Sega Sammy Holdings Inc. · TSE:6460

Sega Sammy — Investor Presentation (May 2021)

39 slides from Sega Sammy's investor presentation, May 13, 2021

Slide 1: New Medium-Term Plan (FY2022/3-FY2024/3)
SEGA SAMMY HOLDINGS INC. New Medium-Term Plan (FY2022/3-FY2024/3) 2021/5/13 Market forecasts, operating results forecast, and other information contained in these materials are based on judgements and projections of the Company’s Disclaimer managements from currently available information. Therefore
Slide 2: Long-term vision
Long-term vision Value (Mindset and DNA) “Creation is Life” × Mission (Raison d’être) “Always Proactive, “Constantly Creating, Forever Captivating” —Making life more colorful— Always Pioneering” Vision (Ideal self) Be a Game Changer Pachislot and Entertainment Pachinko Resort Sustainability Global L
Slide 3: Beyond the Status Quo
New Medium-Term Plan (3 years) Beyond the Status Quo Goal -Breaking the Current Situation and Target Becoming a Sustainable Company- FY2024/3: Ordinary income 45.0 billion yen, ROE Over 10% Consumer area Pachislot and Pachinko Certification as a Strategy Investment Solidification of business operato
Slide 4: New Medium-Term Plan: Management Policies and KPIs
New Medium-Term Plan (3 years): Management Policies and KPIs Improvement of ROE by shifting to the management focusing on capital efficiency ROE 2.9% 0.9% 4.6% 0.4% 5% 7% 10% (Forecast) (Forecast) (Forecast) 800 4,000 (Unit: Billion yen) 366.5 337.0 350.0 700 3,500 323.6 331.6 312.0 600 3,000 277.7
Slide 5: New Medium-Term Plan: Per segment breakdown
New Medium-Term Plan (3 years): Per segment breakdown Aiming for ROE10% and ordinary income of 45.0 billion yen in FY2024/3 FY21/3 Results FY22/3 Forecast FY23/3 Forecast FY24/3 Forecast (Unit: Billion yen) Sales 217.8 213.0 238.0 242.0 Entertainment Operating Income 27.9 23.0 28.5 39.0 Contents Ord
Slide 6: New Medium-Term Plan: Strategic Frameworks
New Medium-Term Plan (3 years): Strategic Frameworks Focused investment Investment Consumer area ◼ Creation of Super Game in growth IR business ◼ Certification as a business operator of IR Pachislot and Creation of Hits Ensure Pachinko Amusement Machine × stable earnings Animation / Toys Business ef
Slide 7: Entertainment Contents Business Consumer Area
Entertainment Contents Business Consumer Area -42-
Slide 8: To be a Global Leading Contents Provider
Long-Term Objectives To be a Global Leading Contents Provider FY2024/3 FY2026/3 Strengthen earnings base by making existing IPs into global brand Creation of Super Game Investment promotion period towards global players Proactive investment in growth (Additional investment of up to 100.0 billion yen
Slide 9: Market Size and Growth Potential
Market Size and Growth Potential Market Size Trend (Forecast) Worldwide Game Player Population (Forecast) (Trillion yen) 21 (Billion person) 3.2 19 2 2.8 1 0.8 4 4 0.7 2.0 0.4 10 5 0.4 0.2 5 0.4 1 0.2 0.3 2 0.2 3 8 1.7 7 1.4 1.0 3.2 2 2 1 0.1 0.1 0.1 2015 2020 2023 2015 2020 2023 *Source: Created ba
Slide 10: Expansion of Platformers
Expansion of Platformers Barriers between devices and regions disappeared and point of contact with users are increasing NetEase Games Epic Games NETFLIX Xbox Game Pass Steam Apple Arcade Tencent WeGame Stadia PlayStation Xbox oculus Luna Nintendo Changes in the micro-transaction model One-off sales
Slide 11: Strategic Portfolio: Key strategies
Strategic Portfolio 【Key strategies】 Growth High (Global) Priority Strategies for Priority Strategies for potential 3 years 5 years Strategy 1: Strategy 2: Creation of Super Game Making existing IPs into global brand ⚫ Establishment of strong IP which is recognized as a ⚫ Creation of titles which ca
Slide 12: Strategic Portfolio: Earnings
Strategic Portfolio Strengthen existing IPs to build a solid structure in 3 years Create Super Game in 5 years Priority Strategies for 5 years Strategy 2: Creation of Super Game Priority Strategies for 3 years Earnings Strategy 1: Making existing IPs into global brand Utilization of past IPs Support
Slide 13: Strategy 1: Making Existing IPs into Global Brand
Strategy 1: Making Existing IPs into Global Brand Grow mainstay IPs which holds core fans as a global brand ＜Image of Brand Expansion＞ 1 2 3 Expansion of Prolonging the Strengthening of touch points product life cycle user engagement ◼ Strengthen global roll-out ◼ Utilization of IP assets ◼ Communit
Slide 14: Strategy 1 Example: Expand sales areas with simultaneous launch
Strategy 1: Making Existing IPs into Global Brand (Example) Expansion of ◼Expand sales areas with the first worldwide touch points simultaneous launch from Ryu ga Gotoku studio ©SEGA • Simultaneous global launch (scheduled for September 24, 2021) • Support platforms: PlayStation4, PlayStation5, Xbox
Slide 15: Strategy 1 Example: Expansion of Sonic brand recognition
Strategy 1: Making Existing IPs into Global Brand (Example) Strengthening of ◼Expansion of recognition of Sonic brand by User Engagement strengthening Media Mix FY2020/3～ FY2023/3～ Sequel of the movie, and anime will be Made into a movie distributed in Netflix Released in March 2020 Box office $320
Slide 16: Strategy 2: Creation of Super Game
Strategy 2: Creation of Super Game Challenge toward creating large-scale global titles FY22/3 FY23/3 FY24/3 FY25/3 FY26/3 ⚫ Development of new FPS title at European studio Creation of ⚫ Utilization of IP assets ⚫ Create aimed for three to five years from now Super Game Make into Global Online Media
Slide 17: Utilization of IP Assets
Utilization of IP Assets Holds a large number of globally recognized IP Utilizing these IPs after careful examination Examples of past IP groups Examples of active IP (Including dormant IPs) ⚫ Phantasy Star ⚫ Ryu ga Gotoku (YAKUZA) ⚫ Crazy Taxi ⚫ Shinobi ⚫ Sonic ⚫ Persona ⚫ Jet Set Radio ⚫ Virtua Fi
