Slide 1: FY2023 Fourth Quarter Financial Results
GREE, Inc. FY2023 Fourth Quarter Financial Results August 3, 2023 Copyright © GREE, Inc. All Rights Reserved.
Slide 2: Executive Summary
Executive Summary ◼ Net sales ¥75.4 billion, operating income ¥12.5 billion, EBITDA ¥12.8 billion ⁃ Achieved YoY growth in sales and income ▪ In the Game and Anime Business, we developed IP and made progress with global distribution Full- with a focus on Heaven Burns Red year ▪ In the Metaverse Busi
Slide 3: Changes to Reportable Segments
Changes to Reportable Segments ⁃ To improve understanding of the GREE Group's businesses, the four businesses previously included in the Internet and Entertainment Business segment have been reclassified as separate reportable segments ⁃ The name of the Investment and Incubation Business was changed
Slide 4: Contents
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 5: Contents
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 6: FY23 Financial Results Overview
1. Financial Results Overview (Consolidated) FY23 Financial Results Overview Net sales ¥75.4 billion, operating income ¥12.5 billion, EBITDA ¥12.8 billion Billions of yen FY23 full-year FY23 4Q FY22 FY23 3Q YoY QoQ full-year Net sales 75.44 0.53 +1% 20.12 -2.03 -9% 74.91 22.15 Operating income 12.50
Slide 7: Net Sales and Operating Income
1. Financial Results Overview (Consolidated) Net Sales and Operating Income Results in the Game and Anime Business were somewhat weak on a reactionary decline from anniversary events held for Heaven Burns Red, but companywide results remained strong due to earnings contribution from the Investment B
Slide 8: Sales and Operating Income by Segment
1. Financial Results Overview (Consolidated) Sales and Operating Income by Segment Billions of yen FY22 FY23 QoQ YoY 4Q 1Q 2Q 3Q 4Q Game and Sales 16.93 12.88 12.16 15.85 12.77 -3.08 -19% -4.16 -25% Anime Operating income 3.61 1.88 1.65 2.06 2.06 -0.00 -0% -1.55 -43% Sales 1.48 1.69 1.64 1.52 1.82 0
Slide 9: 4Q Operating Income Analysis
1. Financial Results Overview (Consolidated) 4Q Operating Income Analysis Despite a reactionary decline in sales from anniversary events held for Heaven Burns Red, we posted operating income of roughly ¥5.0bn on a decline in expenses such as advertising costs and contribution from the Investment Bus
Slide 10: 4Q Cost Structure
1. Financial Results Overview (Consolidated) 4Q Cost Structure Total costs declined by ¥2.8bn to ¥15.2bn due to lower variable costs (especially advertising costs) Billions of yen FY23 FY23 FY22 Factors in change（QoQ） 4Q QoQ YoY 3Q 4Q Advertising 1.36 -1.72 0.17 Reactive decline following anniversar
Slide 11: Year-end Dividend
1. Financial Results Overview (Consolidated) Year-end Dividend Planned dividend of ¥11 per share in line with our dividend distribution policy Dividend Distribution Policy Maintain DOE of 2.0%, consolidated dividend payout ratio of 20% or higher FY23 Forecast FY22 Results Dividend record date June 3
Slide 12: Contents
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 13: Medium and Long-term Growth
2. Operational Overview: Medium and Long-Term Plan Medium and Long-term Growth Targeting discontinuous growth of the entire GREE Group via expansion of our stable business foundation and growth in the Metaverse Business and the Game and Anime Business Metaverse Business Strong global growth Game and
Slide 14: Business Plan Summary
2. Operational Overview: FY24 Business Plan Business Plan Summary Business Plan Summary Make progress in reforming ⁃ Strengthen efforts to steadily improve business portfolio profitability over the medium Overall our profit structure term “Game engine, IP, and global” strategies ⁃ Strengthen and ree
Slide 15: Earnings Forecast by Segment
2. Operational Overview: FY24 Business Plan Earnings Forecast by Segment Billions of yen FY23 FY24 1Q FY24 Full-year FY23 4Q Full-year Forecast QoQ Forecast YoY Result Result Game and Sales 11.0-12.0 -1.8 – -0.8 -14% – -6% 41.0-45.0 -13.0 – -9.0 -24% – -17% 12.8 53.7 Anime Operating 1.0-1.5 -1.1 – -
Slide 16: Game and Anime Business
Game and Anime Business Senior Vice President Yuta Maeda Copyright © GREE, Inc. All Rights Reserved.
