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- Magnagement Message [An Evaluation of Fiscal 2012]
For fiscal 2012, operating income declined for the first time in four fiscal years. We view this with the utmost gravity. On the other hand, each business segment's business results deserve a separate evaluation. Furthermore, the tasks we need to address urgently have become evident.
In the Pachislot and Pachinko Machine Business segment, unit sales of pachislot and pachinko machines were lower year on year. The decrease in pachislot machine unit sales was due to revising marketing schedules of certain pachislot machines, which resulted from component-purchasing problems following the Great East Japan Earthquake and the flooding in Thailand. As for pachinko machine unit sales, heightening replacement demand for pachislot machines, for which utilization rates are continuing to recover, contributed to a lackluster demand for pachinko machines. Nevertheless, the business segment grew earnings for the fourth consecutive fiscal year, testifying to a lean profit structure. This solid performance mainly stemmed from the buoyant sales of mainstay titles for high-margin pachislot machines and thoroughgoing cost improvements across the whole business segment. Also, the Amusement Machine Sales Business segment received steady revenues from the utilization of revenue-sharing titles. Despite power-saving efforts in response to power supply problems, the Amusement Center Operations segment grew sales at existing amusement centers year on year to secure operating income. Thus, even amid unforeseen circumstances, many of our businesses posted solid earnings. Meanwhile, a task that the Group must tackle in order to realize an even steeper growth trajectory has emerged clearly-it must drastically restructure the Consumer
Business segment, which recorded an operating loss.
| 2011 | 2012 | YOY change | |
|---|---|---|---|
| Net sales | 396.7 | 395.5 | -0.3% |
| Pachislot and Pachinko Machine Business | 212.0 | 212.1 |  |
| Amusement Machine Sales Business | 47.2 | 49.9 | +5.7% |
| Amusement Center Operations | 45.6 | 44.6 | -2.2% |
| Consumer Business | 88.8 | 85.6 | -3.6% |
| Other | 2.8 | 3.0 | +7.1% |
| Operating income (loss) | 68.7 | 58.3 | -15.1% |
| Pachislot and Pachinko Machine Business | 64.2 | 71.0 | +10.6% |
| Amusement Machine Sales Business | 7.3 | 7.4 | +1.4% |
| Amusement Center Operations | 0.3 | 0.3 | |
| Consumer Business | 1.9 | (15.1) | |
| Other | 0 | 0.2 | |
| Corporate and eliminations | (5.1) | (5.4) | |
| Operating margin | 17.3% | 14.8% | -2.5pt. |
| Net income | 41.5 | 21.8 | -47.5% |
