Sega Sammy Holdings: Appendix of Consolidated Financial Statements (6 Months Ended September 30, 2017)

Key insights

6 takeaways

01
Sega Sammy reported total sales of 194.7 billion JPY for the six months ending September 30, 2017, a 15% year-over-year increase, with operating income rising 75% to 26.8 billion JPY.See it on page 1
02
The Pachislot and Pachinko segment was the primary growth driver, with sales increasing 36% to 88.3 billion JPY and operating income more than doubling to 21.4 billion JPY.See it on page 2
03
Entertainment Contents sales grew 4% to 101.5 billion JPY, bolstered by a 147% increase in packaged game unit sales in North American and European markets.See it on page 3
04
The digital games division underperformed, experiencing a 16% decline in sales and a 47% drop in operating income compared to the previous year.See it on page 3
05
The Resort business remained unprofitable, reporting an operating loss of 1.2 billion JPY despite a 20% sales increase at Phoenix Resort.See it on page 5
06
Management projects a full-year operating income of 20.0 billion JPY, signaling a cautious outlook due to anticipated market volatility and strategic investments.See it on page 1

Summary

Sega Sammy Holdings’ consolidated financial results for the six-month period ending September 30, 2017, reflect a period of growth in sales alongside significant shifts in segment profitability. The company reported total sales of 194.7 billion JPY, representing a 15% increase compared to the same period in the previous fiscal year. Despite this top-line growth, operating income reached 26.8 billion JPY, a 75% increase year-over-year, driven largely by a strong performance in the Pachislot and Pachinko machine business.

The Pachislot and Pachinko segment served as a primary growth engine, with sales rising 36% to 88.3 billion JPY and operating income more than doubling to 21.4 billion JPY. This performance was supported by a 58% increase in Pachinko unit sales, which offset a slight decline in Pachislot unit volume. Conversely, the Entertainment Contents business saw more modest growth, with sales increasing 4% to 101.5 billion JPY. Within this segment, packaged games performed well, particularly in North American and European markets, where unit sales rose 147%. However, the digital games division faced headwinds, experiencing a 16% decline in sales and a 47% drop in operating income compared to the prior year.

The Resort business remained a loss-making segment, reporting an operating loss of 1.2 billion JPY for the first half of the fiscal year. While Phoenix Resort saw a 20% increase in sales and a 14% rise in facility users, the overall segment continues to struggle with profitability. Looking ahead, the company maintains a cautious outlook for the full fiscal year, projecting a decrease in operating income to 20.0 billion JPY, reflecting anticipated market volatility and strategic investments across its core business segments.