Gree Holdings.inc. · TSE:3632
Gree Holdings.inc — Q2 FY2017 Earnings Presentation
33 slides from Gree Holdings.inc's earnings presentation, Feb 2, 2017
Slide 1: FY2017 Second Quarter Financial Results
GREE, Inc. FY2017 Second Quarter Financial Results February 2, 2017 Copyright © GREE, Inc. All Rights Reserved.
Slide 2: Executive Summary
Executive Summary QoQ sales growth achieved first time in 4 years with net Financial sales of ¥15.3 billion and operating income of ¥1.5 billion Results ⁃ Sales grew due to contribution from native games Overview ⁃ Depreciation costs increased with the acquisition of DragonSoul, as well as with in
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: FY17 2Q Financial Results Overview
1. Financial Results Overview (Consolidated) FY17 2Q Financial Results Overview Net sales ¥15.3bn, operating income ¥1.5bn Billions of yen FY17 2Q FY17 1Q FY16 2Q QoQ YoY Net sales 15.35 0.44 -2.78 14.91 18.13 EBITDA 2.07 -0.64 -2.29 2.71 4.36 Operating income 1.50 -1.04 -2.50 2.54 4.00 Ordinary inc
Slide 6: Net Sales, EBITDA, and Operating Income
1. Financial Results Overview (Consolidated) Net Sales, EBITDA, and Operating Income QoQ net sales growth achieved first time in 4 years to ¥15.3bn Billions of yen 25.0 25.0% 22.1% 21.6% 18.1 16.8 15.6 17.0% 15.3 14.9 14.2% 12.5 12.5% 9.8% 4.4 4.0 4.0 3.6 2.9 2.7 2.5 2.2 2.1 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 ¥1.0bn due to investment in advertising and depreciation costs associated with new title acquisitions Billions of yen ¥1.0bn decrease ＋0.44 -0.68 2.54 -0.80 1.50 Operating Increase Increase Increase Operatin
Slide 8: FY17 2Q Cost Structure
1. Financial Results Overview (Consolidated) FY17 2Q Cost Structure Total costs increased ¥1.5 billion QoQ to ¥13.8 billion Billions of yen FY17 FY17 FY16 Factors in change（QoQ） 2Q QoQ YoY 1Q 2Q Advertising 1.06 0.43 -0.55 Invested in advertising for titles with strong potential 0.63 1.61 Commission
Slide 9: 3Q FY17 Earnings Forecast
1. Financial Results Overview (Consolidated) 3Q FY17 Earnings Forecast Net sales of ¥15.3bn, operating income of ¥1.2bn Billions of yen FY17 2Q FY17 3Q Actual Forecast Difference Net sales 15.3 15.3 0 Operating income 1.5 1.2 -0.3 Ordinary income 3.8 1.2 -2.6 Net income 1.9 0.3 -1.6 Top line - Net
Slide 10: 2. Operational Overview
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 11: Review and Summary of 2Q
2. Operational Overview: Summary Review and Summary of 2Q Business Plan Review Achieve turnaround in game business, • Made progress in development of new native game titles to Overall invest in new be released in 2H businesses • Made final preparations for January release of Rara-MAGI Native Game Ja
Slide 12: Development Pipeline
2. Operational Overview: Game Business, Native Games (domestic market) Development Pipeline Ten titles in development, including four newly added titles FY17 FY18 or later Already To be released released in 2H First-party IP 1 3 0 （3） （0） IP owned by partners 1 4 3 （3） （0） Notes: • All titles in pip
Slide 13: Progress Made: Native Games (Domestic)
2. Operational Overview: Game Business, Native Games (domestic market) Progress Made Coin Consumption Topics Billions of coins Released major update to Shometsu 5 Toshi 2 4.6 4.6 4.4 • Total of 8 million downloads 4.1 • User numbers and coin consumption 3.7 more than doubled Released Rara-MAGI 3
Slide 14: Existing Titles
2. Operational Overview: Game Business, Native Games (domestic market) Existing Titles Growth restarted with Stable operation major update over long term Coin consumption doubled Stable coin consumption, even in 3rd year Stable consumption Up Growth stage 2x 16/10月 October 2016 16/11月 November 2016
Slide 15: New Titles: Rara-MAGI
2. Operational Overview: Game Business, Native Games (domestic market) New Titles Rara-MAGI • Launched on January 25. Off to a smooth start, promotion is fully in progress • Schoolgirl-themed RPG featuring music, magic, and an all-star cast of voice actors created in cooperation with leading Japanes
Slide 16: Titles in Development: Another Eden
2. Operational Overview: Game Business, Native Games (domestic market) Titles in Development Another Eden: The Cat Who Goes Beyond Time • Travel beyond time and space in this full-on RPG featuring an all-star development staff • Release scheduled in this coming Spring Note: Screenshot is of developm
Slide 17: Titles in Development: A Farewell to Arms
2. Operational Overview: Game Business, Native Games (domestic market) Titles in Development A Farewell to Arms • Players feel the thrill of trouncing their enemies in this 3D action game • Under development for closed beta testing Note: Screenshot is of development version 16 Copyright © GREE, Inc.
