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Sega Sammy FY2021 Business Report: Interim

Key insights

6 takeaways

01
Sega Sammy reported a 33.4% year-on-year decline in net sales to ¥110.2 billion and an operating loss of ¥3.0 billion for the first half of FY2021 ending September 30, 2020.See it on page 5
02
The Entertainment Contents segment proved resilient, with ordinary income rising 31.3% to ¥16.8 billion despite a 16.2% decline in segment sales to ¥97.0 billion.See it on page 2
03
The Pachislot and Pachinko Machines business saw a 75.8% sales decline to ¥10.7 billion, while the Resort business dropped 60.0% to ¥2.2 billion due to pandemic-related restrictions.See it on page 2
04
Management initiated structural reforms including a voluntary early retirement program and the divestment of amusement center operations to reduce fixed costs.See it on page 8
05
The company revised its full-year forecast to ¥283.0 billion in net sales and an ordinary loss of ¥5.0 billion.See it on page 7
06
Interim dividends were reduced to ¥10 per share as the company prioritizes liquidity and long-term sustainability amid ongoing fiscal strain.See it on page 3

Summary

The Sega Sammy FY2021 Interim Business Report outlines the company’s financial performance and strategic response to the global COVID-19 pandemic for the period spanning April 1, 2020, to September 30, 2020. Faced with significant operational disruptions across its core segments, the company reports a 33.4% year-on-year decline in net sales to ¥110.2 billion and an operating loss of ¥3.0 billion. In response to these challenges, management has initiated comprehensive structural reforms, including the withdrawal from amusement center operations and a voluntary early retirement program, to stabilize the business and ensure long-term sustainability.

The report details varied performance across three primary business segments. The Pachislot and Pachinko Machines business experienced a sharp 75.8% decline in sales, totaling ¥10.7 billion, due to reduced demand and regulatory shifts. The Resort business similarly struggled, recording a 60.0% drop in sales to ¥2.2 billion as travel restrictions and facility closures impacted operations. Conversely, the Entertainment Contents business demonstrated relative resilience; while sales decreased by 16.2% to ¥97.0 billion, ordinary income rose by 31.3% to ¥16.8 billion, bolstered by strong digital game sales and the success of titles like Persona 5 Royal.

Looking ahead, the company has revised its full-year forecast, projecting net sales of ¥283.0 billion and an ordinary loss of ¥5.0 billion. Despite the current fiscal strain, which led to a reduction in the interim dividend to ¥10 per share, the organization remains focused on leveraging its intellectual property and digital growth to drive a swift recovery. By streamlining fixed costs and pivoting toward a more agile organizational framework, the company aims to navigate the ongoing uncertainty of the pandemic and return to a path of sustainable growth.