Gunosy, Inc. · TSE:6047
Gunosy — FY2020/5 Earnings Presentation
50 slides from Gunosy's earnings presentation, Jul 14, 2020
Slide 1: FY2020/5 Financial Results
FY2020/5 Financial Results Gunosy Inc. First Section of The Tokyo Stock Exchange (Stock Code: 6047) July 14, 2020
Slide 2: INDEX
INDEX Financial Results for FY2020 1 Financial Results for FY2020/5 P4 FY2021 Outlook 2 FY2021/5 Policy and Outlook P 10 Business Overview of Media Business 3 Overview of Media Business P 25 Business Overview of Ad Business 4 Overview of Advertising Business P 33 New Business 5 Progress of New Busin
Slide 3: Executive Summary
Executive Summary W hile “MAU an d DAU” marked g ro w th in F Y2020/ 5 due t o aggr essive invest m ent f or 1 “ r egr owt h of G unos y ” , t her e wer e i ssu es w i t h p ro f i t ab i l i t y. Sales in Q 4 r ecor ded a shar p dr op bot h Q onQ and YonY due t o 2 t he det er ior at ion of t he ad
Slide 4: Financial Results for FY2020/5
1 Financial Results for FY2020/5 Section 1 （C） Gunosy Inc. All Rights Reserved.
Slide 5: FY2020/5 Consolidated Results (On a YonY comparison)
FY2020/5 Consolidated Results (On a YonY comparison) Sales and profits declined due to the renewal of advertising guidelines and the deterioration in the advertising market caused by the spread of the new coronavirus. Meanwhile, the operating margin improved YonY in Q4 due to flexible cost reduction
Slide 6: FY2020/5 Consolidated Results (Compared to the Plan)
FY2020/5 Consolidated Results (Compared to the Plan) Sales were almost in line with the revised full-year forecast announced on April 14, 2020. Operating profit was 86.0% of the plan, despite thorough cost-cutting efforts including (1) advertising expenses, (2) live video production expenses and (3)
Slide 7: Total Number of Active Users
*1 Total Number of Active Users In Q4 we significantly reduced our advertising expenses. As a result, MAU declined QonQ, but in *2 line with increased activation of users due to "stay home", DAU remained at a high level in Q4 and achieved the target (double-digit growth YonY) announced in July 2019
Slide 8: Breakdown of Net Sales
*1 Breakdown of Net Sales Gunosy Ads recorded a sales decline of approximately 20% QonQ, mainly due to deterioration in the advertising market conditions caused by the new coronavirus. ADNW marked a sales decline of approximately 60% due to a decline in market share resulting from the renewal of adv
Slide 9: Cost Structure
Cost Structure In Q4, considering the deterioration of market conditions and DAU upturn due to stay-home, advertising expenses were significantly reduced.Of the 560 million yen in personnel expenses, 25 million yen was due to the consolidation of Smarprise. Personnel costs (535 million yen excluding
Slide 10: FY2021/5 Policy and Outlook
2 FY2021/5 Policy and Outlook Section 2 （C） Gunosy Inc. All Rights Reserved.
Slide 11: Overall Summary
Overall Summary In light of the drastic change in the business environment due to the impact of the new coronavirus, we have reviewed our company-wide medium- and long-term policies, including the management structure. We succeeded in expanding the user base of Gunosy through 1 Summary of FY2020/5 a
Slide 12: Summary of FY2020/5
1 Summary of FY2020/5 Summary of FY2020/5 It was a year of aggressive investment in "Gunosy". As a result, we succeeded in expanding the user base. Meanwhile, CPM was sluggish, mainly due to the new coronavirus. It is an urgent issue to improve profitability. Investment Results in Gunosy Summary of
Slide 13: Impact and Outlook of the New Coronavirus
2 Impact and Impact and Outlook of the New Coronavirus Outlook of the New Coronavirus The advertising market may not achieve recovery in the short term and we are aware that we need to run our business on the assumption that current situation will continue for the medium term. Meanwhile, we see this
Slide 14: Basic Premises of the Business Policy for Medium- to Long-Term Growth
3 Basic Premises of the Business Policy for Review of Medium- to Long-term Policy Medium- to Long-Term Growth Past policy Focus on regrowth of media business, mainly Gunosy (Currently, the return on investment in the media business has deteriorated due to the impact of (Before Corona) the new corona
Slide 15: Summary of Business Policy
3 Review of Medium- Summary of Business Policy to Long-term Policy Existing area New area Advertising Media business business New business Investment News Game８ business Gunosy LUCRA ADNW Otokul GTL Pass (overseas) Sow the seeds for new businesses Invest in domestic Aggressively invest in the media
Slide 16: Business Policy: (1) Media (2) Advertising
3 Business Policy: (1) Media Review of Medium- to Long-term Policy (2) Advertising In FY2020/5, while we expanded the user scale centering on Gunosy, improvement of profitability remains an issue. In FY2021/5, we will focus on improving media and advertising value to improve profitability. Grand pol
Slide 17: Business Policy: (3) New Business
