Nazara Technologies Ltd. · NSE:NAZARA
Nazara Technologies — Investor Presentation (August 2021)
65 slides from Nazara Technologies's investor presentation, Aug 9, 2021
Slide 1: Nazara Technologies Limited
Nazara Technologies Limited (Formerly known as Nazara Technologies Private Limited) Nazara TM August 09, 2021 Head, Listing Compliance Department Head Listing Compliance Department BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers Exchange Plaza, Plot No. C/1. G Block, D
Slide 2: Investor Presentation August 2021
Nazara Technologies Limited Investor Presentation August 2021
Slide 3: Safe Harbour
Safe Harbour This presentation and the accompanying slides (the “Presentation”), which have been prepared by Nazara Technologies Ltd. (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any sec
Slide 4: Q1FY22 Performance
Q1FY22 PERFORMANCE
Slide 5: Q1FY22 Consolidated Performance
Q1FY22 Consolidated Performance Key Highlights (All figures in INRm) Q1FY22 Q1FY21 Growth% Revenue Revenue by business segments Contribution i. eSports 532 266 100% 41% ii. Gamified early learning 521 357 46% 40% iii. Freemium 58 42 38% 4% iv. Real money gaming 22 18 22% 2% v. Telco subscription 179
Slide 6: Gamified Learning - Q1FY22 Business Highlights
Gamified Learning - Q1FY22 Business Highlights Kiddopia Paid Subscriber base Revenue (in Mn Rs.) EBITDA (in Mn Rs.) 3,50,000 3,40,482 3,16,428 3,21,763 39.7% 3,00,000 2,80,891 521 207 2,57,413 357 2,50,000 2,00,000 Q1FY21 Q1FY22 (153) Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 EBITDA % Q1FY21 Q1FY22 Paying
Slide 7: Nodwin Gaming - Q1FY22 Business Highlights
Nodwin Gaming - Q1FY22 Business Highlights ▪ Nodwin continued revenue growth momentum with 61% growth in Q1FY22 over Q1FY21 ▪ Media rights contributed 49% of the revenues in Q1FY22 and 79% Revenue (in Mn Rs.) EBITDA (in Mn Rs.) in Q1FY21 (55% for FY21). Game publishers formed second largest source o
Slide 8: Sportskeeda - Q1FY22 Business Highlights
Sportskeeda - Q1FY22 Business Highlights Q1FY22 Q1FY21 Revenue (in Mn Rs.) EBITDA (in Mn Rs.) Revenue Mix Direct Sales 7% 4% 14.3% 44.6% Programmatic Sales 93% 96% 148 66 India 26% 10% Geography Mix USA 53% 70% 28 ROW 21% 20% 4 WWE 48% 48% Q1FY21 Q1FY22 Q1FY21 Q1FY22 eSports 20% 14% EBITDA % Sports
Slide 9: Freemium - Q1FY22 Business Highlights
Freemium- Q1FY22 Business Highlights Revenue (in Mn Rs.) EBITDA (in Mn Rs.) ▪ WCC (World Cricket Championship) is the world’s largest cricket simulation 21.4% 25.9% game franchise on mobile and is played for ~47 minutes / day by ~13.25 Mn 58 monthly active users The Game has a very strong franchise
Slide 10: Others - Q1FY22 Business Highlights
Others - Q1FY22 Business Highlights Telco Subscription Sports Fantasy ▪ The business declined by 19% in Q1FY22 over Q1FY21 ▪ Sports fantasy had witnessed disruption in FY21 on account whereas remained flat in comparison to Q4FY21 of lack of live matches in first half of FY21 and regulatory turbulenc
Slide 11: Nazara Strengthens International Presence
Nazara’s Strengthens International Presence Overview Incorporated in February 2018, Publishme is a full-service games marketing and publishing agency which works extensively with gaming publishers in Turkey and MENA region Industry Operates in Free to Play Games (Freemium), E-Sports and Brand Market
Slide 12: Consolidated P&L
Consolidated P&L (All figures in INRm) Q1FY22 Q1FY21 YoY% Q4FY21 QoQ% FY21 Revenue from operations 1,312 905 45% 1,234 6% 4,542 Content, event and web server 213 56 183 524 Advertising and promotion 424 716 538 2,265 Commission 137 106 143 501 Employee benefits 145 99 152 487 Others 92 63 100 313 To
Slide 13: Key Metrics - Revenue
Key Metrics - Revenue (All figures in INRm) Q1FY22 Q1FY21 Revenue Mix Revenue by business segments i. eSports 532 266 14% 24% 29% ii. Gamified early learning 521 357 4% 2% 41% Q1FY22 2% Q1FY21 iii. Freemium 58 42 5% 40% iv. Real money gaming 22 18 39% v. Telco subscription 179 221 Total revenue from
