Gree Holdings.inc. · TSE:3632
Gree Holdings.inc — Q2 FY2018 Earnings Presentation
35 slides from Gree Holdings.inc's earnings presentation, Feb 2, 2018
Slide 1: FY2018 Second Quarter Financial Results
GREE, Inc. FY2018 Second Quarter Financial Results February 2, 2018 Copyright © GREE, Inc. All Rights Reserved.
Slide 2: Executive Summary
Executive Summary Financial Net Sales ¥19.5 billion, Operating Income ¥2.3 billion, EBITDA Results ¥2.7 billion Overview ⁃ Surpassed our targets for both sales and income Strengthened operation of existing titles and made progress in development of new titles ⁃ Implemented measures to restart gr
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: FY18 2Q Financial Results Overview
1. Financial Results Overview (Consolidated) FY18 2Q Financial Results Overview Net sales ¥19.5bn, operating income ¥2.3bn Billions of yen FY18 2Q FY18 1Q FY17 2Q QoQ YoY Net sales 19.46 -2.15 4.11 21.61 15.35 EBITDA 2.71 -0.36 0.64 3.06 2.07 Operating 2.34 -0.35 0.84 2.69 1.50 income Ordinary 2.69
Slide 6: Net Sales, EBITDA, and Operating Income
1. Financial Results Overview (Consolidated) Net Sales, EBITDA, and Operating Income Operating margin narrowed by 0.5 percentage points QoQ to 12.0% Billions of yen 22.0 21.6 25.0% 19.2 19.5 15.9 15.3 12.5% 12.5% 11.0 12.0% 12.5% 9.8% 9.7% 3.1 3.1 2.7 2.7 2.1 2.2 2.4 2.3 1.5 1.5 0.0 0.0% 2Q 3Q 4Q 1Q
Slide 7: Operating Income Analysis
1. Financial Results Overview (Consolidated) Operating Income Analysis Operating income down ¥400 million to ¥2.3 billion, mainly on sales decline Billions of yen 0.35bn decrease 2.69 -2.15 ＋1.92 -0.12 2.34 Operating Decrease in Decrease in Increase in Operating Income net sales variable costs fixed
Slide 8: FY18 2Q Cost Structure
1. Financial Results Overview (Consolidated) FY18 2Q Cost Structure Total costs down ¥1.8 billion QoQ to ¥17.1 billion Billions of yen FY18 FY18 FY17 Factors in change（QoQ） 2Q QoQ YoY 1Q 2Q Decreased due to use of more efficient advertising Advertising 1.43 -0.90 0.37 (1Q 10.8% → 2Q 7.4%) 2.33 1.06
Slide 9: 3Q FY18 Earnings Forecast
1. Financial Results Overview (Consolidated) 3Q FY18 Earnings Forecast Net sales ¥19.5bn, operating income ¥2.5bn, EBITDA ¥2.8bn Billions of yen 1Q 2Q 3Q 1Q-3Q results results forecast forecast Net sales 21.6 19.5 19.5 60.6 Operating income 2.7 2.3 2.5 7.5 Ordinary income 3.0 2.7 2.5 8.2 Net income
Slide 10: 2. Operational Overview
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 11: Operational Overview: Review and Summary of 2Q
2. Operational Overview: Summary Review and Summary of 2Q FY18 Business Plan Review Aggressive push - Continued to invest in measures to restart growth in Overall forward with existing titles investment in growth businesses - Entered console games market - Added new scenarios to existing titles, str
Slide 12: Entry into console games market
2. Operational Overview: Game/entertainment business Entry into console games market Extending “game engine, IP, and global” strategies to console games Global release of 1st console title, Fishing Star for the Nintendo Switch™, in 2018 Further development of game engines 1st title: Fishing Star Fir
Slide 13: Progress Made
2. Operational Overview: Game/entertainment business - Mobile Progress Made Coin Consumption(Mobile) Topics Billions of coins Strengthened operation of existing titles 150 15.0 - Added new scenarios 12.6 - Entered into large-scale collaborations 10.4 10.0 Released Library Cross Infinite - Januar
Slide 14: Expected growth trend
2. Operational Overview: Game/entertainment business - Mobile Expected growth trend Sales growth through strengthening of operations and overseas development Initial strong Temporary Strengthening of Overseas performance decline operations development Sales growth Sales growth Note: The graphic belo
Slide 15: Development pipeline
2. Operational Overview: Game/entertainment business - Mobile Development pipeline Two titles already released; total of five titles in development Considering development of several existing titles for overseas markets FY19 and FY18 onward Already In released development First-party IP Co-developed
Slide 16: Existing Title Topics
2. Operational Overview: Game/entertainment business - Mobile Existing title Topics Added content such as new scenarios and storylines Another Eden: The Cat Who Goes Beyond Time Danmachi: Memoria Freeze* Added new scenarios Added new storylines • First part of version 1.5 released in November 2017 •
Slide 17: Existing Title Topics
2. Operational Overview: Game/entertainment business - Mobile Existing title Topics Continuedtostrengthenoperations,addnewcontentsuchasnewscenariosandstorylines,andupdatefunctions SINoALICE SenkiZesshouSYMPHOGEARXDUnlimited Added new scenarios Hosted new storyline event • Released new scenario, Real
Slide 18: Library Cross Infinite
2. Operational Overview: Game/entertainment business - Mobile New titles Library Cross Infinite Featuring an all-star cast of popular characters from Otomate (a media brand popular with women) January 25 release First collaboration with Otomate 最新のメインビジュアル - All-new bittersweet romance puzzle RPG fe
Slide 19: Puchiguru Love Live!