3 Review of Medium- Business Policy: (3) New Business to Long-term Policy We will actively invest in growth opportunities centered on the DX domain and aim at creating new earnings drivers. Grand policy Individual policy • Promote overseas business • Strategic use of data • Expand the solution menu
Slide 18: Business Policy: (4) Investment Business
3 Review of Medium- Business Policy :(4) Investment Business to Long-term Policy To capture promising growth opportunities that go beyond the media and advertising areas, we plan aggressive external investment of up to 4.5 billion yen over the next two years. Approximate Outline of Investment amount
Slide 19: Management Structure
4 Strengthen Management Structure Management Structure In order to respond to changes in social conditions triggered by the spread of the new coronavirus and to promote business more boldly and proactively, we strengthened our leadership by adding Kimura Shinji as a representative director, who is v
Slide 20: Financial Structure
5 Strengthen Financial Financial Structure Base We have built a very strong financial base, with ample cash and free of debt. B/S as of 5/31/2020 (In million yen) Cash obtained by Unused commitment commitment lines lines Execute commitment line [Current assets] 10,676 In Q4, we concluded [Liabilitie
Slide 21: Cost reduction (Existing Businesses)
5 Strengthen Financial Cost reduction (Existing Businesses) Base We will promote cost reduction to achieve a lean PL structure. (1) Control advertising expenses • FY2020/5: 2,510 million yen à FY2021/5 (expected): 670 million yen (-1,840 million yen) • In the current fiscal year, we will curb invest
Slide 22: Image of Medium- to Long-Term Growth
6 Image of Image of Medium- to Long-Term Growth Medium- to Long- Term Growth In the current fiscal year, we concentrated on rebuilding existing businesses as well as developing and creating new businesses based on a stable financial base. Based on the current conditions, we are considering reviewing
Slide 23: FY2021/5 Forecast (Consolidated)
7 FY2021/5 Forecast FY2021/5 Forecast (Consolidated) Assuming that the deterioration of the advertising market due to the influence of the new coronavirus will not recover in the short term, we expect YonY sales decline. Meanwhile, on a profit basis, we plan to increase profits YonY through thorough
Slide 24: Assumptions for FY2021/5 Forecast
7 FY2021/5 Forecast Assumptions for FY2021/5 Forecast • Both the lower and upper ranges of the forecast are based on the assumption that the advertising market will not recover in the current Impact of the new fiscal year. coronavirus • It is assumed that the increased activation of users under "sta
Slide 25: Overview of Media Business
3 Overview of Media Business Section 3 （C） Gunosy Inc. All Rights Reserved.
Slide 26: Summary of Media Business in Q4
(1) Summary of Media Business in Q4 In Q4, despite significant reduction of advertising expenditures, the DAU of each media remained strong, positively affected by the increase in traffic due to "stay home". Gunosy NewsPass LUCRA Enhance content to support “Corona Action” tab Delivery / takeout info
Slide 27: Media Business Policy for Improved Profitability
(2) Media Business Policy for Improved Profitability We will promote the sound development of media to improve profitability by increasing media value. At the same time, we will work to improve the customer experience through the renewal of the algorithms, to launch new content based on macro trends
Slide 28: Improve Media Reliability
(3) Improve Media Relaiability In order to establish a competitive advantage over the medium to long term, we will promote the enhancement of media value for the benefit of all three sides (buyers, sellers and society) based on our corporate philosophy, "Optimally deliver information to people aroun
Slide 29: Enhance User Experience
(4) Enhance User Experience We will promote development of functions tailored to the user characteristics of each app and expansion of content and services. Gunosy NewsPass LUCRA Started operational test of money-saving Become a trend information Gunosy points that can be kept Improved the UI and UX
Slide 30: Unlimited radio streaming: Joy of Sound
As a Media Company that Provides "Joy of Sound” Set up "radiko" tab and start trial distribution (from July 1, 2020). Quickly respond not only to function to "read" the news but also to "listen to" the news. Enhance user experience Unlimited radio streaming on the smartphone Section 3 （C） Gunosy Inc
Slide 31: Audio content: Joy of Sound
As a Media Company that Provides "Joy of Sound” Audio content achieved a significant increase in total number of views within about a month of its release. Basic KPIs remained solid compared to the existing video content which implies high potential. Total number of views Status of KPI verification
Slide 32: Game8
Game8 Big titles continued to gain PV share. Record-high levels of sales and operating profit were maintained. (Q4 results are for the period from January to March 2020 due to a gap with the parent company's consolidated accounting period.) * Results Recent situation (April-June 2020) Sales and prof
