Sega Sammy (6460) investor relations material

Executive summary

• Q3 results missed forecasts, with net sales for the nine months rising 4% year-over-year to ¥335.2B, but operating income fell 54.6% to ¥19.8B and a net loss of ¥16.8B was recorded due to significant impairment losses on Rovio and Stakelogic.

• Adjusted EBITDA dropped 93.6% year-over-year to ¥3.4B.

• Capital allocation policy was revised, suspending large-scale M&A and initiating a ¥20.0B share buyback.

Financial highlights

• Consolidated sales for Q3 YTD were ¥335.2B, up from ¥322.3B YoY; full-year sales forecast revised to ¥475.0B.

• Operating income for Q3 YTD was ¥19.8B, down from ¥43.7B YoY; full-year forecast revised to ¥53.0B.

• Profit attributable to owners was -¥16.8B for Q3 YTD, with a full-year forecast of ¥37.5B.

• Adjusted EBITDA for Q3 YTD was ¥3.4B, with a full-year forecast of ¥67.5B.

• Extraordinary losses for Q3 YTD were ¥36.2B, reflecting impairment charges.

• Gross profit decreased to ¥144.8B from ¥148.8B YoY, while SG&A expenses increased to ¥125.0B.

• Ordinary income declined 51.8% to ¥23.8B.

• Basic earnings per share fell to ¥(79.98) from ¥194.14 YoY.

• Comprehensive income dropped to ¥2.1B from ¥44.6B YoY.

Outlook and guidance

• Full-year net sales forecast revised to ¥490.0B, up 14.2% YoY, with operating income expected at ¥40.0B and a projected net loss of ¥13.0B.

• Dividend forecast for the year ending March 31, 2026, is ¥55.00 per share.

• Full-year operating results forecast revised downward, reflecting segment performance and impairment losses.

• Entertainment Contents outlook lowered due to weak Consumer area and Rovio; Animation expected to remain steady.

• Pachislot & Pachinko Machines forecast revised upward on strong title sales.

• Gaming Business forecast revised to include GAN and Stakelogic results and amortization.

• Large-scale M&A activities suspended; capital allocation policy revised to prioritize shareholder returns.