Slide 1: FY2019 Fourth Quarter Financial Results
GREE, Inc. FY2019 Fourth Quarter Financial Results August 2, 2019 Copyright © GREE, Inc. All Rights Reserved.
Slide 2: Executive Summary
Executive Summary Net sales ¥70.9 billion, operating income ¥5.5 billion, EBITDA ¥6.4 billion ⁃ Built long-term operating system and increased profitability of each title through Full- overseas distribution in the games business year ⁃ Launched live distribution platform and got off to a smooth st
Slide 3: Contents
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 4: Contents: Financial Results Overview
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 5: FY19 Full-Year and 4Q Financial Results Overview
1. Financial Results Overview (Consolidated) FY19 Full-Year and 4Q Financial Results Overview FY19 net sales of ¥70.9 billion, operating income of ¥5.5 billion and EBITDA of ¥6.4 billion Billions of yen FY19 FY19 4Q FY18 FY19 3Q YoY QoQ Net sales 70.94 -6.99 17.41 -0.23 77.93 17.64 Operating income
Slide 6: Net Sales, EBITDA, and Operating Income
1. Financial Results Overview (Consolidated) Net Sales, EBITDA, and Operating Income Strong earnings on contribution from overseas distribution and Billions of yen existing titles 22.0 25.0% 19.0 18.2 17.7 17.6 17.4 11.0 12.5% 8.5% 8.9% 8.8% 7.7% 5.4% 1.6 1.9 1.6 1.9 1.6 1.8 1.3 1.5 1.0 1.2 0.0 0.0%
Slide 7: 4Q Operating Income Analysis
1. Financial Results Overview (Consolidated) 4Q Operating Income Analysis Negative impact of ¥460 million from one -off events occurring in 3Q; adjusted for this, operating income rose QoQ ¥0.25bn increase Billions of yen +0.25 0.46 +0.16 -0.17 1.34 1.09 Operating Increase in Increase in Decrease in
Slide 8: FY19 4Q Cost Structure
1. Financial Results Overview (Consolidated) FY19 4Q Cost Structure Total costs held steady QoQ at ¥16.1 billion Billions of yen FY19 FY19 FY18 Factors in change（QoQ） 4Q QoQ YoY 3Q 4Q Advertising 1.18 0.06 -0.46 - 1.12 1.64 Commission 5.43 0.25 -0.83 Increase due to dales growth 5.18 6.26 Fees, etc.
Slide 9: Fiscal Year-End Dividend
1. Financial Results Overview (Consolidated) Fiscal Year-End Dividend Plan to pay dividend of ¥10 per share Maintaining a dividend on DOE of 2.0%, consolidated dividend payout ratio of 20% or higher FY19 Forecast FY18 Actual Record date June 30, 2019 June 30, 2018 Total ¥14 Dividend per share ¥10 Re
Slide 10: FY20 Outlook
1. Financial Results Overview (Consolidated) FY20 Outlook Overall - We expect firm profit based on global operations of games Game/entertainment - Global operations of existing title are stable Game - We expect upside from new game titles and overseas distribution (including in China) Live - Maintai
Slide 11: Contents: Operational Overview
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 12: FY19 Results Review and Summary
2. Operational Overview: FY19 results FY19 Results Review and Summary FY19 Business Plan Review Strengthen 3 Overall - Aggressively invested in three businesses earnings pillars - Enhanced operations and built a long-term operations system for existing titles “Game engine, - Strengthened profitabili
Slide 13: Creation of Long-term Operations System
2. Operational Overview: FY19 results Game/entertainment business - Game FY19 Results Creation of Long-term Operations System Titles maintain high rankings/rebound two years after release owing to operations undertaken with a long-term perspective Release Release Maintained Maintained high ranking h
Slide 14: Overseas Distribution: Strengthening Profitability
2. Operational Overview: FY19 results Game/entertainment business - Game FY19 Results Overseas Distribution: Strengthening Profitability Strengthening profitability through our global operations system Another Eden sales index trends DanMachi sales index trends Overseas Overseas distribution distrib
Slide 15: Overseas Distribution: Expanding Regionally/Accumulating Knowhow
