area ✓ Expanding trend of global market continues ✓ Recent titles in consumer area are performing strongly and expecting the continuous growth ✓ Strengthen the business design further to win globally -31-
Slide 32: Continuous Growth in the Global Game Market
Consumer area ➢ Continuous Growth in the Global Game Market 21.1 (Unit: trillions yen) 9.8 (Forecast) *In-house estimation based on data from "Newzoo Global Games Market Data January 2020" (Exchange rate: 1 USD = 105 JPY) -32-
Slide 33: Consumer area (Sales Transition of Full Game)
Consumer area (Sales Transition of Full Game) ➢ Performance of repeat sales continues to be strong. (Unit: billion yen) "Persona 5 Royal" (Western version) "Persona 5 Scramble: The Phantom Strikers " "YAKUZA : LIKE A DRAGON“ (Japanese version) "Mario & Sonic at the Olympic Games Tokyo 2020™" "Person
Slide 34: Consumer area (Sales Transition of F2P)
Consumer area (Sales Transition of F2P) (Unit: billion yen) ➢ New titles are performing strongly. "Re: ZERO -Starting Life in Another World- Lost in Memories" "Project SEKAI COLORFUL STAGE feat. Hatsune Miku" 14.4 "PHANTASY STAR ONLINE 2" (Global version) 11.1 10.5 9.1 9.0 9.5 -34- *1 Figures for FY
Slide 35: Recent titles (FY21/3)
Recent titles (FY21/3) Phantasy Star Online 2 A Total War Saga: TROY Football Manager 2020* (Global version) Existing Multi device Existing Existing Expansion of the brand IP Entry to new platform IP IP Multi region recognition ➢ Distribution on Xbox, Steam, ➢ Offered exclusive pre- ➢ Roll-out on mu
Slide 36: Recent titles (FY21/3)
Recent titles (FY21/3) Re: ZERO -Starting Life in Project SEKAI COLORFUL STAGE Another World- Lost in Memories feat. Hatsune Miku External Title based on popular External Joint development IP animation IP ➢ Titles using TV animation based ➢ Jointly developed with Colorful on a popular novel. Palette
Slide 37: The optimal IP roll-out on optimal platform
Focus on Consumer area ➢ The optimal IP roll-out on optimal platform Four IP strategies Existing IP Global New IP Partnerships External IP Revived IP -37-
Slide 38: Expansion of business roll-out
Expansion of business roll-out Xbox Game Pass Steam YAKUZA 0 and others Persona 4 The Golden Xbox (PC version) YAKUZA: LIKE A DRAGON NetEase Games (Xbox series X) Stadia Total War™ Arena Football Manager 2020 PlayStation Tencent WeGame Luna Valkyria Chronicles Sonic Mania and others Nintendo Epic Ga
Slide 39: New title (F2P) Total War Arena
New title (F2P) “Total War™ Arena” The Creative Assembly NetEase Launched the official service for Chinese Mainland through NetEase, a leading IT company in China. (9/23) ⒸSEGA。版权所有。Creative Assembly、Creative Assembly徽标、Total War、Total War：Arena与Total War徽标皆是The Creative Assembly Ltd.的注册商标或商标。SEGA 与
Slide 40: New title (Full Game) YAKUZA: LIKE A DRAGON
New title (Full Game) YAKUZA : LIKE A DRAGON SEGA Xbox Launch “YAKUZA : LIKE A DRAGON” at first time in Xbox Series X. (11/10) ©SEGA -40-
Slide 41: New title (F2P) Sakura Revolution
New title (F2P) “Sakura Revolution” SEGA DELiGHTWORKS Inc. Co-development of the new title for smartphone -41-
Slide 42: New title (Full Game) Shin Megami Tensei V, HUMANKIND
New title (Full Game) ”Shin Megami Tensei Ⅴ” © Amplitude Studios 2020. © SEGA. “HUMANKINDTM” ©ATLUS ©SEGA All rights reserved. (within 2021) Plan for subsequential launch on Steam, Epic Plan to release on Nintendo Switch Games and STADIA from April, 2021 within 2021 -42-
Slide 43: Resort Business (Domestic IR)
Resort Business (Domestic IR) ✓ Re-revise the schedule for domestic IR ✓ Focus on RFP in Yokohama City ✓ Aiming to participate with carefully assessing conditions for future entry, etc. -43-
Slide 44: Shift to the business structure adequate for environment
Shift to the business structure adequate for environment ➢ Continue the structual reform to create a lean business structure FY2022/3 onward • Recovery of business performance in Pachislot and Pachinko business • Focus on global business in Consumer area • Participation in Domestic IR -44-
Slide 45: Q&A
3. Q&A SEcASamny -45-
Slide 46: Cautionary Statement and Website Information
https://www.segasammy.co.jp/english/ Cautionary Statement for Investors and Shareholders with Respect to Nevada Gaming Statutes and Please visit below websites for more information of products and service of Regulations SEGASAMMY. SEGA SAMMY HOLDINGS INC. (“the Company”) is registered with the Nevad
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