Gree Holdings.inc. · TSE:3632
Gree Holdings.inc — Q1 FY2014 Earnings Presentation
32 slides from Gree Holdings.inc's earnings presentation, Nov 13, 2013
Slide 1: FY2014 First Quarter Financial Results
GREE, Inc. FY2014 First Quarter Financial Results November 13, 2013 Copyright © GREE, Inc. All Rights Reserved.
Slide 2: Executive Summary
Executive Summary Net sales decreased QoQ to ¥35.3 billion. Operating profit Financial increased QoQ to ¥9.8 billion results ⁃ Increased operating profit by ¥2.0 billion QoQ through strict cost control overview ⁃ Recorded ¥5.2 billion extraordinary loss on write-off of assets related to titles and
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: FY14 1Q Financial Results Overview
1. Financial Results Overview (Consolidated) FY14 1Q Financial Results Overview Increased operating profit by ¥2.0 billion QoQ through strict cost control Billions of yen FY14 1Q FY13 4Q QoQ FY13 1Q YoY Net sales 35.3 37.0 -1.7 37.9 -2.6 EBITDA1 11.6 9.8 +1.9 16.7 -5.1 Operating profit 9.8 7.8 +2.0
Slide 6: Net sales, EBITDA, and Operating Profit
1. Financial Results Overview (Consolidated) Net sales, EBITDA, and Operating Profit Improved operating profit margin by 6.6 percentage points to 27.7% Billions of yen 50 500 50% 50 % 41.5% 39.4 37.9 37.9 37.0 36.2% 35.3 28.5% 27.7% 250 25 25% 25 % 21.1% 16.7 15.8 15.8 14.3 12.7 11.6 10.8 9.8 9.8 7.
Slide 7: Operating Profit Analysis
1. Financial Results Overview (Consolidated) Operating Profit Analysis Operating profit increased by approximately ¥2.0 billion due to advertising cost and fixed cost reductions totaling ¥3.7 billion Billions of yen ¥2.0bn increase ＋1.9 9.8 7.8 -1.7 +1.8 Fixed cost reductions Decrease Advertising co
Slide 8: FY14 1Q Cost Structure
1. Financial Results Overview (Consolidated) FY14 1Q Cost Structure Reduced total costs by ¥3.7 billion to ¥25.5 billion through strict cost control Billions of yen FY14 FY13 FY13 QoQ YoY Factors in change (QoQ) 1Q 4Q 1Q Reduced due to measures such as limiting mass media promotion and improving Adv
Slide 9: Extraordinary Gains and Losses
1. Financial Results Overview (Consolidated) Extraordinary Gains and Losses Posted a total extraordinary loss of ¥5.0 billion on re-examination of assets related to certain titles and implementation of a voluntary retirement program. During 1Q neared completion of narrowing in lineup of core titles
Slide 10: Breakdown of Assets Related to titles
1. Financial Results Overview (Consolidated) Breakdown of Assets Related to titles Lowered value of title-related assets to ¥3.4 billion as of end of 1Q Billions of yen Asset value as of FY14 1Q Asset value as of Type of asset end-4Q FY13 Write-off end-1Q FY14 Web game-related assets 1.4 0.6 0.9 Nat
Slide 11: Outlook
1. Financial Results Overview (Consolidated) Outlook We expect to achieve a turnaround in sales and profits in 4Q as new titles contribute to earnings Review of top line and costs Partner Continued releases of new titles by leading partners Web games Titles* Aim to cover decline of feature phone
Slide 12: 2. Operational Overview
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 13: Web games Business Update
2. Operational Overview Business Update Steady growth in coin consumption on smartphones, particularly in partner titles and in native game app titles for overseas markets FY14 1H Initiatives* Progress in FY14 1Q Ref. Steady growth in coin consumption on Target further growth of smartphones GREE P
Slide 14: Strategic Update
2. Operational Overview Strategic Update Implemented range of initiatives based on a strategy of selection and concentration, to target growth in smartphone market. Targeting a turnaround in sales and earnings in 4Q Key strategic initiatives (FY13 4Q to date) Realignment of development operations to
Slide 15: Coin Consumption (1)
2. Operational Overview Coin Consumption (1) Coin consumption on smartphones increased by approximately ¥1.6 billion QoQ, reaching approximately 65% of total coin consumption Coin consumption Composition(%) Billions of coins 600 60 100% 30 300 50% 0 0% 1Q 2Q 3Q 4Q 1Q 1Q 2Q 3Q 4Q 1Q FY13 FY14 FY13 FY
Slide 16: Coin Consumption (2)
2. Operational Overview Coin Consumption (2) Coin consumption on smartphones increased to 1.5 times the FY2013 1Q level. Of this, web games increased to 1.2 times and native games to 2.8 times Coin consumption on smartphones Billions of coins Web games 400 40 Billions of coins ×1.2 ×1.5 250 25 0 1Q
Slide 17: Release Schedule
2. Operational Overview Release Schedule Emphasis on quality and strong earnings potential 1H 2H Plan Progress2 Plan Remarks Partner Approx. 8titles Approx. Continued new title releases by titles1 7 titles 7titles leading partners Web games on schedule Approx. Revised release schedule to prioritize
Slide 18: Coin Consumption (1): Web Game Business
