With respect to our current Medium-Term Plan, we announced that we expect to fall short of our targets in FY2027/3, the final year of the plan. Specifically, we expect to fall short of our key performance targets of cumulative adjusted EBITDA of more than 230.0 billion yen over the three-year period and an average ROE of more than 10% over the same period.

For the Entertainment Contents Business, while we achieved results such as improvement in development capabilities centered on Japan studios and growth of the licensing-out business, challenges remain, including the “sales capabilities” of Full Game, the underperformance of GaaS (F2P) titles for the global market, as well as the need for Rovio’s profitability improvement. In light of these circumstances, we are first transforming our Full Game sales approach. We have already begun reviewing our marketing and sales strategies, as well as our organizations and business processes, and are advancing the establishment of a framework that enables data-driven decision-making. Regarding the GaaS business, we have reviewed its strategic positioning and will lower the investment weighting of the business within our portfolio. Going forward, we will further focus on the development of Full Game centered on our mainstay IPs, which will serve as the pillars of our mid- to long-term growth. On the other hand, we will continue our GaaS initiatives and further strengthen collaboration between SEGA and Rovio. We will also seek to return Rovio to growth through Transmedia initiatives centered on the movie and the expansion of licensing and merchandising, in addition to the　steady advancement of operational improvements for existing titles. Furthermore, we plan to launch four mainstay new titles in FY2027/3. Through these initiatives, we will drive further growth in the Entertainment Contents Business.

Regarding the Pachislot & Pachinko Machines Business, we are generating steady profits through the creation of hit titles.　For FY2027/3, we expect a decline in both sales and profits due to reactionary decline from fewer mainstay titles compared with the previous fiscal year and increase in costs mainly due to rising parts costs. However, we plan to launch our mainstay titles and several IP titles adapted for the first time on pachislot & pachinko machines and accelerate the full-scale rollout of unit sales of our new pachislot cabinet (reel-exchangeable cabinet). While there are concerns regarding parts supply, the number of parts required for reel unit production is limited, which we believe will help mitigate the impact.

In the Gaming Business, while our existing businesses continued to deliver steady growth, improving the profitability of the two acquired companies remains a key priority. We expect gaming machine sales and PARADISE SEGASAMMY, which are our existing businesses, to continue contributing to earnings. However, due to upfront investments aimed at building a foundation for growth, we expect a larger operating loss in the current fiscal year. Regarding GAN and Stakelogic, whose acquisition has completed, we are proceeding with their business revitalization programs and aiming to achieve profitability at the ordinary income level during the next medium-term plan period. At the same time, we will expand the provision of B2B solutions, including social casino and sports betting, by leveraging the technologies and content of the two acquired companies, as well as the customer base of SEGA SAMMY CREATION.

With respect to “Human Resources,” one of our materiality themes, we have achieved our 2030 targets ahead of schedule in three of our four key indicators: “development of culturally diverse human resources”, “career development for women”, and “improvement of the work environment”. We will continue to strengthen our human resources by pursuing our target for development of core human resources and further advancing our other key initiatives, thereby fostering the human capital that supports the sustainable creation of captivating experiences.

We will continue to create captivating experiences by maximizing the strengths of the Group and, in doing so, pursue the long-term and sustainable maximization of corporate value.

SEGA SAMMY HOLDINGS (the “Company”) is expanding TSR (Total Shareholder Return) by expanding equity spread and implementing proactive shareholder returns based on a management system focused on capital efficiency to maximize corporate value.

The three key components for increasing equity spread are “Growth of profit,” “improvement of asset efficiency,” and “maintaining optical capital structure.” First, we aim for “Growth of profit” by increasing the business efficiency of each of our Group’s core businesses. In the Entertainment Contents Business, specifically in the Consumer area, we aim to establish a structure for stable profit growth as well as implement business investments for business growth and creating new profit opportunities to respond to changes in the environment and continue to expand profit. In the Pachislot & Pachinko Machines Business, we will build a structure that creates stable earnings. We will achieve this by launching competitive products that adapt to changes in the regulatory environment to expand market share and improve business efficiency. Regarding ” improvement of asset efficiency,” we are introducing ROIC and monitoring indicators for each business which enable each business division to realize management that is conscious of improving asset efficiency and profitability. We plan to realize “maintaining optical capital structure” through several measures including reduction of WACC through an optimal capital structure, utilization of debt financing to procure funds for growth business investments, and reduction of long-term risks, etc. by strengthening ESG.

Regarding capital allocation, we planned an investment frame of 250.0 billion yen during the Medium-term Plan (from FY2025/3 to FY2027/3). This frame included development investment in the Consumer area and strategic investments, including M&A mainly targeting the Consumer area and Gaming Business and we have been proceeding with these investments. However, we have revised our capital allocation policy considering the recent situation and decided not to conduct large-scale M&A for the time being. Furthermore, we have decided to reallocate funds to expand working capital as the business scale grows and to acquire treasury stocks.

We will continue to execute financial strategies that meet the expectations of our investors to improve corporate value.