Sega Sammy FY 2011 3rd Quarter Results Presentation

Key insights

7 takeaways

01
Sega Sammy's Q3 FY2011 (fiscal year ending March 2011) consolidated net sales reached 310.1 billion yen, with operating income of 62.9 billion yen and net income of 36.8 billion yen, all up year-on-year.See it on page 1
02
The Pachislot and Pachinko segment remains the primary revenue driver, with operating income rising 103% to 54.6 billion yen, led by strong Pachislot unit sales growth.See it on page 3
03
Pachinko unit sales declined, partly due to a voluntary restraint on unit replacements during the APEC summit.See it on page 3
04
The Amusement Machine Sales segment grew in both sales and profit, supported by trading card game titles and a revenue-sharing model.See it on page 3
05
The Consumer Business segment's sales fell, but profitability improved on strong domestic software sales, offsetting weaker overseas performance.See it on page 3
06
The Amusement Center Operations segment returned to profitability, with domestic same-store sales in line with the prior year.See it on page 23
07
Sega Sammy converted Sammy NetWorks, SEGA TOYS, and TMS Entertainment into wholly owned subsidiaries, cancelled 17 million treasury shares, and launched a share buyback program.See it on page 4

Summary

Sega Sammy Holdings’ financial results for the third quarter of the fiscal year ending March 2011 demonstrate a period of significant growth in both sales and profitability. The company reported consolidated net sales of 310.1 billion yen, operating income of 62.9 billion yen, and net income of 36.8 billion yen. These figures represent a year-on-year increase, driven largely by strong performance in the Pachislot and Pachinko machine segment, which remains the company’s primary revenue driver.

The Pachislot and Pachinko segment saw a substantial rise in operating income to 54.6 billion yen, a 103% increase compared to the previous year. While Pachislot unit sales grew significantly, Pachinko unit sales experienced a decline, partially attributed to a voluntary restraint period for replacing units during the APEC summit. Elsewhere, the Amusement Machine Sales segment reported increased sales and profits, bolstered by the success of trading card game titles and a revenue-sharing model. Although the Consumer Business segment saw a decrease in overall sales, it achieved higher profitability, supported by strong domestic software sales despite weaker performance in overseas markets. The Amusement Center Operations segment returned to profitability, with domestic same-store sales performing at levels consistent with the prior year.

During this period, the company executed several strategic corporate actions, including the conversion of Sammy NetWorks, SEGA TOYS, and TMS Entertainment into wholly owned subsidiaries. Additionally, the company engaged in the cancellation of 17 million treasury shares and initiated a share buyback program. These results reflect a robust operational recovery and a focus on consolidating core business segments to drive long-term shareholder value.