2. Operational Overview: Web Game Business Coin Consumption（1） Coin consumption on third-party titles increased slightly QoQ Billions of coins 60 600 First-party/ Co-developed Feature phones continued downtrend significant decline on previous quarter; smartphones also declined slightly Postponed
Slide 19: Coin Consumption (2): Web Game Business
2. Operational Overview: Web Game Business Coin Consumption（2） Coin consumption on third-party smartphone titles grew to 1.3 times that of FY2013 1Q as titles released during the previous fiscal year contributed to growth Third-party coin consumption on smartphones ×1.3 FY13 1Q 2Q 3Q 4Q FY14 1Q Key
Slide 20: Key Initiatives: Web Game Business
2. Operational Overview: Web Game Business Key Initiatives Cultivate hit titles that will contribute to growth of GREE Platform Partner titles First-party titles Promote steady growth in smartphone titles Pursue renewed topline growth in 4Q as new by leading partners titles contribute to earnings Ne
Slide 21: New First-party Title Releases
2. Operational Overview: Web Game Business New First-party Title Releases Halt in flow of Radical realignment of new first-party releases development operations Focused on maximizing earnings from existing titles. Completed reorganization of development Built up powerful operational expertise, but l
Slide 22: Coin Consumption: Native Game Business
2. Operational Overview: Native Game Business Coin Consumption Continued steady growth in coin consumption in overseas markets Overseas operations on track to achieve monthly profitability within 2013* Billions of coins 140 14 Japan market Consumption was roughly flat due to sluggish growth in cer
Slide 23: Key Initiatives: Native Game Business
2. Operational Overview: Native Game Business Key Initiatives Pursue steady growth with continual releases of new titles in overseas markets In Japan market, develop games in new genres other than card battle games Overseas markets Japan market Aim for steady growth each quarter with Develop new gen
Slide 24: Creating Hit Native Game Titles in Japan
2. Operational Overview: Native Game Business Creating Hit Native Game Titles in Japan Improve native game Expand into new genres development capabilities Launch titles in new genres from 3Q Start of GREE Garage Production Present From 3Q New genre A GREE Garage Production Program (Short-term protot
Slide 25: Strengthening Advertising Business
2. Overview: Expanding Business Domains Strengthening Advertising Business Strengthened advertising business with aim of expanding share of growing smartphone advertising market Expanded sales of smartphone Established Glossom, Inc.1 advertising to outside advertisers2 ×1.3 Ad network business One-s
Slide 26: Developing New Businesses
2. Overview: Expanding Business Domains Developing New Businesses Venture Capital Business Entertainment Business Invested in 11 companies in Japan and Pursuing growth of offline business utilizing South East Asia Internet and entertainment Portfolio PT Pricearea Andalan Bukalapak Star Festival Geni
Slide 27: 3. Appendix
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 28: FY14 1Q Cost Structure
3. Appendix FY14 1Q Cost Structure Millions of yen FY14 1Q FY13 4Q QoQ FY13 1Q YoY Rental charges 1,333 1,233 +100 993 +341 Labor costs 3,746 2,510 +1,236 1,826 +1,920 Others 2,783 2,523 +260 1,872 +911 Cost of sales 7,862 6,266 +1,595 4,690 +3,172 Advertising 4,447 6,265 -1,817 4,518 -70 Commission
Slide 29: FY14 1Q Balance Sheet
3. Appendix FY14 1Q Balance Sheet Billions of yen FY14 1Q FY13 4Q QoQ FY13 1Q YoY Current assets 85.2 93.0 -7.8 86.1 -0.9 Fixed assets 61.7 65.7 -4.0 50.3 +11.4 Total assets 146.9 158.7 -11.8 136.4 +10.5 Current liabilities 39.8 48.3 -8.6 40.8 -1.0 Fixed liabilities 10.5 12.4 -1.9 11.1 -0.6 Total li
Slide 30: Coin Consumption
3. Appendix Coin Consumption Overseas markets Japan market Millions of dollars Coins spent (hundreds of millions) 80 600 40 300 0 0 1Q 2Q 3Q 4Q 1Q 1Q 2Q 3Q 4Q 1Q FY13 FY14 FY13 FY14 ■Third-party ■First-party/Co-developed* Notes: *Titles in which GREE is credited are categorized as “First-party/ Co-d
Slide 31: Japan User Data (as of September 30, 2013)
3. Appendix Japan User Data (as of September 30, 2013) 1, 2 Total no. of users in Japan 48.5 million GREE Users Number of users Gender breakdown Age breakdown 19歳以下 19 or under 21% 25% 38.9 million *2 45% 男性 Male 20代 20s 55% 女性 23% 31% 30代 30s Female 40代以上 40s Notes: 1. Pokelabo users counted based
Slide 32: ■ This document includes some forecasts, which are based on currently available information. The
■ This document includes some forecasts, which are based on currently available information. The authenticity of the information is not guaranteed. Actual performance may differ due to various factors. ■ When producing this document, we were careful not to include errors or omissions, but the authen