2. Operational Overview: FY19 results Game/entertainment business - Game FY19 Results Overseas Distribution: Expanding Regionally/Accumulating Knowhow Distributing multiple titles in key regions, accumulating region-specific distribution knowhow Distribution region Partnership Japan North Europe Hon
Slide 16: Overseas Distribution: Increasing Profitability
2. Operational Overview: FY19 results Game/entertainment business - Game FY19 Results Overseas Distribution: Increasing Profitability Earnings per title rose owing to accumulation of knowhow regarding self- distribution and overseas distribution of titles based on 1st party IP Highly 2H FY19 profita
Slide 17: Multiplatform Distribution
2. Operational Overview: FY19 results Game/entertainment business - Game FY19 Results Multiplatform Distribution Development of titles based on 1st-party IP on platforms and services with growth potential Facebook LINE QUICK GAME Nintendo SwitchTM Instant Games MAU over 1 million Fishing Star QUICK
Slide 18: Launch of REALITY
2. Operational Overview: FY19 results Game/entertainment business - Live, etc. FY19 Results Launch of REALITY Expanding content portfolio focusing on REALITY Launch of REALITY Added avatar functions Expanded lineup of official programs 18 Copyright © GREE, Inc. All Rights Reserved.
Slide 19: Expanded User Base
2. Operational Overview: FY19 results Advertising and media business FY19 Results Expanded User Base Establishment of vertical media portfolio Genre Housing & Fashion Outing & Beauty lifestyles travel Main users Working Fashion and Men and women Women in their mothers trend conscious in their 20s an
Slide 20: Medium-Term Plan Targeting Medium-Term Growth
2. Operational Overview: Medium-Term Plan Medium-Term Plan Targeting Medium-Term Growth Targeting sustainable growth from three earnings pillars Scale Third pillar: Live entertainment business Sowing the seeds of new business Second pillar: Advertising and media business Expanding scale of operation
Slide 21: FY20 Strategy Summary
2. Operational Overview: FY20 Business Strategy FY20 Strategy Summary Business Plan Summary Strengthen 3 - Continue aggressive investment aimed at Overall earnings pillars strengthening three earnings pillars - Continue to invest in engine development and Game/entertainment improvement, and IP acqui
Slide 22: FY20 Strategy Development Pipeline
2. Operational Overview: FY20 Business Strategy Game/entertainment business - Game FY20 Strategy Development Pipeline 2 new titles scheduled for release in FY20 Continuing to invest in the development pipeline with 2-3 titles to be released starting in FY21 Scheduled for release in FY21 and onward F
Slide 23: Overseas Distribution Plans
2. Operational Overview: FY20 Business Strategy Game/entertainment business - Game FY20 Strategy Overseas Distribution Plans Increased earnings potential and profitability through further expansion of overseas distribution Distribution region Japan North Europe Hong Kong, China America Taiwan, etc.
Slide 24: Live Entertainment Business
2. Operational Overview: FY20 Business Strategy Game/entertainment business - Live, etc. FY20 Strategy Live Entertainment Business Accumulating reproducible content with a focus on platforms Production Platform Solutions Continue to discover Increase functionality Provide B-to-B solutions and produc
Slide 25: Expansion of Vertical Media Portfolio
2. Operational Overview: FY20 Business Strategy Advertising and media business FY20 Strategy Expansion of Vertical Media Portfolio Continued investment aimed at increasing media capabilities Expanding our vertical media portfolio Housing & lifestyles Outing & travel Beauty Fashion 25 Copyright © GRE
Slide 26: Contents: Appendix
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 27: 4Q Results: Game Business Overview
