Sega Sammy Holdings Inc. · TSE:6460

Sega Sammy — Q1 FY2021/3 Earnings Presentation

39 slides from Sega Sammy's earnings presentation, Aug 5, 2020

  1. Slide 1: Fiscal Year Ending March 2021 1Q Results Presentation

    Fiscal Year Ending March 2021 1Q Results Presentation August 5, 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,

  2. Slide 2: 1. FY Ending March 2021 1Q Results / Overview of Full-Year Forecast

    1. FY Ending March 2021 1Q Results / Overview of Full-Year Forecast

  3. Slide 3: Changes in segment classifications and others

    Changes in segment classifications and others The following changes have been made from the fiscal year ending March 2021.  “ Operating income “ to ” Ordinary income "  The Company has changed its method of measuring segment income from "operating income" to "ordinary income," which is the profit

  4. Slide 4: FY ending March 2021 1Q Results, Full-Year Forecast Summary

    FY ending March 2021 1Q Results, Full-Year Forecast Summary (JPY Billion) 2020/3 2021/3 1Q Through 1Q Full Year FY2021/3 1Q Results 4Q Forecast Sales 72.7 366.5 48.3 277.0  Significant decline in sales YoY and recording of losses. Pachislot and Pachinko Machines 17.1 108.5 2.7 56.0 Entertainment Co

  5. Slide 5: Breakdown of Income (FY2021/3 1Q Results)

    Breakdown of Income (FY2021/3 1Q Results) (Unit: billion yen) Breakdown of non-operating income/losses and extraordinary -3.8 Operating Income income/losses Non-operating Income 0.6 0.6 Non-operating Income Dividends income 0.2 Non-operating Expenses Other 0.4 0.8 -4.0 Ordinary Income Non-operating

  6. Slide 6: Extraordinary Losses Associated with the impact of COVID-19

    Extraordinary Losses Associated with the impact of COVID-19  Common fixed expenses and other expenses incurred associated with the impacts of COVID-19 is recorded in extraordinary losses at 1Q. Extraordinary losses Breakdown of 2.5 billion yen extraordinary losses Pachislot and Pachinko Business 0.

  7. Slide 7: Consolidated Costs and Expenses

    Consolidated Costs and Expenses (Unit: billion yen) 2020/3 2021/3 Full Year Full Year Main factors for increase or decrease for FY2021/3 1Q 1Q Results Forecast R&D Expense / Content Expenses decrease as the numbers of new titles to be launched Production Expense 17.1 76.5 14.7 64.2 decreased from pr

  8. Slide 8: Consolidated Balance Sheet Summary

    Consolidated Balance Sheet Summary As of end of As of end of (Unit: billion yen) Change March 2020 June 2020 Total Current Assets 268.9 265.2 -3.7 Main factors Changes Cash and Deposits 159.0 157.0 -2.0 Notes and accounts receivable - trade 40.4 24.5 -15.9 Current Assets -3.7 5.3 0.2 -5.1 Short-term

  9. Slide 9: Liquidity of Funds

    Liquidity of Funds  The Company is securing 321.6 billion yen as liquidity which enables us to respond flexibly to funding demand, including working capital for existing business and strategic investments in the future. *As of the end of June 2020 Commitment line and unused lines of credit for over

  10. Slide 10: Entertainment Contents: Impacts of COVID-19

    Impacts of COVID-19 2021/3 1Q Full-year • Pachinko Halls suspended their operation under the state of emergency. • Expecting that the recovery of purchasing motivation of pachinko halls Pachinko Negative • Utilization of Pachinko halls declined due to temporary suspension but take a while as the dea

  11. Slide 11: Pachislot and Pachinko Machines Business

    Pachislot and Pachinko Machines Business (JPY Billion) 2020/3 2021/3 FY2021/3 1Q Results Through 1Q 1Q Full Year 4Q Forecast  Sales were mainly attributable to Sammy Networks, Sales 17.1 108.5 2.7 56.0 continuous sales from previous fiscal year and etc. Pachislot 7.0 54.1 0.2 19.7 Pachinko 5.4 37.4

  12. Slide 12: Machines Business: Major titles

    Pachislot and Pachinko Machines Business: Major titles In and after 2Q 開⽰ “P Psalms of Planets Eureka Seven “Pachislot Kaidoumokushiroku “Pachislot Shin Hokuto Muso” “P Shin Hokuto Muso Chapter 3” HI-EVOLUTION ZERO” kaiji numa” ©Buronson & Tetsuo Hara/NSP 1983, Approved No.KOM-620 ©2017 BONES/Projec

