Fiscal 2016 Outlook and Restructuring Strategy
Restructuring Still Under Way
In fiscal 2016, the year ending March 31, 2016, we expect a 15% increase in net sales year on year. Furthermore, we aim to grow operating income 44% year on year given the effect of fiscal 2015's restructuringrelated expenses of approximately ¥7 billion and an expected benefit of approximately ¥6 billion from fixed cost reduction in the current fiscal year, mainly in the Entertainment Contents Business segment.
For the Pachislot and Pachinko Machine Business segment, we expect higher revenues but lower earnings. While we anticipate that additional titles will grow pachislot machine unit sales year on year, pachinko machine unit sales are likely to decline due to the absence of mainstay titles such as Pachinko CR Hokuto No Ken 6 series. We project lower earnings mainly because of higher component procurement costs and the introduction of new devices. We will concentrate efforts on improving costs through reuse. On the other hand, in the Entertainment Contents Business segment we expect revenues and earnings to grow significantly. The driver of this improvement will be the digital game area as it markets multiple mainstay titles. Further contributions will come from restructuring benefits, and we expect to move all existing businesses into the black.
Although we expect benefits from the restructuring implemented so far, it is only halfway completed. Therefore, rather than disbanding the Group Structure Reform Division, we will continue considering various measures, reaching decisions, and then implementing them. In particular, we have only laid the foundations for strengthening the profitability of the whole business portfolio. A major outstanding task is sustaining earnings growth by replacing businesses and investing in new businesses. To strengthen management of our business portfolio, we intend to clarify criteria for entering and withdrawing from businesses.
Next, I will explain how we intend to grow over the medium-to-long term.
