Gree Holdings.inc. · TSE:3632
Gree Holdings.inc — Q1 FY2024 Earnings Presentation
52 slides from Gree Holdings.inc's earnings presentation, Nov 2, 2023
Slide 1: FY2024 First Quarter Financial Results
GREE, Inc. FY2024 First Quarter Financial Results November 2, 2023 Copyright © GREE, Inc. All Rights Reserved.
Slide 2: Executive Summary
Executive Summary FY24 1Q ◼ Net sales ¥15.8 billion, operating income ¥1.2 billion, EBITDA ¥1.3 billion Financial Results ⁃ The Metaverse Business remained strong, consolidated operating income was in line with Overview (Consolidated) our forecast Game and ◼ Successful 1.5yr anniversary event for He
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: FY24 1Q Financial Results Overview
1. Financial Results Overview (Consolidated) FY24 1Q Financial Results Overview Net sales ¥15.8 billion, operating income ¥1.2 billion, EBITDA ¥1.3 billion Billions of yen FY24 FY23 FY23 1Q QoQ YoY 4Q 1Q Net sales 15.79 -4.33 -22% -0.80 -5% 20.12 16.59 Operating income 1.23 -3.73 -75% -0.36 -23% 4.9
Slide 6: Net Sales and Operating Income
1. Financial Results Overview (Consolidated) Net Sales and Operating Income Sales and income down QoQ due to the absence of contribution from the Investment Business in the previous quarter Billions of yen 22.15 20.12 24.6% 16.59 16.58 15.79 19.1% 10.5% 9.5% 4.96 7.8% 4.22 1.58 1.73 1.23 1Q 2Q 3Q 4Q
Slide 7: Sales and Operating Income by Segment
1. Financial Results Overview (Consolidated) Sales and Operating Income by Segment Billions of yen FY23 FY24 QoQ YoY 1Q 2Q 3Q 4Q 1Q Game and Sales 12.88 12.16 15.85 12.77 11.72 -1.05 -8% -1.17 -9% Anime Operating income 1.88 1.65 2.06 2.06 1.56 -0.49 -24% -0.31 -17% Sales 1.69 1.64 1.52 1.82 1.96 0.
Slide 8: 1Q Operating Income Analysis
1. Financial Results Overview (Consolidated) 1Q Operating Income Analysis Sales and income down QoQ due to the absence of contribution from the Investment Business in the previous quarter, resulting in operating income of ¥1.2 billion Billions of yen ¥3.73bn decrease 4.96 -4.33 ＋0.84 -0.24 1.23 Oper
Slide 9: 1Q Cost Structure
1. Financial Results Overview (Consolidated) 1Q Cost Structure Total costs declined by ¥0.6bn to ¥14.6bn due to lower variable costs (especially advertising costs) Billions of yen FY24 FY23 FY23 Factors in change（QoQ） 1Q QoQ YoY 4Q 1Q Advertising 1.01 -0.35 -0.27 Decrease on winding down of promotio
Slide 10: Contents
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 11: Earnings Estimates and Forecast by Segment
2. Operational Overview Earnings Estimates and Forecast by Segment Billions of yen FY23 FY24 2Q FY24 Full-year FY24 1Q Full-year Estimates QoQ Forecast YoY Result Result Game and Sales 9.4-11.0 -2.3 – -0.7 -20% – -6% 41.0-45.0 -13.0 – -9.0 -24% – -17% 11.7 53.7 Anime Operating 0.9-1.4 -0.7 – -0.2 -4
Slide 12: FY24 Full-Year Earnings Forecast Progress (as of 1Q FY24)
2. Operational Overview FY24 Full-Year Earnings Forecast Progress (as of 1Q FY24) 25％ 50％ 75％ Sales 28％ ¥11.7bn ¥41.0-45.0bn Game and Anime Operating income 31% ¥1.6bn ¥5.0-6.0bn Sales 24% ¥2.0bn ¥8.1bn Metaverse Operating income ¥0.1bn ¥0.1bn -¥0.2bn Sales 23% ¥1.3bn ¥5.7bn DX Operating income 25%
Slide 13: Game and Anime Business
Game and Anime Business Senior Vice President Yuta Maeda Copyright © GREE, Inc. All Rights Reserved.
