Sega Sammy Holdings: Consolidated Financial Statements 3 Months Ended June 30, 2010

Key insights

6 takeaways

01
Sega Sammy Holdings achieved a significant financial turnaround in Q1 FY2011 (3 months ended June 30, 2010), with net sales increasing 51.1% year-over-year to 91,340 million yen, returning to profitability with an operating income of 14,951 million yen and a net income of 7,036 million yen.See it on page 1
02
The Pachinko and Pachislot segment was the primary growth driver, generating 49,039 million yen in net sales and 15,133 million yen in operating income, driven by new title reception and cost reductions.See it on page 10
03
The Consumer Business segment remained unprofitable, recording an operating loss of 636 million yen despite a 15.4% increase in net sales to 20,859 million yen, primarily due to weak demand for home video game software in U.S. and European markets.See it on page 4
04
The Amusement Machine Sales segment recovered, posting 10,442 million yen in sales and 1,399 million yen in operating income, supported by revenue-sharing models and steady demand for established arcade titles.See it on page 4
05
The Amusement Center Operations segment saw declining sales due to sluggish personal consumption but managed a modest operating profit of 177 million yen.See it on page 4
06
Sega Sammy Holdings maintained a stable financial position with an equity ratio of 57.6% as of June 30, 2010.See it on page 1

Summary

Sega Sammy Holdings reported a significant financial turnaround for the first quarter of the fiscal year ending March 31, 2011, compared to the same period in the previous year. The company achieved consolidated net sales of 91,340 million yen, representing a 51.1% increase year-over-year. This growth facilitated a return to profitability, with an operating income of 14,951 million yen and a net income of 7,036 million yen, contrasting sharply with the operating and net losses recorded in the first quarter of 2009.

The Pachinko and Pachislot segment served as the primary driver of this performance, generating 49,039 million yen in net sales and 15,133 million yen in operating income. Strong market reception for new pachislot titles, combined with cost-reduction initiatives regarding component procurement and the reuse of liquid crystal displays, bolstered margins. The Amusement Machine Sales segment also saw recovery, posting 10,442 million yen in sales and 1,399 million yen in operating income, aided by the adoption of revenue-sharing models and steady demand for established arcade titles.

Conversely, the Consumer Business segment continued to face challenges, recording an operating loss of 636 million yen despite a 15.4% increase in net sales to 20,859 million yen. Weak demand in U.S. and European markets for home video game software offset solid performance in the toy and mobile content divisions. Meanwhile, the Amusement Center Operations segment experienced a decline in sales due to sluggish personal consumption, though it managed to return to a modest operating profit of 177 million yen. The company’s financial position remains stable, with an equity ratio of 57.6% as of June 30, 2010.