Slide 14: Key Metrics - EBITDA
Key Metrics - EBITDA (All figures in INR mn) Q1FY22 Q1FY21 Segmental EBITDA (in INR million) EBITDA by business segments i. eSports 89 15 Q1FY22 Q1FY21 ii. Gamified early learning 207 (153) iii. Freemium 15 9 207 iv. Real money gaming (11) (61) v. Telco subscription 38 62 vi. Unallocated (37) (6) EB
Slide 15: Overview
OVERVIEW
Slide 16: Company Overview
Company Overview • A leading India-based diversified gaming and sports media platform Revenue from Operations EBITDA Diverse business segments including eSports, gamified early learning, freemium, skill-based, (in Mn Rs.) (in Mn Rs.) fantasy and trivia real money gaming, and telco subscription 10.0%
Slide 17: Our Journey
Our Journey ▪ Ushered Content Led Micro Nazara founded by Vikash Transaction Models on Telcos Mittersain & Nitish Mittersain ▪ Published cricket games around Sachin, Dhoni & Sehwag ▪ Strategic decision to be a mobile 1999 first company 2004-06 ▪ Mr. Manish Agarwal appointed as CEO in 2015 ▪ Expanded
Slide 18: Our Unique Story
Our Unique Story Only Diversified Player in India ▪ Across Geography: Developed and Emerging Markets ▪ Business Model: Advertising, Subscription, Media Rights, In-App purchases, Brand Sponsorships ▪ Across Business Segments: eSports, Sports Simulation, Early Learners and Skill based Fantasy among ot
Slide 19: Business Overview Snapshot
Business Overview Snapshot Nazara is the leading India-based diversified gaming and sports media platform Select offerings Overview Target demographics Revenue Model Immersive, self-directed learning Gamified Early Learning experience with content Children aged 2-6 years ▪ Subscription based (40% of
Slide 20: Gaming Industry
GAMING INDUSTRY
Slide 21: Gaming - New Leader in M&E Sector
Gaming - New Leader in M&E Sector Global Gaming Industry Compared with Movies & Music Indian Gaming Industry Compared with Bollywood 2017-2020 (in USD Billions) 2016-2023 (in USD Billions) Global Gaming Industry larger than Music & Movies Driven by the proclivity of the Indian population to adopt ga
Slide 22: Global Trends Affecting Gaming Eco-system
Global Trends Affecting Gaming Eco-system Per Capita Income Growth Smartphone User Penetration 2016 2020 2023E Global (in USD) India (in Rs.) 88% 90% +3.5% 81% 85% 77% 80% 85% 78% +11% 67% 72% 17,820 135.1 51% 52% 15,600 80.2 Global US China India Source: Datareportal 2015 2020 2015 2020 Source: IMF
Slide 23: The Indian Gaming Industry – Mobile gaming expected to increase
The Indian Gaming Industry – Mobile gaming expected to increase Others Indian Gaming Market China Gaming Market US Gaming Market Console (in USD Billion) (in USD Billion) (in USD Billion) Mobile 2016 15% 35% 50% 0.5 2016 52% 1% 47% 27.0 2016 24% 50% 26% 25.0 2020 6% 17% 77% 1.5 2020 38% 3% 59% 42.7
Slide 24: Gamified Early Learning
GAMIFIED EARLY LEARNING
Slide 25: Gamified Early Learning
Gamified Early Learning ▪ Flagship App – Kiddopia (COPPA certified by KidSAFE) Overview ▪ Self-directed learning experience through gamification Trusted and well recognized brand ▪ Marketed through Google, Facebook and app stores Tillywig Toy Target ▪ Children Aged 2-7 Years Award Demographics ▪ Pre
Slide 26: Kiddopia – Key Metrics
Kiddopia – Key Metrics Kiddopia Paid Subscriber base 3,50,000 3,40,482 Revenue (in Mn Rs.) 3,16,428 3,21,763 3,00,000 2,80,891 1,758 2,57,413 2,50,000 521 357 2,00,000 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Q1FY22 Q1FY21 FY21 Paying Subscribers Activation ratio from free trial to subscription has remain
Slide 27: US Market – An Opportunity
US Market – An Opportunity US alone huge enough to absorb Nazara’s marketing spend and gain market share Global Gamified Early Global Addressable US Gamified Early US Early Child Learning Market Population1 (2009) Learning Market Care & Education (in bn USD) (mn) (in bn USD) (in bn USD) 7 80 44 2016
Slide 28: eSports
eSPORTS
Slide 29: A. Nodwin Gaming
A. Nodwin Gaming
Slide 30: What is eSports?
