Slide 1: FY2019 Second Quarter Financial Results
GREE, Inc. FY2019 Second Quarter Financial Results February 4, 2019 Copyright © GREE, Inc. All Rights Reserved.
Slide 2: Executive Summary
Executive Summary Net Sales ¥17.7 billion, Operating Income ¥1.0 billion, EBITDA ¥1.2 Financial Results billion Overview ⁃ Net sales and operating income were in line with our forecast Overseas development proceeded smoothly ⁃ Expanded DanMachi distribution area to include Hong Kong and Taiwan (
Slide 3: Contents
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 4: 1. Financial Results Overview
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 5: FY19 2Q Financial Results Overview
1. Financial Results Overview (Consolidated) FY19 2Q Financial Results Overview Net Sales ¥17.7 billion, Operating Income ¥1.0 billion and EBITDA ¥1.2 billion Billions of yen FY19 FY19 FY18 2Q 1Q 2Q QoQ YoY Net sales 17.73 -0.43 -1.73 18.16 19.46 Operating income 0.97 -0.65 -1.37 1.62 2.34 Ordinary
Slide 6: Net Sales, Operating Income, and EBITDA
1. Financial Results Overview (Consolidated) Net Sales, Operating Income, and EBITDA Full-scale development investment for new titles. Operating income 5.4% Billions of yen 22.0 25.0% 19.5 19.0 17.9 18.2 17.7 15.6% 12.0% 11.0 12.5% 8.5% 8.9% 5.4% 2.8 3.2 2.7 2.3 1.6 1.9 1.6 1.9 1.0 1.2 0.0 0.0% 2Q 3
Slide 7: Operating Income Analysis
1. Financial Results Overview (Consolidated) Operating Income Analysis Operating income declined by ¥0.7 billion to ¥1.0 billion due to the impact of full-scale development investment, and of revision in variable costs. Billions of yen ¥0.65bn decrease 1.62 -0.43 +0.25 -0.47 0.97 Operating Operating
Slide 8: FY19 2Q Cost Structure
1. Financial Results Overview (Consolidated) FY19 2Q Cost Structure Total costs up ¥200 million QoQ, to ¥16.8 billion Billions of yen FY19 FY19 FY18 Factors in change（QoQ） 2Q QoQ YoY 2Q 2Q Advertising 0.89 -0.39 -0.54 Decrease from efficient investment(FY19 1Q:7.0%→FY19 2Q: 5.0%) 1.28 1.43 Commissio
Slide 9: 3Q FY19 Earnings Forecast
1. Financial Results Overview (Consolidated) 3Q FY19 Earnings Forecast Plan: Net Sales ¥16.5 billion~¥17.5 billion, Operating income ¥0.3 billion ~ ¥0.8 billion Billions of yen 1Q 2Q 3Q Results Results Forecast Net sales 18.2 17.7 16.5～17.5 Operating income 1.6 1.0 0.3～0.8 EBITDA 1.9 1.2 0.5～1.0 ⁃ O
Slide 10: Investment securities held
1. Financial Results Overview (Consolidated) Investment securities held Upside Approximately ¥25bn Approximately Example of investment ¥17bn Investment in shares VC investment End- Reflects assessed Potential December value at time of upside book value raising capital Notes: • Assessed value at time
Slide 11: 2. Operational Overview
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 12: Review and Summary of 2Q
2. Operational Overview: Summary Review and Summary of 2Q FY19 Business Plan Review Strengthen 3 Overall - Made steady progress in distributing games overseas earnings pillars -Overseas distribution of DanMachi and SINoALICE off to Game/entertainment “Game engine, a strong start ゲ Mobile IP, and glo
Slide 13: Development pipeline
2. Operational Overview: Game/entertainment business - Mobile Development pipeline Five titles in development FY20 and FY19 onward Already In released development First-party IP Co-developed IP 0 1 1 （0） （1） （1） Third-party IP 1 0 3 （1） （0） （3） Notes: • All titles in pipeline have received approval
Slide 14: Progress Made
2. Operational Overview: Game/entertainment business - Mobile Progress Made Domestic coin consumption (mobile games) Topics Billions of coins Existing titles 15.0 - Continued to strengthen operations by adding content, etc. 11.4 10.8 10.4 10.5 ■ DanMachi - MEMORIA FREESE 9.0 - Expanded distributio
Slide 15: Nurturing first-party IP over long term ①
2. Operational Overview: Game/entertainment business - Mobile Nurturing first-party IP over long term ① Strengthening our IP with large-scale releases of additional content Another Eden Shoumetsu Toshi Additions to main storyline Additions to new story “0.” • Began distribution of Version 2.0: Toho-
Slide 16: Nurturing first-party IP over long term ②
2. Operational Overview: Game/entertainment business - Mobile Nurturing first-party IP over long term ② In April, we distribute the newest game of Shoumetsu Toshi worldwide and also broadcast the anime TV show to increase IP recognition. FY19 FY14~ FY20 Distribute the newest series game Long-term op
Slide 17: Expanding fan communities ①
2. Operational Overview: Game/entertainment business - Mobile Expanding fan communities ① Attracting fans through real-world events and IP collaborations SINoALICE DanMachi - MEMORIA FREESE Held concert Hosted collaboration event • Deepening experience of in-game • Attracting new fans through strong
Slide 18: Expanding fan communities ②