Slide 17: Sales and Operating Income
2. Operational Overview: Game and Anime Business Sales and Operating Income Sales and income down QoQ on reactive decline following one-year anniversary promotions of Japanese version of Heaven Burns Red Sales and Operating Income Focus Points Billions of yen ◼ Heaven Burns Red 169.3 158.5 ⁃ Compara
Slide 18: FY23 Topics
2. Operational Overview: Game and Anime Business FY23 Topics Earning growth and progress in development/strengthening of IP on one-year anniversary promotions, overseas releases of Heaven Burns Red (initial release in FY22) Strong performance from Heaven Burns Red Development and strengthen of IP On
Slide 19: Future Business Plan: Create, Sustain and Develop IPs
2. Operational Overview: Game and Anime Business Future Business Plan: Create, Sustain and Develop IPs Aiming to establish a cycle of extended profit contribution and profit maximization via creation and sustained support of IPs from console games and anime and development of IPs from smartphone gam
Slide 20: Future Business Plan: Strengthen Overseas Development
2. Operational Overview: Game and Anime Business Future Business Plan: Strengthen Overseas Development Aiming to further increase our overseas sales ratio by accelerating efforts in overseas markets with larger scales and higher growth rates than the Japanese market Comparison of Japanese and Applic
Slide 21: Future Business Plan: Multilayered New Development (1)
2. Operational Overview: Game and Anime Business Future Business Plan: Multilayered New Development (1) Promote and strengthen the development of 1st-party IP titles, joint development, licensing, etc. across multiple regions and on multiple platforms Strengthening earnings foundation Achievements O
Slide 22: Future Business Plan: Multilayered New Development (2)
2. Operational Overview: Game and Anime Business Future Business Plan: Multilayered New Development (2) Promote and strengthen the development of 1st-party IP titles, joint development, licensing, etc. across multiple regions and on multiple platforms Distribution started in July 2023 Scheduled for
Slide 23: Pipeline
2. Operational Overview: Game and Anime Business Pipeline Make progress on strengthening and rebuilding our pipeline in order to constantly release new titles In-house Regional Joint Licensing to other development expansion development companies 4 7 4 2 Notes: ● Number of titles scheduled for releas
Slide 24: Earnings Forecast
2. Operational Overview: Game and Anime Business Earnings Forecast We forecast QoQ declines in sales and income in 1Q FY24 on a reactive decline following anniversary promotions for mainstay titles in 4Q FY23. As we factor in no contribution from new titles, we also forecast a decline in income in F
Slide 25: Medium-term Targets
2. Operational Overview: Game and Anime Business Medium-term Targets We continue to factor in conservative sales estimates owing to the possibility that revenue contribution periods may be limited, but we believe our pre- and post-launch cost outlook is realistic Billions of yen 60.3 53.7 53.8 41.0-
Slide 26: Metaverse Business
Metaverse Business Senior Vice President Eiji Araki Copyright © GREE, Inc. All Rights Reserved.
Slide 27: Sales and Operating Income
2. Operational Overview: Metaverse Business Sales and Operating Income Sales rose and income declined QoQ on investment in global marketing for REALITY and stronger investment in the VTuber Business Sales and Operating Income Focus Points Billions of yen 1.82 ◼ Platform Business 8.6%1.69 7.9%1.64 1.
