Sega Sammy Holdings Consolidated Financial Statements: Year Ended March 31, 2014

Key insights

6 takeaways

01
Sega Sammy Holdings reported a 17.6% increase in net sales to 378.0 billion yen and a 100% increase in operating income to 38.5 billion yen for the fiscal year ending March 31, 2014.See it on page 1
02
The Pachislot and Pachinko segment served as the primary financial driver, generating 45.3 billion yen in segment income to offset losses in amusement machine sales and miscellaneous divisions.See it on page 24
03
Net income fell 8.2% to 30.7 billion yen, primarily due to the absence of tax benefits from the previous year’s liquidation of overseas subsidiaries.See it on page 4
04
The company maintains a strong liquidity position with 202.7 billion yen in cash and cash equivalents and an equity ratio of 63.2%.See it on page 8
05
Management projects a 19% increase in net sales for the 2015 fiscal year but anticipates a decline in operating and net income due to planned structural reforms.See it on page 7
06
Capital generated from operating activities and the sale of investment securities is being prioritized to fund a strategic transition toward digital gaming and resort development.See it on page 10

Summary

Sega Sammy Holdings achieved robust financial growth during the fiscal year ending March 31, 2014, characterized by a 17.6 percent increase in net sales to 378.0 billion yen and a doubling of operating income to 38.5 billion yen. This performance was primarily propelled by the Pachislot and Pachinko segment, which generated 45.3 billion yen in segment income, effectively offsetting underperformance in the amusement machine sales and miscellaneous business divisions. While net income experienced an 8.2 percent decline to 30.7 billion yen—largely attributable to the absence of prior-year tax benefits associated with the liquidation of overseas subsidiaries—the company maintained a strong financial foundation.

The organization’s balance sheet remained healthy, with total assets reaching 542.9 billion yen and an equity ratio of 63.2 percent. A significant rise in net cash provided by operating activities to 75.2 billion yen, bolstered by the strategic sale of investment securities, resulted in a year-end cash and cash equivalents balance of 202.7 billion yen. These liquidity levels provide the necessary capital to navigate ongoing volatility within the core pachinko and amusement sectors while facilitating a transition toward digital gaming and resort development.

Looking toward the future, the company anticipates a 19 percent increase in net sales for the 2015 fiscal year. However, management expects a subsequent decline in operating and net income as the group initiates comprehensive structural reforms. These measures are designed to address shifting market conditions and long-term sustainability. By prioritizing operational restructuring alongside strategic diversification, the company aims to stabilize its performance across its global entertainment portfolio despite the anticipated short-term financial pressures associated with these organizational changes.