Slide 19: Pachislot and Pachinko Machines Business
Pachislot and Pachinko Machines Business
Slide 20: Long-Term Objectives: Pachislot and Pachinko
Long-Term Objectives No.1 in Sales & Build a stable Utilization Share Earnings structure FY2024/3 Pachislot and Pachinko Maintain a stable earning No.1 in “Total Utilization Share” Improvement of Creation of Hits business efficiency © SEGA SAMMY HOLDINGS INC. All Rights Reserved. -55-
Slide 21: Market Environment
Market Environment The number of installed machines are gradually decreasing. Turnover* rate trends at a low level. Trend of installed units and turnover rate in the market Sources: National Police Agency and Yano research Institute Ltd. (*The data for 2020 are in-house estimations) *Annual Turnover
Slide 22: Sales Share
Sales Share Pachislot: Trends at around 15-20% in recent years Pachinko: Trends at around 10% Sales Share Trend (Sammy) Source: Yano research Institute Ltd. *Estimated by Yano Research Institute Ltd. With fiscal years from July of each year through June the following year as criteria. © SEGA SAMMY H
Slide 23: Utilization Share
Utilization Share Pachislot: Under 10% in recent years Reference: Ranking of Utilization share Total Utilization Share Pachinko: Trends at around 20% 1st S Company 19% 2nd K Company 17% Utilization Share Trend (Sammy) 3rd Sammy 13% 4th U Company 13% Pachislot: Utilization Share 1st K Company 35% 2nd
Slide 24: Creation of Hits
Creation of Hits 1 2 3 Increase the Review of Strengthening profitability product lineup media functions of a Hit ◼ Optimization of lineup (Centering on series ◼ Create machines from user’s perspective ◼ Expansion of user machines) communication by utilizing ◼ Deepening user analysis by digital medi
Slide 25: Improvement of Business Efficiency
Improvement of Business Efficiency 1 2 3 Improvement of Promotion of development Cost reduction e-commerce efficiency ◼ Commonization of images ◼ Promote introduction of between Pachislot and common components Pachinko between Pachislot and ◼ Transition of Pachinko Pachinko machine sales to e-commer
Slide 26: About ZEEG
About ZEEG ➢ Promote adoption of ZEEG cabinets ◼ Schedule a complete transition to ZEEG cabinet in Pachislot machines in FY 2024/3 ➢ Expansion of ZEEG cabinet utilization by external manufacturers ◼ Number of companies hired: Currently 3 → 5 companies (planned) *Including Sammy © SEGA SAMMY HOLDINGS
Slide 27: Resort Business
Resort Business
Slide 28: Our Aim for IR (Integrated Resort)
Our Aim for IR (Integrated Resort) ➢ Aim for the participation in Yokohama IR ➢ Achieve highly transparent and sustainable IR © SEGA SAMMY HOLDINGS INC. All Rights Reserved. -63-
Slide 29: Reference: New Medium-Term Plan (Trend of Operating Income)
Reference: New Medium-Term Plan (3 years) (Trend of Operating Income) (Unit: Billion yen) 42.0 13.0 27.6 27.0 Other, Elimination 6.5 20.0 9.0 17.7 13.0 23.2 9.0 Resort 11.9 13.4 35.0 Pachslot and 31.4 Pachinko 21.0 25.0 Others in 14.7 Entertainment 9.8 6.3 Animation/Toys -10.6 Amusement facilities A
Slide 30: Financial Strategy, Others
Financial Strategy, Others
Slide 31: 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 32: Concept of Investment in Growth and Shareholder Return
Concept of Investment in Growth and Shareholder Return (~FY2026/3) [Conceptual Diagram] Utilizing interest-bearing debt to Balancing proactive improve capital efficiency and investment in growth reduce capital costs through with shareholder return optimal capital structure <Procurement> <Allocation>
Slide 33: Concept of Optimal Capital Structure
Concept of Optimal Capital Structure Improvement of ROE and reduction of capital cost by utilizing interest-bearing debt [Conceptual Diagram] Reduce the retaining surplus capital (Unit: billion yen) Surplus capital Interest- Utilization of Interest- 52.0 Working bearing interest-bearing Surplus bear
Slide 34: Basic Policies on Shareholder Return
Basic Policies on Shareholder Return Introduce the following return policies being conscious of past dividend amount results • Total return ratio: 50% or more • Dividend Policy: DOE (Dividend on Equity Ratio) 3% or more • Regarding share buybacks, make flexible decision taking business performance t
Slide 35: ESG and SDGs
ESG and SDGs To work on setting quantitative goals and strengthening the action plans Materiality to be Value created by our business addressed and key (Value Creation in Core Business) categories Realize a sustainable society and responding to society’s needs —Making Life More Colorful— increase co
Slide 36: ESGs and SDGs
ESGs and SDGs Materiality to be addressed Products and Environment Addiction People Governance Services ⚫ Develop innovative ⚫ In the process of ⚫ Enhance Job products Points of studying the ⚫ Mitigate and Satisfaction ⚫ Improve the quality ⚫ Reinforce Corporate initiatives financial impact prevent
Slide 37: Strengthening of Governance, etc.
Strengthening of Governance, etc. ✓ Structuring Board of Directors and Audit & Supervisory Board with high independency and diversification 【Management structure】 Current As of June 24, 2021 (*) Audit & Supervisory Audit & Supervisory Board of Directors Board of Directors Board Board Number of membe
Slide 38: Medium to Long-Term Map
Medium to Long-Term Map Beyond the Status Quo -Breaking the Current Situation and Becoming a Sustainable Company- ~FY24/3 ~FY30/3 Proactive investment (Consumer area) Global Leading Entertainment Making existing IPs into global brand Contents Provider Creation of Super Game Creation of Hits × Busine
Slide 39: https://www.segasammy.co.jp/
https://www.segasammy.co.jp/ 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 Commis