  13. Slide 13: Entertainment Contents Business

    Entertainment Contents Business FY2021/3 1Q Results (JPY Billion) 2020/3 2021/3 Through Full Year  Although recorded losses in Amusement Machine Sales 1Q 1Q 4Q Forecast and Amusement Center Operations area, profit increased Sales 53.0 247.6 45.1 214.0 due to strong performance in Consumer area. Con

  14. Slide 14: Consumer Area

    Consumer Area Sales (Unit: billion yen) Operating Income Operating Income Margin FY2021/3 1Q Results  Repeat sales performed strong centered in overseas market. Forecast  Offer titles to multiple platforms. • “A Total War Saga: TROY" → Scheduled to be released at Epic Games stores in August • “YAK

  15. Slide 15: Consumer Area (KPI)

    Consumer Area (KPI)  Sales by Business Model (JPY Billion) 2020/3 2021/3 Through Full Year 1Q 1Q 4Q Forecast Full Game 11.5 57.0 14.4 51.3 Japan 0.7 15.3 1.8 5.6 New titles 0.2 12.5 0.0 1.2 Repeat titles 0.5 2.7 1.7 4.4 Asia 0.8 5.3 1.3 4.7 New titles 0.4 3.5 0.7 2.0 Repeat titles 0.3 1.7 0.5 2.7 N

  16. Slide 16: Consumer Area: Major Titles

    Consumer Area: Major Titles 1Q In and after 2Q Full Game “Persona 4 The Golden” “A Total War Saga: TROY” “HUMANKINDTM” “Shin Megami Tensei Ⅲ “Shin Megami Tensei V” (PC version) © SEGA. Developed by The Creative © Amplitude Studios 2020. NOCTURNE HD REMASTER” ©ATLUS ©ATLUS. Assembly Limited. © SEGA.

  17. Slide 17: Amusement Machine Sales Area

    Amusement Machine Sales Area Sales (Unit: billion yen) Operating Income/Losses FY2021/3 1Q Results  Due to the temporary closure of amusement facilities and a decline in utilization, revenue from revenue sharing model and sales of amusement machines remained sluggish. Forecast  Focus on sales of r

  18. Slide 18: Amusement Center Operations Area

    Amusement Center Operations Area Sales (Unit: billion yen) FY2021/3 1Q Results Operating Income/Losses Operating Income Margin  Sales of existing stores were 27.4% YoY due to temporary closure, etc.  Personal expenses, rent, depreciation and other expenses of amusement facilities during temporary

  19. Slide 19: Animation / Toys Area

    Animation / Toys Area Sales (Unit: billion yen) Operating Income Operating Income Margin FY2021/3 1Q Results  Animation: Recorded sales from video production and allocated revenue.  Toys: Focus on sales of regular products. Forecast  Animation: Allocated revenue declines due to the postponement o

  20. Slide 20: Resort Business

    Resort Business (JPY Billion) 2020/3 2021/3 Through Full Year FY2021/3 1Q Results 1Q 1Q 4Q Forecast Sales 2.4 10.4 0.4 6.5  Significant decline in the number of users. Operating Income -0.8 -3.6 -1.7 -6.5 Non-operating income 0.1 0.2 0.0 0.0 • PHOENIX RESORT Non-operating expenses 0.9 1.9 0.3 6.0 O

  21. Slide 21: Resort Business (PARADISE SEGASAMMY)

    Resort Business (PARADISE SEGASAMMY) FY2021/3 1Q Results  Decline in the number of users • Number of casino users: 80% YoY Forecast  Expecting that the restriction of foreign visitors entering South Korea will not lift within this year.  Optimization of facility operation has been started. *PARAD

  22. Slide 22: Resort Business (PARADISE SEGASAMMY)

    Resort Business (PARADISE SEGASAMMY) Transition of Drop* amounts at PARADISE SEGASAMMY (KRW Million) April, 2017 Opening of Paradise City *Drop amounts: Purchased amount of chips by customers at the table *Calculation method was changed after Jan 2018 -22-

  23. Slide 23: 2. FY2021/3 Future Direction

    2. FY2021/3 Future Direction

  24. Slide 24: Machines Business

    Pachislot and Pachinko Machines Business  Utilization of pachinko halls is recovering trend after declaration of state of emergency was lifted.  Demand for replacement to new machines declined this fiscal year due to the impact of extension of the deadline for removal of previous regulation machin