Slide 28: FY23 Topics
2. Operational Overview: Metaverse Business FY23 Topics Shifted to a diversified structure wherein the Metaverse Business operates four businesses. Made progress on global expansion of the Platform Business and the launch of the VTuber Business. Shifted to 4-business, 4-subsidiary structure Aggressi
Slide 29: Future Business Plan: Platform Business
2. Operational Overview: Metaverse Business Future Business Plan: Platform Business Make progress in localization of operations to match regional norms in order to increase profitability in overseas markets while maintaining a high ratio of overseas users Opportunities for growth in Efforts to incre
Slide 30: Future Business Plan: B2B Metaverse Business
2. Operational Overview: Metaverse Business Future Business Plan: B2B Metaverse Business REALITY is a “Metaverse filled with people”, boasting over 74 million users per year and we continue to strengthen our product and alliances as we aim to be the top metaverse for B2B commerce Continue to strengt
Slide 31: Future Business Plan: VTuber Business
2. Operational Overview: Metaverse Business Future Business Plan: VTuber Business Moving forward with the simultaneous launch of four unique production companies in Japan and overseas, securing an abundance of talent to serve as a launch pad for earnings, and targeting sales growth Portfolio of prod
Slide 32: Earnings Forecast
2. Operational Overview: Metaverse Business Earnings Forecast While we forecast continued steady earnings growth from the Platform Business and the B2B Metaverse Business, we expect the Metaverse Business as a whole to remain around breakeven level in terms of operating earnings as the VTuber Busine
Slide 33: Medium-term Targets
2. Operational Overview: Metaverse Business Medium-term Targets Steady profit growth expected to continue in the Platform Business and the B2B Metaverse Business, with operating income expected to reach ¥1.9bn in FY26 15.2 Billions of yen CAGR 23％ 8.1 6.7 5.2 1.9 -0.3 -0.3 -0.2 FY22 FY23 FY24 FY26 S
Slide 34: DX Business
DX Business Vice President Kazuhisa Adachi Copyright © GREE, Inc. All Rights Reserved.
Slide 35: Sales and Operating Income
2. Operational Overview: DX Business Sales and Operating Income Sales and income declined QoQ due to the completion of a large-scale marketing DX project and the construction of an operations DX system Sales and Operating Income Focus Points Billions of yen 1.46 1.44 ◼ Marketing DX Business 1.27 1.2
Slide 36: FY23 Topics
2. Operational Overview: DX Business FY23 Topics We are integrating our group B2B businesses and our advertising and customer service functions into the DX Business to create an integrated one-stop service provider and also steadily increasing the number of DX support projects Increasing the number
Slide 37: Future Business Plan: DX Business as a Whole
2. Operational Overview: DX Business Future Business Plan: DX Business as a Whole Encourage business growth by providing clients implementing DX with the business expansion and business protection functions developed by the GREE Group SNS and browser games Smartphone games Metaverse Commerce Marketi
Slide 38: Future Business Plan: Marketing DX Business
2. Operational Overview: DX Business Future Business Plan: Marketing DX Business Achievement of meaningful results and lateral deployment to other industries by providing marketing DX functions that support sales growth Expansion of client base Pursue alliances Infrastructure Finance Future Advertis
Slide 39: Future Business Plan: Operational DX Business
2. Operational Overview: DX Business Future Business Plan: Operational DX Business Expand the range of business protection functions developed by the GREE Group such as quality assurance and patrolling and provide them to clients in growth industries such as metaverse and Web3 Expansion of service p
Slide 40: Earnings Forecast
2. Operational Overview: DX Business Earnings Forecast Our earnings base has shrunk owing to the completion of a large-scale project. Preparing for re-growth by expanding the Operational DX business. 1Q FY24 Full-year FY24 Billions of yen Billions of yen 1.46 1.44 5.7 1.29 1.25 1.3 5.4 22.3% 19.3% 1
Slide 41: Medium-term Targets
2. Operational Overview: DX Business Medium-term Targets Strengthen upside with new solutions for the Operational DX Business, while ensuring above-industry growth in the Marketing DX Business. Operating income is expected to reach ¥1.2bn in FY26. 7.9 CAGR Billions of yen 11％ 5.7 5.4 5.0 CAGR 1.2 1.
