Slide 1: FY2016 First Quarter Financial Results
GREE, Inc. FY2016 First Quarter Financial Results October 29, 2015 Copyright © GREE, Inc. All Rights Reserved.
Slide 2: Executive Summary
Executive Summary QoQ profit growth achieved with operating income of Financial Results ¥4.4 billion Overview ⁃ Reduced fixed costs and implemented strict cost control through efficient deployment of advertising costs Domestic native game coin consumption reached its highest level in the past ye
Slide 3: Contents
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 4: Contents
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 5: FY16 1Q Financial Results Overview
1. Financial Results Overview (Consolidated) FY16 1Q Financial Results Overview Net sales ¥19.3bn, operating income ¥4.4bn Billions of yen FY16 1Q FY15 4Q FY15 1Q QoQ YoY Net sales 19.31 -1.61 -6.11 20.92 25.42 EBITDA 4.75 -0.36 -3.26 5.11 8.01 Operating income 4.39 0.17 -1.99 4.21 6.38 Ordinary inc
Slide 6: Net Sales, EBITDA, and Operating Income
1. Financial Results Overview (Consolidated) Net Sales, EBITDA, and Operating Income Operating margin improved by 2.6 percentage points to 22.7% Billions of yen 300 30% 30 25.42 25.1% 24.12 21.99 22.3% 22.7% 20.92 20.1% 19.6% 19.31 200 20 20% 100 10 10% 8.01 6.38 6.18 6.01 4.73 4.91 5.11 4.75 4.39 4
Slide 7: Operating Income Analysis
1. Financial Results Overview (Consolidated) Operating Income Analysis Operating income increased by ¥0.17 billion due to lower costs Billions of yen ¥0.17bn Increase 4.21 42.1 -1.61 ▲16.1 ＋1.07 +10.7 4.39 43.9 +7.2 ＋0.72 Operating Decrease Decrease Decrease Operating Income in net sales in variable
Slide 8: FY16 1Q Cost Structure
1. Financial Results Overview (Consolidated) FY16 1Q Cost Structure Total costs decreased by ¥1.8 billion to ¥14.9 billion Billions of yen FY16 FY15 FY15 Factors in change（QoQ） 1Q QoQ YoY 4Q 1Q Limited mass-media promotion costs Advertising 1.21 - 0.52 - 1.69 (ratio to net sales: 4Q 8.3% → 1Q 6.3%)
Slide 9: Revising 1H Earnings Forecast
1. Financial Results Overview (Consolidated) Revising 1H Earnings Forecast New forecast raised to net sales of ¥3.7bn, operating income of ¥7.0bn Billions of yen Initial 1H New 1H forecast 2Q 1Q results forecast Difference (Announced forecast QoQ August 5) Net sales 37.0 +0.5 36.5 17.7 -1.6 19.3 Ope
Slide 10: Contents
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 11: Review and Summary of 1Q
2. Operational Overview: Summary Review and Summary of 1Q Business Plan Review Launch new titles and • Made progress in developing 1st party Japan titles to be released in 2H generate hit Native titles • Improved KPIs for LINE TOWER RISING game business • Made progress in reducing fixed costs Over-
Slide 12: FY16 Native Game Pipeline
2. Operational Overview: Summary FY16 Native Game Pipeline Two new titles released, currently 14 titles in development pipeline Already Market released 2Q 2H Fatal Seeker (co-developed) Approx. 2 Approx. 6 titles titles Japan 1st party: 0 title 5 titles Co-developed: 2 titles 1 titles FY16 Approx. C
Slide 13: Native Games (Japan) Progress Made
2. Operational Overview: Native Games (Japan ) Progress Made Coin Consumption Topics Billions of coins Naruto: Shinobi Collection Shippu 60 Ranbu driving coin consumption 6 growth 4.9 • Reached No. 7 rank in AppStore sales 4.7 4.7 4.7 4.4 Shometsu Toshi contributed to earnings as functionality w
Slide 14: New Titles (1)
2. Operational Overview: Native Games (Japan ) New Titles (1) memories of the Blue, nominated for three awards at the Tokyo Game Show, is scheduled for release in the winter of 2015 Developed by an elite team of content creators and voice actors, memories of the Blue features the best 2D belt scroll
Slide 15: New Titles (2)
2. Operational Overview: Native Games (Japan ) New Titles (2) Co-developed titles to be released this winter Guardian Clash Soul Arms 3D battle RPG features spectacular battles Players strive to become the ultimate warrior in a 3D arena while challenging players to in thus full-blown action RPG feat