Sega Sammy Holdings — Investor Presentation (May 2021) on 6ix

Sega Sammy — Investor Presentation (May 2021)

Slide 1: New Medium-Term Plan (FY2022/3-FY2024/3)

Slide 2: Long-term vision

Slide 3: Beyond the Status Quo

Slide 4: New Medium-Term Plan: Management Policies and KPIs

Slide 5: New Medium-Term Plan: Per segment breakdown

Slide 6: New Medium-Term Plan: Strategic Frameworks

Slide 7: Entertainment Contents Business Consumer Area

Slide 8: To be a Global Leading Contents Provider

Slide 9: Market Size and Growth Potential

Slide 10: Expansion of Platformers

Slide 11: Strategic Portfolio: Key strategies

Slide 12: Strategic Portfolio: Earnings

Slide 13: Strategy 1: Making Existing IPs into Global Brand

Slide 14: Strategy 1 Example: Expand sales areas with simultaneous launch

Slide 15: Strategy 1 Example: Expansion of Sonic brand recognition

Slide 16: Strategy 2: Creation of Super Game

Slide 17: Utilization of IP Assets

Slide 18: Utilization of IP Assets

Slide 19: Pachislot and Pachinko Machines Business

Slide 20: Long-Term Objectives: Pachislot and Pachinko

Slide 21: Market Environment

Slide 22: Sales Share

Slide 23: Utilization Share

Slide 24: Creation of Hits

Slide 25: Improvement of Business Efficiency

Slide 26: About ZEEG

Slide 27: Resort Business

Slide 28: Our Aim for IR (Integrated Resort)

Slide 29: Reference: New Medium-Term Plan (Trend of Operating Income)

Slide 30: Financial Strategy, Others

Slide 31: To Maximize the Corporate Value (~FY2026/3)

Slide 32: Concept of Investment in Growth and Shareholder Return

Slide 33: Concept of Optimal Capital Structure

Slide 34: Basic Policies on Shareholder Return

Slide 35: ESG and SDGs

Slide 36: ESGs and SDGs

Slide 37: Strengthening of Governance, etc.

Slide 38: Medium to Long-Term Map

Slide 39: https://www.segasammy.co.jp/