Slide 42: Commerce Business
Commerce Business Vice President Yosuke Nakamura Copyright © GREE, Inc. All Rights Reserved.
Slide 43: Sales and Operating Income
2. Operational Overview: Commerce Business Sales and Operating Income Despite continued stable growth from the aumo My Business in-store marketing SaaS, sales and income declined QoQ owing to the strategic pivot in the Media Business Sales and Operating Income Focus Points Billions of yen 0.36 0.35
Slide 44: FY23 Topics
2. Operational Overview: Commerce Business FY23 Topics Made progress with our media and SaaS strategies and achieved steady growth in MAU of our mainstay media aumo; steadily increased number of paid aumo My Business member stores and successfully shifted to a stable business model aumo MAU aumo My
Slide 45: Future Business Plan: Commerce Business as a Whole
2. Operational Overview: Commerce Business Future Business Plan: Commerce Business as a Whole Leveraging the knowhow gained by transforming and expanding the aumo, Inc. business model in the field of human resources and targeting even more rapid growth in the Commerce Business as a whole Outings HR
Slide 46: Future Business Plan: aumo, Inc.
2. Operational Overview: Commerce Business Future Business Plan: aumo, Inc. Pursuing our “Media and SaaS” strategy and leveraging our 17 million MAU media capability to expand our user base; aiming to strengthen our stable business foundation by increasing the number of paid-member stores, driven by
Slide 47: Future Business Plan: jobda, inc.
2. Operational Overview: Commerce Business Future Business Plan: jobda, inc. Focusing on initial business development in the area of recruitment media, leveraging SEO knowhow gained via aumo, Inc. and our development resources to enhance media capabilities ◼ Strengthening media capabilities HR ⁃ Foc
Slide 48: Earnings Forecast
2. Operational Overview: Commerce Business Earnings Forecast Although we expect steady growth from aumo, Inc., especially in the SaaS Business, due to initial startup investments in jobda, inc., we expect earnings in the Commerce Business as a whole to remain around the breakeven level 1Q FY24 Full-
Slide 49: Medium-term Targets
2. Operational Overview: Commerce Business Medium-term Targets Despite a stable sales growth forecast centered on SaaS growth at aumo, Inc., due to investments in the medium- and long-term growth of jobda, inc., operating income is expected to be ¥0.4bn in FY26 Billions of yen 3.3 CAGR 48％ 1.4 1.5 1
Slide 50: Investment Business
Investment Business Senior Vice President, Chief Financial Officer Toshiki Oya Copyright © GREE, Inc. All Rights Reserved.