Slide 16: Titles in Development
2. Operational Overview: Native Games (Japan ) Titles in Development Titles in development to be launched after 2H announced at Tokyo Game Show A Farewell to Arms Another Eden Honya-rara-MAGIC♪ Players feel the thrill of Players soar through space Schoolgirl-themed RPG trouncing their enemies in and
Slide 17: Native Games (Overseas) Progress Made
2. Operational Overview: Native Games (Overseas) Progress Made Coin Consumption Topics Billions of coins Halted decline in monthly coin 60 consumption 6 5.7 5.5 5.2 • July-September trends were firmer than in June 4.3 3.9 Progress made in reducing fixed costs • Labor costs and depreciation costs
Slide 18: Titles in Development
2. Operational Overview: Native Games (Overseas) Titles in Development Knights & Dragons League of War (European version) (next-gen version) Following the European version of WoN, we We are developing a new title based on the plan to release a European version of K&D League of War engine that allows
Slide 19: Web Games Progress Made
2. Operational Overview: Web Games Progress Made Coin Consumption Topics Billions of coins Maintained profitability by improving 300 30 management efficiency and controlling 26.1 24.5 costs 21.7 • Reduced number of servers 18.8 • Shifted to offshore operations in 16.8 Vietnam 15 150 Progress in
Slide 20: New Titles
2. Operational Overview: Web Games New Titles Development of new IP- Multiplatform Development based titles Pirate Kingdom Columbus Z Danmachi X.I CONCRETE REVOLUTIO Silbird QUOLIO g lo o p s ©Fujino Omori-SB Creative Corp/Danmachi Project ©BONES:Sho Aikawa/Concrete Revolutio Production Committee •
Slide 21: New Businesses Progress Made
2. Operational Overview: New Businesses Progress Made Increased orders at Doubled number of Lespas Renoco affiliate studios Online renovation service Lesson free pass service 800 Up studios 130% 300 studios FY15 4Q FY15_4Q FY16 1Q FY16_1Q FY15 End-4Q4Q末 FY15 FY15_4Q FY16 End-1Q1Q末 FY16 FY16_1Q • Ord
Slide 22: Contents
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 23: Coin Consumption (1)
3. Appendix Coin Consumption (1) Overall coin consumption Web game coin consumption Billions of coins Billions of coins 400 40 300 30 36.3 34.8 26.1 24.5 31.3 9.4 21.7 8.5 27.9 7.3 25.7 10.7 18.8 10.4 5.9 16.8 5.2 9.1 20 200 15 150 7.8 16.7 16.0 7.0 14.4 13.0 11.7 15.4 14.0 12.7 11.0 9.9 10.2 10.4 9
Slide 24: Coin Consumption (2)
3. Appendix Coin Consumption (2) Overseas Japan Millions of U.S. dollars Billion coins 60 40 400 53 49 30.8 44 29.1 26.1 35 23.6 32 14.7 21.7 14.4 30 29 200 12.7 11.8 10.7 16.1 14.8 13.4 11.8 11.0 0 0 1Q 2Q 3Q 4Q 1Q 1Q 2Q 3Q 4Q 1Q FY15 FY16 FY15 FY16 Notes: • Divided by region of consumption ■Third-
Slide 25: FY16 1Q Cost Structure
3. Appendix FY16 1Q Cost Structure Millions of yen FY16 FY15 FY15 1Q 4Q 1Q QoQ YoY Rental charges 899 -324 -48 1,223 947 Labor costs 2,682 -226 -255 2,909 2,937 Others 1,590 -649 -714 2,239 2,304 Cost of sales 5,172 -1,199 -1,017 6,371 6,188 Advertising 1,212 -516 -1,692 1,729 2,904 Commission fees
Slide 26: FY15 4Q Balance Sheet
3. Appendix FY15 4Q Balance Sheet Billions of yen FY16 FY15 FY15 1Q QoQ YoY 4Q 1Q Current assets 88.31 -8.58 -2.08 96.89 90.39 Fixed assets 21.02 0.27 -33.94 20.75 54.96 Total assets 109.33 -8.31 -36.02 117.64 145.34 Current liabilities 13.71 -8.18 -13.64 21.89 27.35 Fixed liabilities 0.70 -0.03 -2.
Slide 27: Breakdown of Group Headcount
3. Appendix Breakdown of Group Headcount Number of employees Headcount at Group companies End-1Q Japan Game Business - 885 Native Game Business Pokelabo, Wright Flyer Studios (519) Web Game Business - (231) Shared game depts. - (135) Includes GREE International (U.S. Studio), GREE Native Game Busine
Slide 28: 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