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Sega Sammy Holdings Integrated Report 2024

Key insights

6 takeaways

01
Sega Sammy aims to achieve a three-year cumulative adjusted EBITDA of over ¥230 billion and an average return on equity exceeding 10% under its 'Welcome to the Next Level!' plan for fiscal years 2025–2027.See it on page 19
02
Fiscal year 2024 financial performance showed strong growth, with net sales rising 20.1% to ¥467.8 billion and operating income increasing 21.6% to ¥56.8 billion, driven primarily by a recovery in the Pachislot and Pachinko segment.See it on page 46
03
The company is allocating over ¥120 billion for development and ¥100 billion for strategic M&A, following recent acquisitions like Rovio and GAN and the divestment of its resort business.See it on page 17
04
Management has committed to a shareholder return policy of at least a 3% dividend on equity or a 50% total return ratio to align with long-term value creation.See it on page 17
05
Strategic growth is centered on global transmedia expansion for key intellectual properties, specifically Sonic the Hedgehog and Persona.See it on page 20
06
The company has transitioned to a board structure with a majority of independent external directors and implemented performance-based stock compensation to improve corporate governance.See it on page 39

Summary

Sega Sammy Holdings’ 2024 integrated report outlines the "Welcome to the Next Level!" medium-term plan, a strategic roadmap spanning fiscal years 2025 through 2027. The primary thesis centers on maximizing corporate value by balancing the stable cash flows of the Pachislot and Pachinko business with the high-growth potential of the Entertainment Contents and newly established Gaming segments. To achieve this, the company is prioritizing global IP expansion through transmedia initiatives—leveraging franchises like Sonic the Hedgehog and Persona—while streamlining its portfolio through divestments, such as the sale of its resort business, and strategic acquisitions like Rovio and GAN.

Financial performance for fiscal year 2024 demonstrated strong momentum, with net sales rising 20.1% to ¥467.8 billion and operating income increasing 21.6% to ¥56.8 billion. This growth was largely propelled by a robust recovery in the Pachislot and Pachinko segment, which offset structural reform costs and weaker performance in European studios. Looking ahead, the company has set a three-year cumulative adjusted EBITDA target of over ¥230 billion and aims for an average return on equity exceeding 10%. To support these objectives, management has committed to significant capital allocation, including over ¥120 billion for development and ¥100 billion for strategic M&A, while maintaining a shareholder return policy of at least 3% dividend on equity or a 50% total return ratio.

Governance and human capital remain central to this transformation. The company has transitioned to a board structure with a majority of independent external directors and implemented a performance-based stock compensation model to align executive interests with long-term shareholder value. Furthermore, the organization is actively addressing sustainability through TCFD-aligned climate disclosures and industry-wide research into gambling addiction. By integrating these governance reforms with a focus on global talent development and operational efficiency, the company aims to solidify its position as a sustainable, innovation-driven leader in the global entertainment market.