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Fiscal 2018 Business Report

Key insights

6 takeaways

01
SEGA SAMMY HOLDINGS experienced a significant financial downturn in fiscal 2018, with consolidated net sales falling 12% to ¥323.6 billion and operating income dropping 40% to ¥17.7 billion.See it on page 6
02
The Pachislot and Pachinko Machine Business, a core revenue driver, suffered a 29% decline in net sales and a 55% drop in operating income due to regulatory-driven product release delays.See it on page 6
03
The Entertainment Contents Business provided a stable offset to overall losses, recording a 1% increase in net sales and a 33% rise in operating income, bolstered by the success of titles like Persona 5.See it on page 2
04
The Resort Business segment recorded an operating loss of ¥2.5 billion for the fiscal year, reflecting ongoing capital expenditures for the PARADISE CITY integrated resort in South Korea.See it on page 6
05
To meet 'Road to 2020' targets of a 15% operating margin and 5% ROA, the company is prioritizing the rollout of regulation-compliant pachislot machines and the expansion of its digital gaming portfolio.See it on page 8
06
Despite the decline in profitability, the company maintained shareholder returns with a planned full-year dividend of ¥40 per share for fiscal 2018.See it on page 4

Summary

The fiscal 2018 business report for SEGA SAMMY HOLDINGS INC. outlines the company’s financial performance for the period spanning April 1, 2017, to March 31, 2018. The primary objective of the report is to communicate the results of the first year of the "Road to 2020" medium-term management plan, which focuses on improving profit margins, enhancing capital efficiency, and optimizing management resource allocation to drive long-term corporate value.

Financial results for the fiscal year reflected a challenging environment, with consolidated net sales declining 12% year-on-year to ¥323.6 billion and operating income falling 40% to ¥17.7 billion. The Pachislot and Pachinko Machine Business, a core segment, experienced a 29% drop in net sales and a 55% decline in operating income, largely due to the postponement of product releases following regulatory revisions in February 2018. Conversely, the Entertainment Contents Business demonstrated resilience, achieving a 1% increase in net sales and a 33% rise in operating income, supported by strong performance in the packaged game sector, including titles like Persona 5. The Resort Business recorded an operating loss of ¥2.5 billion, attributed to prior investments in integrated resort development.

To achieve the "Road to 2020" targets—specifically an operating income margin of at least 15% and an ROA of at least 5%—the company is prioritizing the launch of new, regulation-compliant pachislot machines and the expansion of its digital game portfolio. Strategic initiatives include the continued development of the PARADISE CITY integrated resort in South Korea and the consolidation of group offices in Tokyo to enhance operational efficiency. The company maintains a commitment to shareholder returns, planning a full-year dividend of ¥40 per share for fiscal 2018.