2. Operational Overview: Game/entertainment business - Mobile Expanding fan communities ② Expanding fan communities through media mixing Senki Zesshou SYMPHOGEAR XD In Love with NEWS In-game broadcast of radio programs Held birthday events for NEWS members • TV anime casts host the program • Release
Slide 19: Full-scale overseas development ①
2. Operational Overview: Game/entertainment business - Mobile Full-scale overseas development ① Further increased sales by releasing DanMachi in more regions DanMachi Sales rising Began overseas marketing by distributing radio programs. ×2 Overseas Japan • Following North American release, released
Slide 20: Full-scale overseas development ②
2. Operational Overview: Game/entertainment business - Mobile Full-scale overseas development ② Began self distribution of first-party IP title Another Eden Another Eden Increasing overseas potential Began distribution January 29 Accumulating knowhow related to self distribution FY18 FY19 FY19 2H 1H
Slide 21: Full-scale overseas development ③
2. Operational Overview: Game/entertainment business - Mobile Full-scale overseas development ③ Overseas development of SINoALICE off to a smooth start SINoALICE SINoALICE in Hong Kong, Taiwan, etc. in North America and Europe Started distribution on November 28 Distribution scheduled to start in 20
Slide 22: Overseas development plans
2. Operational Overview: Game/entertainment business - Mobile Overseas development plants Steady progress in overseas development, continuing to prepare for releases Distribution region Partnership North Hong Kong, agreement Japan America Europe Taiwan, etc. China status Already Already Preparing Re
Slide 23: Multiplatform development
2. Operational Overview: Game/entertainment business - Consoles, etc. Multiplatform development Began distribution of Fishing Star for Nintendo Switch™ platform on January 31 - Our first title for the Nintendo SwitchTM, distributed in 38 countries and regions - Players use the Joy-Con controller as
Slide 24: Began distribution of REALITY Avatar
2. Operational Overview: Game/entertainment business - Live, etc. Began distribution of REALITY Avatar Began distribution of livestreaming app for VTubers on October 22 - With this simple app, all users need is one smartphone to create 3D avatars and livestream as a VTuber. - VTuber livestreams crea
Slide 25: Strengthened media potential
2. Operational Overview: Advertising and media business Strengthened media potential Strengthened media potential, made progress in securing clients in various media aumo app won award for excellence Secured more clients Selected for Google Play Best of 2018 Number of advertisers increased as media
Slide 26: 3. Appendix
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 27: Coin Consumption (1)
3. Appendix Coin Consumption (1) Strengthened media potential, made progress in securing clients in various media Overall coin consumption（1） Overall coin consumption （2） Billions of coins Billions of coins 25.0 25.0 20.0 19.1 20.0 1.7 18.1 19.1 17.6 1.3 17.3 18.1 17.6 17.3 1.1 1.5 1.0 5.0 4.4 6.8 5
Slide 28: Coin Consumption (2)
3. Appendix Coin Consumption (2) Mobile games Web games Billions of coins Billions of coins 15.0 15.0 12.2 11.5 11.4 0.8 11.1 1.1 0.7 9.8 0.6 0.8 8.5 7.7 7.5 7.5 7.0 6.6 6.2 4.5 11.4 10.8 3.8 10.4 10.5 3.4 9.0 3.4 3.2 4.0 3.9 3.5 3.2 3.0 0.0 0.0 2Q 3Q 4Q 1Q 2Q 2Q 3Q 4Q 1Q 2Q FY18 FY19 FY18 FY19 ■ De
Slide 29: 2Q FY19 Cost Structure
3. Appendix 2Q FY19 Cost Structure Millions of yen FY19 FY19 FY18 2Q 1Q 2Q QoQ YoY Rental charges 704 13 -63 691 766 Labor costs 2,210 -94 233 2,304 1,977 Others 5,526 658 490 4,868 5,036 Cost of sales 8,440 577 660 7,863 7,780 Advertising 890 -388 -541 1,278 1,431 Commission fees 3,472 -302 -838 3,
Slide 30: 2Q FY19 Balance Sheet
3. Appendix 2Q FY19 Balance Sheet Billions of yen FY19 FY19 FY18 2Q QoQ YoY 1Q 2Q Current assets 96.28 0.41 3.41 95.87 92.87 Fixed assets 29.17 0.34 -1.35 28.83 30.52 Total assets 125.45 0.75 2.06 124.70 123.39 Current liabilities 12.24 0.53 0.85 11.71 11.39 Fixed liabilities 0.90 -0.07 0.31 0.97 0.
Slide 31: Breakdown of Group Headcount
3. Appendix Breakdown of Group Headcount Number of employees Headcount at Group companies end-2Q Game/Entertainment funplex, Pokelabo, WFS, Wright Flyer Live Entertainment, etc. 1,069 Business Advertising and Media Glossom, Limia, 3 Minutes, aumo, QUANT, etc. 398 Business Other businesses Includes G
Slide 32: ■ This document includes some forecasts, which are based on currently available information. Actual
■ This document includes some forecasts, which are based on currently available information. Actual performance may differ due to various factors. ■ When producing this document, we were careful to avoid errors or omissions, but the accuracy and completeness of the provided information is not guaran