3. Appendix: 4Q Overview Game/entertainment business - Game 4Q Results Business Overview Domestic coin consumption (App games) Topics Billions of coins Anniversary event 12.0 11.4 10.8 11.0 10.9 - TV commercials aired etc. to mark 10.5 anniversaries for mainstay titles ■ Overseas distribution - Be
Slide 28: Nurturing First-party IP Over Long Term
3. Appendix: 4Q Overview Game/entertainment business - Game 4Q Results Nurturing First-party IP Over Long Term Supporting IP by holding large-scale events and releasing new titles AFTERLOST Another Eden - Shoumetsu Toshi Marked two-year anniversary Released June 6 • Marked two-year anniversary by re
Slide 29: Expanding Fan Communities ①
3. Appendix: 4Q Overview Game/entertainment business - Game 4Q Results Expanding Fan Communities ① Expanded fan base through anniversary events and TV commercials SINoALICE DanMachi Two-year anniversary event Two-year anniversary event • Aired TV commercials and held tie-in • Added new storyline dra
Slide 30: Expanding Fan Communities ②
3. Appendix: 4Q Overview Game/entertainment business - Game 4Q Results Expanding Fan Communities ② Energizing fan communities with major events Senki Zesshou SYMPHOGEAR XD UNLIMITED In Love with NEWS Two-year anniversary event Held birthday events • Released new storyline and songs, etc. • Held birt
Slide 31: Full-Scale Overseas Distribution
3. Appendix: 4Q Overview Game/entertainment business - Game 4Q Results Full-Scale Overseas Distribution Releases in more regions Another Eden SINoALICE Began distribution in Europe and Southeast Asia Over a million pre-registrations • Self-distribution in 34 countries and • We have teamed up with pa
Slide 32: Distribution of Licensed Titles
3. Appendix: 4Q Overview Game/entertainment business - Game 4Q Results Distribution of Licensed Titles One-Punch Man released in mainland China and reached 4th in sales ranking • Game app based on TV series targeting adults, distributed in China by Ourpalm Co. Ltd. • Preparing for release in Japan,
Slide 33: Expansion of VTuber Platform
3. Appendix: 4Q Overview Game/entertainment business - Live, etc. 4Q Results Expansion of VTuber Platform Expanded REALITY through service partner tie-ups and additional functions Service partner tie-ups Added functionality Strategic business alliance with Virtual Cast, Inc. Added avatar gacha funct
Slide 34: Strengthened Media Potential
3. Appendix: 4Q Overview Advertising and media business 4Q Results Strengthened Media Potential Energized user communities through contests, etc. LIMIA aumo Held online photo contest Held posting campaign • Energized user community through posting • Increased activity by holding posting campaign 34
Slide 35: Coin Consumption
3. Appendix: Supplementary Information Coin Consumption Billions of coins 19.1 18.1 1.3 17.3 17.1 1.1 16.4 1.0 0.8 0.7 5.7 5.5 5.3 4.9 4.5 12.2 11.4 11.1 11.4 11.2 4Q 1Q 2Q 3Q 4Q FY18 FY19 ■Game apps ■Browser games (smartphones) ■ Browser games (feature phones) 35 Copyright © GREE, Inc. All Rights R
Slide 36: 4Q FY19 Cost Structure
3. Appendix: Supplementary Information 4Q FY19 Cost Structure Billions of yen FY19 FY19 FY18 4Q QoQ YoY 3Q 4Q Rental charges 0.58 -0.06 -0.12 0.64 0.69 Labor costs 2.27 -0.13 0.17 2.39 2.10 Others 4.43 -0.37 -0.73 4.80 5.16 Cost of sales 7.27 -0.56 -0.68 7.83 7.95 Advertising 1.18 0.06 -0.46 1.12 1.
Slide 37: 4Q FY19 Balance Sheet
3. Appendix: Supplementary Information 4Q FY19 Balance Sheet Billions of yen FY19 FY19 FY18 4Q QoQ YoY 3Q 4Q Current assets 94.5 -1.8 -3.9 96.3 98.4 Fixed assets 28.0 -2.3 1.0 30.3 27.0 Total assets 122.5 -4.1 -2.9 126.6 125.4 Current liabilities 10.9 -1.2 -0.7 12.1 11.6 Fixed liabilities 0.9 -0.0 0
Slide 38: Group Headcount
3. Appendix: Supplementary Information Group Headcount Number of employees 1,746 1,661 1,701 1,693 1,531 4Q 1Q 2Q 3Q 4Q FY18 FY19 Note: • Includes non-consolidated group companies; as of the end of each quarter 38 Copyright © GREE, Inc. All Rights Reserved.
Slide 39: ■ 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