Slide 51: Sales and Operating Income
2. Operational Overview: Investment Business Sales and Operating Income Stable profit contribution due to strong distributions from investment funds, continuing from the previous quarter Sales and Operating Income Focus Points Billions of yen 4.09 ◼ Major Distributions (from fund investments) 3.41 ⁃
Slide 52: Overview of Total Assets Under Management (AUM)
2. Operational Overview: Investment Business Overview of Total Assets Under Management (AUM) Total AUM: 80.7 billion, up ¥5.7 billion QoQ on revaluations etc. Total AUM Main investments Billions of yen Based on investee valuation Fund Investments +12.8 80.7 75.0 +1.9 -9.0 Fund Investment Increase by
Slide 53: Strengthening Investment
2. Operational Overview: Investment Business Strengthening Investment Operational investment securities investment valuation of ¥29.0 billion, unrealized value remains high Quarterly change in operational investment securities investment valuation Investment status in 4Q Billions of yen Book value V
Slide 54: Status of Investment Results
2. Operational Overview: Investment Business Status of Investment Results Achieved high long-term returns on fund investments and startup investments Valuation of investments by investment period Net multiples, IRR Billions of yen Investment Results of GREE Performance Benchmarking of Domestic VC 15
Slide 55: Future Business Plan
2. Operational Overview: Investment Business Future Business Plan Continue to invest in VC funds and startups Business operation system Expect stable profit ◼ Investing in startups and in major Japanese and ◼ We expect stable profit contribution over the overseas VC funds that invest in the IT and m
Slide 56: Contents
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 57: Strong performance from Heaven Burns Red
3. Appendix: FY23 4Q Progress of the Game and Anime Business Strong performance from Heaven Burns Red Energized users by adding main content and anniversary campaign Added content 500-day anniversary campaign • Began distribution of Part 2 of Chapter 4 of • Held campaign including 500-day anniversar
Slide 58: Platform Business
3. Appendix: FY23 4Q Progress of the Metaverse Business Platform Business Made progress in development for REALITY by hosting offline events overseas to energize the user community and releasing new features to provide a safer and more secure user experience Held offline events overseas Strengthened
Slide 59: B2B Metaverse Business
3. Appendix: FY23 4Q Progress of the Metaverse Business B2B Metaverse Business Leveraged the scale of the REALITY user base to provide metaverse venues to various corporations, Continued to achieve good results as a “metaverse filled with people” Metaverse recruiting event for Gen Z METAVERSE EXPO i
Slide 60: VTuber Business
3. Appendix: FY23 4Q Progress of the Metaverse Business VTuber Business Made progress in the parallel launch of multiple VTuber agencies and simultaneous domestic and overseas development. Aim to capture a share of the growing global VTuber market. Established Specialite FIRST STAGE PRODUCTION Simul
Slide 61: Marketing DX Business
3. Appendix: FY23 4Q Progress of the DX Business Marketing DX Business Strengthened marketing support for businesses using short videos Glossom collaborated with One Acre QUANT, Inc. launched new service to support TikTok content creation Pay-for-Performance Live Commerce Casting, content creation,
Slide 62: Commerce Business as a Whole
3. Appendix: FY23 4Q Progress of the Commerce Business Commerce Business as a Whole Released foreign language versions of aumo and started global expansion, established a new HR business company, jobda, inc. Started global distribution Established jobda, inc. English, Simplified Chinese, Traditional
Slide 63: 4Q FY23 Cost Structure
3. Appendix 4Q FY23 Cost Structure Billions of yen FY23 FY23 FY22 4Q QoQ YoY 3Q 4Q Rental charges 0.57 -0.00 -0.05 0.57 0.63 Labor costs 2.25 -0.06 -0.16 2.30 2.41 Others 4.03 -0.71 -0.98 4.74 5.01 Cost of sales 6.84 -0.77 -1.20 7.61 8.04 Advertising 1.36 -1.72 0.17 3.08 1.19 Commission fees 3.41 -0
Slide 64: 4Q FY23 Balance Sheet
3. Appendix 4Q FY23 Balance Sheet Billions of yen FY23 FY23 FY22 4Q QoQ YoY 3Q 4Q Current assets 107.4 4.9 7.2 102.4 100.2 Fixed assets 17.4 -0.2 0.9 17.6 16.5 Total assets 124.8 4.8 8.1 120.0 116.7 Current liabilities 20.4 4.4 4.4 16.0 16.0 Fixed liabilities 11.9 -5.0 2.0 16.9 9.8 Total liabilities
Slide 65: Group Headcount
3. Appendix Group Headcount Number of employees 1,616 1,632 1,618 1,670 1,593 4Q 1Q 2Q 3Q 4Q FY22 FY23 Notes: ● Includes non-consolidated group companies; as of the end of each quarter 65 Copyright © GREE, Inc. All Rights Reserved.
Slide 66: This document includes forecasts, which are based on currently available information. Actual performance may
◼ This document includes 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 guaranteed.