2. Operational Overview: Game/entertainment business - Mobile In Development Puchiguru Love Live! New Love Live! series game for smartphones created in close collaboration with Sunrise. Pre-registration underway. - All the μ's characters and Aqours characters from the Love Live! series appear as min
Slide 20: VR business
2. Operational Overview: Game/entertainment business – Consoles, etc. VR business Progress in investment, development and market promotion Released Daydream version of Fishing Star Providing new attractions Global release New amusement machine for VR PARK TOKYO • Features multiplayer fishing tournam
Slide 21: Progress Made: Advertising and media business
2. Operational Overview: Advertising and media business Progress Made Growth in number of Growth in media page views valuable clients 1.8x QoQ growth Growth in number of advertisers on MINE BY 3M and LIMIA ×1.8 花王様 BAYCREW’S GROUP様 イトーヨーカドー様 1Q 2Q サンゲツ様 高島屋様 • Steady growth in page views at websites
Slide 22: 3. Appendix
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 23: Game engine, IP, and global
3. Appendix FY18 Strategy Game and entertainment business strategy Game engine, IP, and global Engines Increase our sustainable competitive advantage ✖ Increase hit rate and IP profitability ✖ Global Increase earnings from IP- based titles 23 Copyright © GREE, Inc. All Rights Reserved.
Slide 24: Strategy 1: Game engine strategy
3. Appendix FY18 Strategy Strategy 1: Game engine strategy Increase our sustainable competitive advantage Game quality and achieving differentiation through quality Contents ・Characters ・Scenarios Enhance ・Immersion, etc. Contents Enhance Contents Apply Technical Apply base Technical ・Asset manageme
Slide 25: Strategy 2: IP strategy
3. Appendix FY18 Strategy Strategy 2: IP strategy Increase hit rate and profitability and make well-balanced use of a wide range of IP First-party IP Long-term growth from IP assets developed in house Wide Co-developed IP range of IP Created in cooperation with our partners Third-party IP Developmen
Slide 26: Strategy 3: Global strategy
3. Appendix FY18 Strategy Strategy 3: Global strategy Increase earnings from IP-based titles through our globally targeted Japan-based development system and by working with our partners Create and secure global IP Distribution Japan-based partnerships development and with best partners operation 26
Slide 27: Expected growth trend in mobile games
3. Appendix Expected growth trend in mobile games Sales growth through strengthening of operations and overseas development Initial strong Temporary Strengthening of Overseas performance decline operations development Note: The graphic below is meant to provide a rough image of expected native game
Slide 28: App, Video, and Investment
3. Appendix FY18 Strategy Advertising and media business App, Video, and Investment Establish media management App system with high continuation rate ✖ Video Accumulate high quality video production know-how ✖ Investment Establish our position in multiple genres 28 Copyright © GREE, Inc. All Rights
Slide 29: Main media brands
3. Appendix Main media brands Fashion video magazine Informational media on housing and lifestyles Beauty media based on the theme of “finding your ideal self” Outing and travel media based on the theme of “making every day fun” Notes: • The above is a list of main media brands operated by GREE as o
Slide 30: Coin Consumption (1)
3. Appendix Coin Consumption (1) Overall coin consumption (1) Overall coin consumption (2) Billions of coins Billions of coins 250 25.0 22.9 250 25.0 22.9 21.5 21.5 1.9 20.0 20.0 18.5 18.4 2.2 5.3 18.5 18.4 1.7 5.8 2.9 2.5 7.1 5.0 7.7 6.8 7.5 7.0 125 12.5 125 8.4 12.5 8.9 17.7 15.7 15.0 13.9 11.5 11
Slide 31: Coin Consumption (2)
3. Appendix Coin Consumption (2) Native Games Web games Billions of coins Billions of coins 150 15.0 13.9 150 15.0 1.3 11.5 11.5 11.9 10.9 1.5 1.1 9.9 9.0 8.5 7.5 6.9 7.5 75 6.7 75 6.3 7.5 5.2 2.1 12.6 4.7 4.5 2.5 10.4 10.0 5.4 4.1 4.9 4.6 4.7 4.3 4.0 0 0 2Q 3Q 4Q 1Q 2Q 2Q 3Q 4Q 1Q 2Q FY17 FY18 FY17
Slide 32: 2Q FY18 Cost Structure
3. Appendix 2Q FY18 Cost Structure Millions of yen FY18 FY18 FY17 2Q 1Q 2Q QoQ YoY Rental charges 766 -196 4 963 762 Labor costs 1,977 -105 -141 2,082 2,119 Others 5,036 -9 2,905 5,045 2,132 Cost of sales 7,780 -311 2,767 8,090 5,013 Advertising 1,431 -897 366 2,328 1,065 Commission fees 4,310 -728
Slide 33: 2Q FY18 Balance Sheet
3. Appendix 2Q FY18 Balance Sheet Billions of yen FY18 FY18 FY17 2Q QoQ YoY 1Q 2Q Current assets 96.03 0.37 -5.10 95.66 101.13 Fixed assets 27.36 0.32 2.09 27.04 25.27 Total assets 123.39 0.70 -3.02 122.69 126.41 Current liabilities 11.39 -1.64 -2.40 13.03 13.79 Fixed liabilities 0.59 0.05 -0.86 0.5
Slide 34: Breakdown of Group Headcount
3. Appendix Breakdown of Group Headcount Number of employees Headcount at Group companies end-2Q Game/Entertainment Business - 915 Native Game Business Pokelabo, Wright Flyer Studios (382) Web Game / Operation Business funplex (276) Shared game depts. ExPlay (257) Advertising and Media Business Incl
Slide 35: Forward-looking statements notice
■ This document includes some forecasts, which are based on currently available information. Actual performance may differ due to various factors. ■ When p roduc in g th is docu ment , we were ca refu l t o avoid er rors or omiss ion s, b ut th e accuracy and completeness of the provided informat io