“Multi Stage Payout-Ratio” to Pachinko Machines
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FY Ended March 2018 Appendix May 11th, 2018 [Disclaimer] The contents of this material and comments made during the questions and answers etc of this briefing session are the judgment and projections of the Company’s management based on currently available information. These contents involve risk and uncertainty and the actual results may differ materially from these contents/comments. © SEGA SAMMY HOLDINGS INC. All Rights Reserved. Consolidated Income Statements (Summary) (JPY Billion) 2017/3 2018/3 2019/3 Through Through Through Through Through Through Forecast 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Sales 70.6 169.5 285.7 366.9 107.2 194.7 260.8 323.6 390.0 Pachislot and Pachinko Machines 21.2 64.9 119.7 148.2 54.9 88.3 95.4 105.6 122.0 Entertainment Contents 46.7 97.8 155.4 205.7 50.2 101.5 157.9 208.0 258.0 Resort 2.6 6.7 10.5 13.0 2.0 4.7 7.3 9.9 10.0 Operating Income 3.0 15.3 35.0 29.5 16.6 26.8 25.6 17.7 21.0 Pachislot and Pachinko Machines 0.3 10.6 25.8 26.3 15.1 21.4 15.1 11.9 18.5 Entertainment Contents 4.9 9.1 15.3 11.1 3.7 10.1 17.2 14.8 13.5 Resort -0.8 -1.3 -1.8 -2.2 -0.7 -1.2 -1.8 -2.5 -3.0 Other / Elimination -1.4 -3.1 -4.3 -5.7 -1.5 -3.4 -4.9 -6.5 -8.0 Operating Income Margin 4.2% 9.0% 12.3% 8.0% 15.5% 13.8% 9.8% 5.5% 5.4% Ordinary Income 2.9 15.4 35.3 28.5 16.2 25.2 24.3 14.5 16.0 Extraordinary Gain 1.5 11.9 12.8 13.3 0.5 0.8 0.8 0.9 1.0 Extraordinary Loss 0.1 0.3 5.2 8.1 0.3 0.4 0.7 3.1 - Income before income taxes 4.3 27.1 43.0 33.7 16.4 25.6 24.4 12.4 17.0 Profit attributable to owners of parent 4.1 24.2 36.5 27.6 11.5 17.7 13.7 8.9 12.0 Dividends per share (JPY) - 20.00 20.00 40.00 - 20.00 20.00 40.00 40.00 Earnings per share (JPY) 17.54 103.47 155.84 117.79 49.22 75.78 58.68 38.10 51.20 Net Assets per share (JPY) 1,215.03 1,292.06 1,356.30 1,313.06 1,353.20 1,380.42 1,339.46 1,313.90 - - 2 - © SEGA SAMMY HOLDINGS INC. All Rights Reserved. Costs and Expenses (JPY Billion) 2017/3 2018/3 2019/3 Through Through Through Through Through Through Forecast 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q R&D Expense / Content 13.9 31.7 48.8 67.1 15.3 30.7 45.5 62.0 73.3 Production Expense Pachislot and Pachinko Machines 4.5 9.3 14.1 18.8 4.5 9.7 13.8 17.3 18.4 Entertainment Contents 9.3 22.2 34.6 48.1 10.8 21.1 31.7 44.9 54.9 Resort 0.0 0.1 0.1 0.2 0.0 0.0 0.0 0.1 0.0 Other / Elimination 0.1 0.1 0.0 0.0 0.0 -0.1 0.0 -0.3 0.0 Cap-ex 6.1 13.8 20.8 27.0 5.0 10.3 16.2 24.1 32.1 Pachislot and Pachinko Machines 1.4 3.0 4.3 5.8 1.0 1.9 2.7 3.6 7.6 Entertainment Contents 3.3 8.0 11.9 16.6 3.6 7.3 11.8 17.2 20.4 Resort 1.2 2.7 4.5 4.5 0.3 1.0 1.5 1.9 0.5 Other / Elimination 0.2 0.1 0.1 0.1 0.1 0.1 0.2 1.4 3.6 Depreciation 3.9 7.6 12.0 16.3 4.2 8.2 12.2 16.2 14.8 Pachislot and Pachinko Machines 1.5 3.0 4.4 5.8 1.5 2.8 4.1 5.3 4.1 Entertainment Contents 2.0 3.7 6.2 8.7 2.2 4.5 6.7 9.0 8.7 Resort 0.2 0.5 0.8 1.1 0.2 0.5 0.7 1.0 1.2 Other / Elimination 0.2 0.4 0.6 0.7 0.3 0.4 0.7 0.9 0.8 Advertising 3.1 7.6 11.2 14.8 3.2 7.8 11.7 15.4 22.1 Pachislot and Pachinko Machines 0.5 1.2 1.7 2.1 0.4 1.1 1.5 1.9 2.8 Entertainment Contents 2.3 5.0 7.9 10.7 2.5 5.4 8.6 11.8 17.4 Resort 0.1 0.3 0.5 0.5 0.1 0.2 0.3 0.4 0.3 Other / Elimination 0.2 1.1 1.1 1.5 0.2 1.1 1.3 1.3 1.6 - 3 - © SEGA SAMMY HOLDINGS INC. All Rights Reserved. Consolidated Balance Sheet (Summary) (JPY billion) 【 Assets 】 【 Liabilities and Net Assets 】 As of end of As of end of As of end of As of end of Account Change Account Change March 