What is eSports? Indira Gandhi Stadium 2019 Streamed Live Worldwide (New Delhi) Packed with thrill seeking Gen Z & Millennials, watching professional athletes compete in PUBG’s World Championships Fast Forward 6 years Intro to eSports (Video) https://bit.ly/3aDrntT Wankhede Stadium 2025 Streamed Liv
Slide 31: eSports Overview
eSports Overview ▪ Nodwin Gaming offers premium eSports content (live and on demand) to TV broadcasters and OTT platforms Overview ▪ Nodwin Gaming in partnership with game publishers and brands is engaged in providing e-sports gaming consultancy related to organizing gaming events, sponsorships and
Slide 32: eSports Growth Drivers
eSports Growth Drivers Virtuous Cycles drive eSports IAP Driven Revenues Live Stream Viewers Publishers Live Increase in Mobile spend on Streaming Mobile Gamers building Market Gamers eSports eSports eSports disrupting Symbiotic with Drives Publishers sports ecosystem Stimulates Multiple participati
Slide 33: eSports Ecosystem
eSports Ecosystem Technology & infrastructure Arrangements with game publishers and ▪ Exclusive license partnership with ESL for internet service providers management and hosting Ip based gaming events ▪ Manage and host IP-based gaming events ▪ Utilise publicly available technology platforms for hos
Slide 34: Why Will We Continue to Dominate?
Why Will We Continue to Dominate? Deep Moat : Well entrenched community connect. Create & Celebrate Heroes We Create Heroes Zero to Hero Grassroot to International ✓ Only company in India to have rights over IP and assets across grassroot, regional, national and international eSports International ✓
Slide 35: Why Will We Continue to Dominate? Create Build Result
Why Will We Continue to Dominate? Nazara builds and owns tech infrastructure on which global games run locally Publishers want to engage gamers Brands want to reach consumers Tech Infrastructure Servers, Data Pipes, Optimized Routes, CDN, Create Game Servers, ISP Peering, Data Centers Gaming Activat
Slide 36: B. Sportskeeda
B. Sportskeeda
Slide 37: eSports Media
eSports Media ▪ A leading sport and eSports news destination website with content across WWE, eSports, cricket, soccer and basketball ▪ Largest eSports news destination in India Overview ▪ According to Comscore report, Sportskeeda is the 2nd largest sports website in India Target ▪ eSports fans & sp
Slide 38: Key Metrics
Key Metrics Average MAU Sportskeeda Revenue (in Mn Rs.) 7,00,00,000 6,05,25,455 6,05,42,840 5,00,00,000 344 5,00,54,366 4,17,69,005 3,00,00,000 148 1,70,85,272 28 1,00,00,000 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q1FY22 Q1FY21 FY21 The increase in visits per month has resulted in a EBITDA (in Mn Rs.) c
Slide 39: Freemium
FREEMIUM
Slide 40: Freemium
Freemium ▪ Freemium is Free to download games from Google play and App store Overview ▪ Casual to mid-core, free-to-play sports simulation and children’s games Established ▪ World Cricket Championship (WCC) is the largest mobile-based cricket simulation game Presence Target ▪ Players aged 15-35 year
Slide 41: Key Metrics
Key Metrics DAU (Mn) Revenue (in Mn Rs.) EBITDA (in Mn Rs.) 3.5 25.9% 21.4% 20.5% 2.75 2.56 195 2.26 2.31 40 2 1.74 1.8 58 15 1.25 42 9 0.5 Q1FY22 Q1FY21 FY21 Q1FY22 Q1FY21 FY21 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 EBITDA % % IAP Conversion WCC3 0.15% 47 1 (WCC) ~13.251 mn 0.13% 0.12% 0.12% Time spent
Slide 42: IAP Drivers