  25. Slide 25: Market environment of Machines Business

    Market environment of Pachislot and Pachinko Machines Business (Transition of No. of pachinko halls and No. of installed units)  The number of pachinko halls is decreasing in the long-term trend but the impact of COVID-19 is not noticeable at the present. No. of nationwide pachinko halls and their

  26. Slide 26: Market Environment of Machines Business (utilization of pachinko halls)

    Market Environment of Pachislot and Pachinko Machines Business (Transition of utilization of pachinko halls)  Impact of COVID-19 is gradually stabilizing YoY comparison of average utilization rate of pachislot and pachinko Couldn’t compare Utilization rate is gradually the data during the state of

  27. Slide 27: Machines Business (removal schedules)

    Pachislot and Pachinko Machines Business (removal schedules)  Full-fledged removal timing moves to fiscal year ending Mar 2022 following the extension of the deadline for removal of previous regulation machines. (Unit: thousand units) Pachislot Pachinko FY2021/3 FY2022/3 FY2021/3 FY2022/3 435K unit

  28. Slide 28: Machines Business (Appendix 1)

    Pachislot and Pachinko Machines Business (Appendix 1: Overview of the extension of the deadline of previous regulation machines) Pachislot: Removal Rule May 20, Dec. 31, Jan. 31, Nov. 30, 2020 2020 2021 2021 1) Pachislot with high Approx. gambling aspects 100K units *Need to be removed by initial (*

  29. Slide 29: Machines Business (Appendix 2)

    Pachislot and Pachinko Machines Business (Appendix 2: Overview of the extension of the deadline of previous regulation machines) Pachinko: Removal Rule May 20, Dec. 31, Jan. 31, Nov. 30, 2020 2020 2021 2021 1) Pachislot with high Not gambling aspects applicable *Need to be removed by initial (*1) re

  30. Slide 30: Entertainment Contents Business Consumer Area

    Entertainment Contents Business Consumer Area  Profit increased significantly in Consumer area due to the spending from staying at home  Enhance the multi-platform and global roll-out  Aggressively expand as a growing area *Since FY2021/3, Digital Games area and Packaged Games area have been inte

  31. Slide 31: Consumer Area (Full Game)

    Consumer Area (Full Game)  Strong repeat sales in Europe and the North America and an increase in the ratio of download sales.  Sales of repeat sales in Europe and NA  Download sales ratio (Japan, Asia, Europe and NA) (Unit: billion yen) （*Figure of 2021/3 1Q is result） -31-

  32. Slide 32: Consumer Area (Full Game)

    Consumer Area (Full Game)  Both new titles and repeat sales of existing titles went strong  Unit sales of 2021/3 1Q results: 12,980K units (200% YoY)  Results of 1Q per series Series Unit sales Name of main titles (released month) Approx. “Total War: SHOGUN 2” (March, 2011) “Total War: WARHAMMER

  33. Slide 33: Consumer Area (F2P)

    Consumer Area (F2P)  New title, North American version of “PSO2” made a strong start  Breakdown of F2P sales (Unit: billion yen)  Major titles released on FY2020/3. 10.5 10.4 • "Fist of the North Star LEGENDS ReVIVE" • "Kemono Friends 3"  Major titles will be released on FY2021/3. • "PHANTASY ST

  34. Slide 34: Amusement Machine Sales and Amusement Center Operations

    Amusement Machine Sales and Amusement Center Operations  Although the market is currently in recovering trend, the impact of the COVID- 19 is expected to be prolonged.  Sales of existing stores of Amusement Center Operations area  Recovered nearly 70% recently. compared with the same month of the

  35. Slide 35: Resort Business

    Resort Business  Will struggle for this fiscal year as the timing when COVID-19 will be settled is difficult to predict.  PHOENIX RESORT  PARADISE SEGASAMMY Number of facilities users and YoY comparison Drop amount and YoY comparison (Users) (KRW Million)  Significant decrease in the number of u

  36. Slide 36: Establishment of the Structural Reform Committee

    To undertake the structural reforms Establishment of the Structural Reform Committee Chairman: Haruki Satomi  Pachislot and Pachinko machines, resorts and group-wide Haruki Satomi President & Group COO (Representative Director) of SEGA SAMMY HOLDINGS President and CEO (Representative Director) of S

  37. Slide 37: Direction of Structural Reform

    Direction of Structural Reform Reformation to a business structure that can sustainablly generate profit  Cost reductions for this fiscal year  To reduce the expenses approximately 3 billion yen YoY for group-wide (incorporated into the latest forecast) (*1)  Review of Balance Sheet  To review t

  38. Slide 38: Q&A

    3. Q&A SEGASammy -38-

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

    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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