2017 March 2018 March 2017 March 2018 Cash and Deposits 137.4 157.8 +20.4 Accounts Payable 45.6 21.7 -23.9 Accounts Receivable 44.5 29.3 -15.2 Corporate Bonds 19.5 10.0 -9.5 Securities 65.2 24.6 -40.6 Short Term Borrowings 6.3 15.8 +9.5 Inventories 47.4 40.5 -6.9 Other 41.1 36.9 -4.2 Other 29.6 25.1 -4.5 Total Current Liabilities 112.5 84.4 -28.1 Total Current Assets 324.1 277.3 -46.8 Corporate Bonds 32.5 22.5 -10.0 Tangible Fixed Assets 81.6 78.1 -3.5 Long Term Debt 44.5 38.6 -5.9 Intangible Fixed Assets 22.1 23.4 +1.3 Other 20.5 17.4 -3.1 Investment Securities 69.8 70.2 +0.4 Total Noncurrent Liabilities 97.5 78.5 -19.0 Other 23.9 24.4 +0.5 Total Liabilities 210.1 163.0 -47.1 Shareholders Equity 300.3 299.6 -0.7 Total accumulated other comprehensive income 7.4 8.2 +0.8 Warrants 0.3 0.8 +0.5 Non-controlling intesrests 3.4 1.6 -1.8 Total Noncurrent Assets 197.4 196.1 -1.3 Total Net Assets 311.4 310.4 -1.0 Total Assets 521.5 473.5 -48.0 Total Liabilities and Net Assets 521.5 473.5 -48.0 - 4 - © SEGA SAMMY HOLDINGS INC. All Rights Reserved. Relocation Expenses (For reference) One-off expenses of relocation Impact (FY Ending March 2019) (JPY Billion) Operating Income one-off expenses of Operating Income (Before consideration) relocation (After consideration) Total 28.5 -7.5 21.0 Pachislot and Pachinko 20.1 -1.6 18.5 Machines Entertainment Contents 18.5 -5.0 13.5 Resort -3.0 0.0 -3.0 Other / Elimination -7.1 -0.9 -8.0 (For reference) One-off expenses of relocation (JPY Billion) 2018/3 2019/3 Total -2.4 -7.5 Pachislot and Pachinko -0.8 -1.6 Machines Entertainment Contents -1.4 -5.0 Resort 0.0 0.0 Other / Elimination -0.2 -0.9 - 5 - © SEGA SAMMY HOLDINGS INC. All Rights Reserved. Segment Results: Pachislot and Pachinko Machines (JPY Billion) 2017/3 2018/3 2019/3 Through Through Through Through Through Through Forecast 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Sales 21.2 64.9 119.7 148.2 54.9 88.3 95.4 105.6 122.0 Pachislot 11.4 31.8 70.0 86.2 10.2 32.3 32.4 36.0 39.1 Pachinko 6.3 26.4 39.6 48.3 41.1 48.8 52.2 55.3 71.2 Other / Elimination 3.5 6.7 10.1 13.7 3.6 7.2 10.8 14.3 11.7 Operating Income 0.3 10.6 25.8 26.3 15.1 21.4 15.1 11.9 18.5 Operating Income Margin 1.4% 16.3% 21.6% 17.7% 27.5% 24.2% 15.8% 11.3% 15.2% Pachislot Number of Titles 2 titles 3 titles 6 titles 10 titles 3 titles 8 titles 8 titles 9 titles 9 titles Unit Sales(unit) 29,902 81,895 169,827 215,736 25,440 75,380 75,590 85,041 103,000 Pachinko Number of Titles 1 title 3 titles 6 titles 9 titles 2 titles 4 titles 5 titles 5 titles 9 titles Unit Sales(unit) 20,525 75,542 111,104 138,321 97,499 119,312 129,778 140,013 201,000 Board + Frame 13,327 68,175 101,440 115,227 83,178 92,344 95,912 97,655 94,500 Board 7,198 7,367 9,664 23,094 14,321 26,968 33,866 42,358 106,500 - 6 - © SEGA SAMMY HOLDINGS INC. All Rights Reserved. Segment Results: Pachislot and Pachinko Machines 2015/3 2016/3 2017/3 2018/3 2019/3 Results Results Results Estimate Forecast Pachislot Market unit sales(million) 1.23 0.96 0.88 0.74 0.50 Market install base(million) 1.64 1.66 1.69 1.68 1.66 Turnover(Sales/Installation) 0.75 0.58 0.52 0.44 0.30 Sega Sammy’s Unit Sales(Thousands) 207 142 215 85 103 Pachinko Market unit sales(million) 2.01 1.88 1.56 1.42 1.14 Market install base(million) 2.95 2.91 2.83 2.74 2.67 Turnover(Sales/Installation) 0.68 0.65 0.55 0.52 0.43 Sega Sammy’s Unit Sales(Thousands) 241 199 138 140 201 Source: National Police Agency, Yano Research Institute Ltd., *The data for 18/03 and 19/03, which have not been publicized yet, are our estimates and forecasts.