IAP Drivers Surge in IAP will be Driven by Growth of Mid & Hard Core Gamers & Higher ARPPU 2018 2020 2025 Hard Core 5mn 10mn Gamers 30mn Mid Core 15mn 35mn Gamers 100mn Casual Gamers 100mn 250mn+ 500mn+ Non Gamers Revenue Pyramid 2025 Underlying Consumer Behavior – Catalyst in Growth of Mid & Hard c
Slide 43: Dominance in Cricket Gaming – A Massive Opportunity
Dominance in Cricket Gaming – A Massive Opportunity WCC is the most Downloaded Cricket Game Huge opportunity in cricket crazy India Cricket draws 93% of sports viewers in India ▪ In 2018, out of a TV viewing audience of 766mn, 93% watched cricket ▪ Nextwave’s cricket IP is similar to what FIFA (owne
Slide 44: Well poised to benefit from IAP led growth
Well poised to benefit from IAP led growth Well poised to benefit from IAP led growth 51 Daily engagement is getting deeper (mins) 46 ▪ For the new cricket title ( WCC3), daily user engagement is already up to 51 mins from 46 mins ▪ Game economy developed/ fine tuned based on market feedback/ trend
Slide 45: Skill-Based, Fantasy & Real Money Games
SKILL-BASED, FANTASY & REAL MONEY GAMES
Slide 46: Skill-based, fantasy and Trivia Real Money Gaming
Skill-based, fantasy and Trivia Real Money Gaming ▪ Entered skill-based gaming in India and have strategically created presence in the real money gaming segment Overview ▪ With the acquisition of Halaplay Technologies, and investments in Sports Unity, the Company is participating in sports fantasy g
Slide 47: Large Opportunity playing with binary risks of statutory issues
Large Opportunity playing with binary risks of statutory issues Market ($ mn) Users (mn) CEA ($ mn) OFS Revenue ($ mn) 947 100 2,196 329 347 232 35 2 2018 2021 Jun-16 Mar-20 2018 2020 2018 2020 Drivers Regulation ▪ Between 2018 and 2020, Online Fantasy Sports (OFS) revenue registered a 9.4x growth ▪
Slide 48: Telco Subscription
TELCO SUBSCRIPTION
Slide 49: Telco Subscription
Telco Subscription ▪ Catalogue of Android and HTML5 games offered as value-add services to telco subscribers Overview ▪ Recently acquired non-exclusive global distribution rights for games developed by Disney Target ▪ Late adopters of Internet, First-Time gamers Demographics Monetization ▪ Subscript
Slide 50: Free Cash Accretive
Free Cash Accretive Tech Platform Stable revenues with strong EBITDA generation Highly scalable and cost-efficient model ▪ One common gaming/subscription platform implemented EBITDA* (in Mn Rs.) Revenue (in Mn Rs.) across 52 telcos ▪ Revenues being generated in Middle East, Africa and S-Asia 21.2% 2
Slide 51: Rapidly Scaling Growth Through Strategic Acquisitions
RAPIDLY SCALING GROWTH THROUGH STRATEGIC ACQUISITONS
Slide 52: Strategic Acquisitions
Strategic Acquisitions ▪ Nazara has expanded its portfolio of business by consistent strategic acquisitions since 2017 ✓ Three companies (Paper boat, Nodwin Gaming and Absolute Sports) have scaled exponentially post acquisition ✓ World Cricket Championship: Iconic IP and Market leader in sports simu
Slide 53: Our Future Approach to M&A
Our Future Approach to M&A Pursue strategic investment and acquisition opportunities in underserved markets and geographies Increase stake in existing investments Focus on large total addressable market, strong local moat, clear use cases for growth capital Grow user base, deepen market penetration,
Slide 54: Unique combination of high growth annuity and great value creation
