Japan’s Sega Sammy Holdings Inc, parent of gaming equipment supplier Sega Sammy Creation Inc, has announced a new medium-term plan for the three years to the fiscal year ending March 2027.
The company expects to achieve annual net sales of JPY540.0 billion (US$3.57 billion) in the 12 months to March 2027, according to the parent’s latest annual report.
Group-wide adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) are forecast to reach JPY90.0 billion.
“We set a three-year cumulative adjusted EBITDA target of over JPY230.0 billion and will continue to emphasise capital-efficient management, aiming for an average return on equity of over 10 percent over these three years,” said Koichi Fukazawa, Sega Sammy’s senior executive vice president and group chief financial officer, in a message in the report.
The company said it would “further strengthen each business portfolio and aim to expand IP scale in the entertainment contents business, maintain stable earnings in the pachislot and pachinko machines business, and establish a foundation in the gaming business, to clarify the positioning of each business”.
Sega Sammy expects the group’s gaming business to become “adjusted EBITDA positive” during the three-year period.
“We will aggressively invest in the growth fields of the consumer area [of the entertainment contents business] and the gaming business,” said the parent company.
“We aim to achieve sustainable growth and strengthen competitiveness by investing the abundant cash flow generated from the pachislot and pachinko machines business in the consumer area, centred on the major IPs developed by Japan studios, which continues to grow, and in the gaming business, which we aim to establish as a new business pillar,” it added.
Under the new medium-term plan, the company plans to invest more than JPY120.0 billion in development in its consumer area, and has allocated JPY100.0 billion for strategic investments. Another JPY16.0 billion has been allocated for the acquisition of online gaming enterprise GAN Ltd.
Sega Sammy Creation announced in November last year that it was to pay US$1.97 per share – via a special purpose company – to acquire GAN, a firm offering business-to-business software services in the United States, and business-to-consumer services in Europe and South America.
GAN shareholders approved the deal in February this year, and upon the completion of the merger, GAN will cease to be a publicly-traded company.
The management of Sega Sammy Holdings had said the acquisition of GAN would help create “significant synergies” with other businesses of the group, especially as the iGaming segment is expected to be legalised in more states in the U.S. market.
Sega Sammy recorded net sales of JPY467.8 billion in the fiscal year to March 2024, and ordinary income of JPY59.7 billion. Adjusted EBITDA for the prior fiscal year stood at JPY54.7 billion.
“In the fiscal year ending March 2025, the first year of the plan, net sales and ordinary income will be lower than in the final year of the previous medium-term plan, but adjusted EBITDA is expected to grow from the first year,” stated the parent company.
It added: “In the second year, not only adjusted EBITDA but also net sales and ordinary income are expected to exceed the previous medium-term plan.”
In July, Sega Sammy Creation said it had agreed to acquire Stakelogic BV, a business-to-business (B2B) iGaming content supplier headquartered in the Netherlands. The acquisition is “expected to close by the first quarter of the fiscal year ending March 2026,” the firm said at the time.