Slide 18: Titles in Development: Senki Zesshou SYMPHOGEAR XD Unlimited
2. Operational Overview: Game Business, Native Games (domestic market) Titles in Development Senki Zesshou SYMPHOGEAR XD Unlimited • Joint development by Bushiroad and PokeLabo, pre-registration underway • Symphonic battle RPG that faithfully re-creates the world of anime series Senki Zesshou SYMPHO
Slide 19: Progress Made: Native Games (Overseas)
2. Operational Overview: Game Business, Native Games (overseas market) Progress Made Coin Consumption Topics Billions of coins Strong Performance by DragonSoul 4 3.6 • Acquired in October 2016 3.2 Progress in development of new 3D 2.7 game based on first-party IP 2.5 • Release scheduled for 2H 2
Slide 20: Progress Made: Game Operation Business
2. Operational Overview: Game Business, Game Operation Business Progress Made Coin Consumption Topics Billions of coins Began operation of native games 10.0 10 • Naruto: Shinobi Collection Shippu Ranbu - Began operation in November • Guruguru Shokan Magical Gear - Began operation in November 5 4.5
Slide 21: Video Market Operating Environment
2. Operational Overview: New Businesses Video Market Operating Environment Video Ad Market Expected Steady Growth in Video to Grow Viewership Could reach ¥200bn in 2020 Ratings rising sharply for all age categories Billions of yen 2015 85% 291.8 262.5 72% 230.9 192.6 2010 59% 56% 153.0 49% 117.8 42%
Slide 22: Video-related Business Activities
2. Operational Overview: New Businesses Video-related Business Activities Video-related Sales Growth Video-related Business Activities Strong growth of annual monthly sales Accelerating business development Media 3.5x Video Production Advertising December 2015 15/12月 December 2016 16/12月 Note: GREE
Slide 23: Added 3Minute to The Group
2. Operational Overview: New Businesses Added 3Minute to The Group Added to Group in February; accelerating growth in video-related businesses Rapid Sales Growth Expanded operations in second year Total users: Operation of fashion 2mn video media website MINE 5.3x Monthly reach: One of the largest 7
Slide 24: VR Business
2. Operational Overview: New Businesses VR Business GREE and ADORES Team Up to Develop VR Attractions • VR amusement park VR PARK TOKYO opened in Shibuya, December 16th • 2 of the 7 attractions at the facility were developed by GREE VR Studio 23 Copyright © GREE, Inc. All Rights Reserved.
Slide 25: 3. Appendix
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 26: Coin Consumption (1)
Done 3. Appendix Coin Consumption (1) Overall coin consumption Web game coin consumption Billions of coins Billions of coins 30 20 24.0 15.8 22.2 14.7 13.8 4.7 20.1 19.0 12.7 4.2 18.5 11.9 3.7 6.4 3.3 2.9 5.8 5.6 15 10 5.3 11.0 4.9 10.4 10.1 9.4 8.9 9.4 8.8 8.2 7.4 6.9 8.2 7.6 6.4 6.3 6.7 0 0 2Q 3Q
Slide 27: Coin Consumption (2)
3. Appendix Coin Consumption (2) Japan Native Games Overseas Native Games Billions of coins Billions of coins 5 4 4.6 4.6 4.4 3.6 4.1 3.2 3.7 2.7 2.5 3 2 1.7 0 0 2Q 3Q 4Q 1Q 2Q 2Q 3Q 4Q 1Q 2Q FY16 FY17 FY16 FY17 ・Coin consumption declined temporarily owing to the Note: Classified by area of developm
Slide 28: Coin Consumption (3)
3. Appendix Coin Consumption (3) Overseas Japan Millions of U.S. dollars Billions of coins 40 25 20.4 30 19.1 28 17.5 17.3 25 16.0 23 10.3 9.6 20 13 8.7 9.3 16 8.5 10.0 9.5 8.7 8.0 7.5 0 0 2Q 3Q 4Q 1Q 2Q 2Q 3Q 4Q 1Q 2Q FY16 FY17 FY16 FY17 ■ Third-party ■ First-party/Co-developed Notes: Notes: • Coin
Slide 29: 2Q FY17 Cost Structure
3. Appendix 2Q FY17 Cost Structure Millions of yen FY17 FY17 FY16 2Q 1Q 2Q QoQ YoY Rental charges 762 102 -83 660 846 Labor costs 2,119 -12 -162 2,130 2,280 Others 2,132 338 614 1,794 1,517 Cost of sales 5,013 429 369 4,584 4,643 Advertising 1,065 434 -549 631 1,614 Commission fees 3,080 184 -550 2,
Slide 30: 2Q FY17 Balance Sheet
3. Appendix 2Q FY17 Balance Sheet Billions of yen FY17 FY17 FY16 2Q QoQ YoY 1Q 2Q Current assets 101.13 -2.78 10.49 103.91 90.64 Fixed assets 25.27 8.11 3.84 17.17 21.43 Total assets 126.41 5.33 14.33 121.08 112.07 Current liabilities 13.79 2.36 -0.18 11.43 13.97 Fixed liabilities 1.45 1.08 0.77 0.3
Slide 31: New Business Services
3. Appendix New Business Services Home-Related Services Platform Ad Media Business Health & Fitness Platform VR Business Note: Businesses in development as of December 31, 2016 30 Copyright © GREE, Inc. All Rights Reserved.
Slide 32: Breakdown of Group Headcount
3. Appendix Breakdown of Group Headcount Number of employees Headcount at Group companies end-2Q Japan Game Business - 834 Native Game Business Pokelabo, Wright Flyer Studios (421) Web Game Business funplex (253) Shared game depts. ExPlay (160) Includes GREE International Entertainment, Inc. Native
Slide 33: ■ 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