Unique combination of high growth annuity and great value creation Way Forward… ✓ Build on Nazara’s leading market position and growth opportunity in India ✓ Enhance existing offerings and increase monetization opportunities ✓ Pursue strategic investment and acquisition opportunities ✓ Further build
Slide 55: Pioneers of Indian Online Gaming Industry
PIONEERS OF INDIAN ONLINE GAMING INDUSTRY
Slide 56: Management Team
Management Team Nitish Mittersain Manish Agarwal Joint MD, Nazara Group CEO, Nazara ◼ Founded Nazara in 1999 ◼ Joined Nazara in 2015 ◼ Other Experience: Trustee of Dr. B. K. ◼ Other Experience: Reliance Games, Goyal Heart Foundation Zapak, UTV, Rediff.com, HUL Anupam Dhanuka Anshu Dhanuka Akshat Rat
Slide 57: Board of Directors
Board of Directors Vikash Mittersain Nitish Mittersain Chairman & MD Joint MD ◼ Founded Nazara in 1999 ◼ Founded Nazara in 1999 ◼ Other Experience: Founder and President ◼ Other Experience: Trustee of Dr. B. K. of India Business Group (Chamber of Goyal Heart Foundation Commerce) Shobha Jagtiani Prob
Slide 58: Historical Financials
HISTORICAL FINANCIALS
Slide 59: Consolidated P&L
Consolidated P&L (All figures in INRm) FY21 FY20 Revenue from operations 4,542 2,475 Content, event and web server 524 507 Advertising and promotion 2,265 1,329 Commission 501 71 Employee benefits 487 319 Others 313 305 Total expenses 4,090 2,532 EBITDA 453 (57) EBITDA% 10.0% -2.3% Impairment Loss 4
Slide 60: Key Metrics - Revenue
Key Metrics - Revenue Revenue Mix 16% (All figures in INRm) FY21 FY20 37% 33% 34% 4% 3% FY21 FY20 Revenue by business segments 8% 39% 17% i. eSports 1,701 842 8% ii. Gamified early learning 1,758 191 eSports Real money gaming Gamified early learning Telco subscription iii. Freemium 195 198 Freemium
Slide 61: Key Metrics - EBITDA
Key Metrics - EBITDA (All figures in INRm) FY21 FY20 EBITDA by business segments Segmental EBITDA (in INR million) i. eSports 289 75 FY 21 FY 20 ii. Gamified early learning 126 (35) 289 iii. Freemium 40 8 242 iv. Real money gaming (90) (347) v. Telco subscription 114 242 126 114 vi. Unallocated (26)
Slide 62: Consolidated Balance Sheet
Consolidated Balance Sheet As at As at As at (All figures in INRm) March 31, 2020 As at March 31, 2021 (All figures in INRm) March 31, 2020 (Restated) March 31, 2021 (Restated) Assets Non-current assets Equity and liabilities Property and equipment 17.2 22.7 Equity Right-of-use assets 21.4 86.1 Shar
Slide 63: Extract of Consolidated Cashflow Statement
Extract of Consolidated Cashflow Statement Particulars (All figures in INRm) FY 21 FY 20 Profit/(loss) before tax for the year 167.0 (195.8) Adjustment for non-cash items and others 360.2 159.2 Changes in working capital 306.5 87.0 Cash genereated from operations 833.7 50.4 Direct taxes (159.6) (72.
Slide 64: Glossary
Glossary Term Description Term Description APAC Asia Pacific M&A Mergers and Acquisitions CAC Consumer Acquisition Cost MAU Monthly Active Users Compounded Annual Growth Rate = (End Value/Start M&E Media and Entertainment CAGR Value)^(1/Periods) -1 MS Market Share COPPA Children’s Online Privacy Pro
Slide 65: Contact Us
Contact Us Company : Investor Relations Advisors : Nazara Technologies Limited Strategic Growth Advisors Private Limited CIN: U72900MH1999PLC122970 CIN: U74140MH2010PTC204285 Rahul Agarwal / Ami Parekh Mr. Rakesh Shah rahul.agarwal@sgapl.net / ami.parekh@sgapl.net Chief Financial Officer +91 982143
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