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Notice of Recording of an Extraordinary Losses (Impairment Losses) and Revision of Operating Results Forecast

(Translation)

Dear all,

Name of Company: SEGA SAMMY HOLDINGS INC.
Name of Representative: Haruki Satomi,
President and Group CEO, Representative Director
(Code No. 6460, Tokyo Stock Exchange Prime)
Further Inquiry: Genta Atobe,
Managing Director of Corporate Planning Division
(TEL: 03-6864-2400)

 

Notice of Recording of an Extraordinary Losses (Impairment Losses) and Revision of Operating Results Forecast

 

 

SEGA SAMMY HOLDINGS INC. (the “Company”) hereby notified that it has recognized extraordinary losses (impairment losses) for the third quarter of the fiscal year ending March 2026. At the same time, it has revised its full-year consolidated operating results forecast announced on May 12, 2025, as described below.

 

Description

 

1. Recording of extraordinary losses (impairment losses)

As part of our growth strategy in the Entertainment Contents Business, the Group welcomed Rovio Entertainment Ltd. (“Rovio”), a company with strong development and operational capabilities in the mobile game area, a sector with major growth potential, into the Group in September 2023, to accelerate its business expansion in this area.

 However, following Rovio’s integration into the Group, the business environment in the global mobile game market rapidly changed, with multiple major titles emerging within a short period, and competition for customer acquisition intensifying. Rovio found it difficult to advance its initially planned business development, and the profitability of this business has fallen below the initial forecast.

 Considering these circumstances, the Group reviewed Rovio’s business forecast and conducted an impairment test. This revealed that the recoverable amount related to Rovio significantly fell below its carrying amount. Consequently, impairment losses of approximately ¥31.3 billion on goodwill and other intangible assets were recognized in the consolidated financial results for the third quarter of the fiscal year ending March 2026. Additionally, in association with the recognition of impairment of other intangible assets written above, the Company recognized income taxes-deferred of approximately ¥0.9 billion resulting from the reversal of deferred tax liabilities.

 As a result of the above, the impact on the net loss attributable to owners of the parent recognized in the third quarter of the fiscal year ending March 2026 amounted to approximately ¥30.4 billion, derived from the impairment losses on goodwill and other intangible assets net of the impact of the recognition of an income taxes-deferred income tax resulting from the reversal of deferred tax liabilities.

 

 

2. Revisions to full-year consolidated operating results forecast for the fiscal year ending March 2026 (April 1, 2025 to March 31, 2026)

(Unit: million yen unless otherwise indicated)

	Net sales	Operating income	Ordinary income	Profit attributable to owners of parent	Adjusted EBITDA	Net income per share (Yen)
Previously announced forecast (A)	475,000	53,000	56,000	37,500	67,500	175.39
Revised forecast this time (B)	490,000	40,000	43,500	‐13,000	10,000	‐61.87
Amount of increase or decrease (B-A)	15,000	‐13,000	‐12,500	-50,500	-57,500	–
Rate of increase or decrease (%)	3.2%	‐24.5%	‐22.3%	–	-85.2%	–
(Reference) Operating results for the previous fiscal year (Fiscal year ended March, 2025)	428,948	48,124	53,114	45,051	62,283	209.79

 

 

■Reasons for revision of full-year consolidated operating results forecast

The Pachislot & Pachinko Machines Business performed strongly overall, driven by steady sales of key titles. On the other hand, in the Entertainment Contents Business, Full Game and new F2P titles in the Consumer area, and Rovio performed weakly. Furthermore, in the Gaming Business, ordinary income decreased although sales increased due to the commencement of consolidation of GAN Limited and Stakelogic B.V. (“Stakelogic”), which was not factored in the initial forecast. For these reasons, ordinary income for the fiscal year ending March 2026 is expected to be ¥43.5 billion, falling below the initial forecast.

 

Furthermore, as described in “1. Recording of extraordinary losses (impairment losses),” the Company recognized impairment losses on goodwill and other assets related to Rovio in the third quarter of the fiscal year ending March 2026. Furthermore, regarding Stakelogic, whose acquisition was announced in 2024, the market environment has deteriorated at a pace exceeding expectations due to stricter regulations in its primary market, the Netherlands, and its profitability has declined compared to initial forecast at the time of acquisition. As a result, the recoverable amount is expected to fall below the carrying amount and the Company expects to recognize impairment losses of approximately ¥15.0 billion (under review) at the end of this fiscal year. Taking these impacts into account, the net loss attributable to owners of the parent is expected to be ¥13.0 billion.

 

The Company has established its policy of selecting either the dividend on equity ratio (DOE) of 3% or more or a total return ratio of 50% or more, whichever is higher, and returning profits to shareholders through dividends or purchases of treasury stocks. The previously announced forecast for year-end dividends of ¥28 per share for the fiscal year ending March 2026 in accordance with the above policy remains unchanged. Combined with the already paid interim dividends, the total dividend forecast for the fiscal year ending March 2026 is ¥55 per share.

 

 

(Reference: Per segment breakdown of full-year consolidated operating results forecast for the fiscal year ending March 2026)

                                                                                                                          (Unit: million yen)

 

Segment			Previously announced forecast (A)	Revised forecast    this time (B)	Amount of increase or decrease (B-A)
Net sales	Total		475,000	490,000	15,000
	Breakdown	Entertainment Contents Business	336,000	330,000	-6,000
		Pachislot & Pachinko Machines Business	130,000	133,000	3,000
		Gaming Business	6,000	24,000	18,000
		Others/Eliminations, etc.	3,000	3,000	–
Ordinary income	Total		56,000	43,500	-12,500
	Breakdown Breakdown Entertainment Contents Business Pachislot and Pachinko Machines Business Resort Business Others/Eliminations, etc.	Entertainment Contents Business	40,000	31,000	-9,000
		Pachislot & Pachinko Machines Business	30,000	31,500	1,500
		Gaming Business	0	-4,000	-4,000
		Others/Eliminations, etc.	-14,000	-15,000	-1,000
Adjusted EBITDA	Total		67,500	10,000	-57,500
	Breakdown Breakdown Entertainment Contents Business Pachislot and Pachinko Machines Business Resort Business Others/Eliminations, etc.	Entertainment Contents Business	50,000	10,000	-40,000
		Pachislot & Pachinko Machines Business	33,000	32,000	-1,000
		Gaming Business	-2,500	-18,500	-16,000
		Others/Eliminations, etc.	-13,000	-13,500	-500

 

*The operating results forecast, and other figures contained in this document are made based on information available as of the date this document was published. Actual results may differ from the projected figures due to various factors going forward.

 

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