Slide 33: Overview of Advertising Business
4 Overview of Advertising Business Section 4 （C） Gunosy Inc. All Rights Reserved.
Slide 34: Status of Number of Advertisers
Status of Number of Advertisers The number of advertisers marked a sharp decline in April due to a renewal of advertising guidelines and a deterioration of advertising market conditions caused by the new coronavirus. Today, the major bottom was hit and is on a gradual recovery. Q4 Number of advertis
Slide 35: Composition of Advertisers
Composition of Advertisers The composition of advertisers has changed significantly in response to the renewal of our advertising guidelines and the deterioration of the advertising market due to the new coronavirus. In order to support a wide range of advertisers, we will promote the media of relia
Slide 36: Ad Network (ADNW)
Ad Network (ADNW) * Both numbers of impressions and CPMs fell due to the impact of the new coronavirus and renewal of advertising guidelines. The decline in impressions is because of a decrease in competitiveness caused by strict advertising examination, resulting in a temporary decrease in market s
Slide 37: Progress of New Business
5 Progress of New Business - New Business: p. 38-44 - Investment business: p. 45-46 Section 5 （C） Gunosy Inc. All Rights Reserved.
Slide 38: Service Status: Otokul
Service Status Investing New Business Business We are creating money-saving consumption experience for our customers with enhanced content for fun and savings. Most recently, we started testing an e-commerce service that is highly compatible with user needs. Content of “Otokul” “Tokumaro Store” prov
Slide 39: Status of KPI
Status of KPI Investing New Business Business We are verifying monetization through advertising revenue. The user loyalty of Otokul is high and the return on investment is good compared to existing media. We will strengthen our investment in the e-commerce area and aim to make Otokul a new source of
Slide 40: Outline of Gunosy Tech Lab
Outline of Gunosy Tech Lab Investing GTL New Business Business Gunosy Tech Lab was established as a specialized organization to study further data utilization and information recommendation. We output research results in the form of our apps provided to users, provision to external companies, and pu
Slide 41: Status of Development of New Businesses
Investing New Business Business GTL Status of Development of New Businesses We will continue activities to monetize our proprietary technologies. On June 30, 2020, a press release issued for Guhack Partner companies Activities are ongoing with each partner. Hakuhodo DY Media Partners Sports Nippon N
Slide 42: Release of Guhack
Release of “Guhack” Investing GTL New Business Business We launched "Guhack", a SaaS platform for optimizing results acquired by TV commercials (Press release on June 30, 2020). A SaaS platform for optimizing results acquired by TV commercials DX business SaaS platform (1) Dashboard for visualizing
Slide 43: Recent Research & Development Theme
Investing New Business Business GTL Recent Research & Development Theme We are promoting research projects through industry-academia partnership and the publication as research papers. Technical theme Recent Works and Publications Impact on Gunosy Improve • Improve personalization logic • Developmen
Slide 44: Implementation image of R&D results
GTL (Reference) Implementation image New Business Investing Business of R&D results We also promote the implementation of research results to realize higher quality media and advertising. Delivering articles Enhancement of Article delivery according to user automatic ad Technologies to be algorithm
Slide 45: Investment Status
GC Investment Status New Business Investing Business So far, we have promoted investment selecting promising stocks under strict investment criteria. Despite the market downturn due to the new coronavirus, our existing investments remained in a sound financial position. Invested in six stocks (total
Slide 46: Recently Invested Stocks
GC/Gunosy Recently Invested Stocks New Business Investing Business In June 2020, we made an additional investment in GaragePreneurs Internet Pvt Ltd. which runs "slice", a cashless payment and digital micro-lending platform for young people in India (previous investment in October 2019). Outline of
Slide 47: Reference Materials: Overview of Gunosy Inc.
APPENDIX 6 Reference Materials: Overview of Gunosy Inc. Section 6 （C） Gunosy Inc. All Rights Reserved.
Slide 48: Overview of Gunosy Inc.
Overview of Gunosy Inc. Basic Information ・Company name: Gunosy Inc. Representative Director and Chairman, ・Officers: Group Chief Executive Officer (CEO), ・Representative: Shinji Kimura Shinji Kimura Representative Director and President, Yuya Taketani Yuya Taketani ・Established: Director, Tetsuya N
Slide 49: Disclaimer
Disclaimer Forward-looking statements contained in these materials are prepared from judgments and assumptions based on information available at the time of preparing the materials, and do not guarantee their accuracy. These materials contain financial data that have not been audited by an independe
Slide 50: Optimally deliver information to people around the world
Optimally deliver information to people around the world