Slide 14: Summary of the Game and Anime Business
2. Operational Overview: Game and Anime Business Summary of the Game and Anime Business Sales and Operating Income Focus Points Billions of yen ◼ Heaven Burns Red 15.85 ⁃ Successful Japan 1.5yr anniversary event for Heaven 12.88 12.77 Burns Red 12.16 11.72 16.1% 14.6% ◼ Other mainstay titles 13.6% 1
Slide 15: WFS, Inc.
2. Operational Overview: Game and Anime Business WFS, Inc. Sales and Operating Income Focus Points Billions of yen ◼ Successful events including 1.5yr 11.09 anniversary event for Heaven Burns Red and collaboration events for 8.28 That Time I Got Reincarnated as a 8.11 7.62 7.60 Slime: ISEKAI Memorie
Slide 16: Pokelabo, Inc.
2. Operational Overview: Game and Anime Business Pokelabo, Inc. Sales and Operating Income Focus Points Billions of yen ◼ Sales declined QoQ on a reactive 1.42 decline from 6yr anniversary events 1.36 1.36 1.31 for SINoALICE held in 4Q of FY2023 1.06 ◼ Operating income declined QoQ on investment in
Slide 17: GREE Entertainment, Inc.
2. Operational Overview: Game and Anime Business GREE Entertainment, Inc. Sales and Operating Income Focus Points Billions of yen ◼ Strong performance due to 1.31 successes in licensing and in 1.22 1.13 1.14 outsourced development projects 27.9% 1.05 ◼ Operating income rose QoQ 21.9% 19.2% because w
Slide 18: 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 19: Earnings Estimates (2Q FY24)
2. Operational Overview: Game and Anime Business Earnings Estimates (2Q FY24) Sales and Operating Income Focus Points Billions of yen ◼ Although we expect earnings 15.85 contribution from the second anniversary of the launch of That 12.16 12.77 Time I Got Reincarnated as a 11.72 11.0 Slime: ISEKAI M
Slide 20: Earnings Forecast (Full-Year FY24)
2. Operational Overview: Game and Anime Business Earnings Forecast (Full-Year FY24) Sales and Operating Income Focus Points Billions of yen ◼ We made steady progress toward 53.7 our sales and operating income 45.0 targets and expect to reach our 41.0 initial full-year forecasts 45.0 7.6 38.0 34.0 6.
Slide 21: Medium-term Targets
2. Operational Overview: Game and Anime Business Medium-term Targets Sales and Operating Income Focus Points Billions of yen ◼ Sales forecasts factor in impact 60.3 53.8 from changes in release schedules 53.7 for new titles, contribution from 41.0-45.0 new titles is factored in conservatively ◼ Oper
Slide 22: Metaverse Business
Metaverse Business Senior Vice President Eiji Araki Copyright © GREE, Inc. All Rights Reserved.
Slide 23: Summary of the Metaverse Business
2. Operational Overview: Metaverse Business Summary of the Metaverse Business Sales and Operating Income Focus Points Billions of yen ◼ Sales rose steadily, especially in the 1.96 Platform Business 1.82 1.69 1.64 1.52 ◼ Although we continued to 7.9% 6.0% aggressively invest in the VTuber Business, o
Slide 24: Platform Business (REALITY, Inc.)
2. Operational Overview: Metaverse Business Platform Business (REALITY, Inc.) Sales and Operating Income Focus Points Billions of yen ◼ The 5yr anniversary campaign was 1.79 successful and sales increased 1.58 22.8% 1.36 1.37 ◼ Operating income improved 1.32 considerably on growth in high- margin av
Slide 25: B2B Metaverse Business (REALITY XR cloud, Inc.)
2. Operational Overview: Metaverse Business B2B Metaverse Business (REALITY XR cloud, Inc.) Sales and Operating Income Focus Points Billions of yen ◼ Earnings temporarily deteriorated 0.28 following the completion of a large- 20.4% scale project, we expect 0.23 improvement in both sales and 7.9% 3.7
Slide 26: VTuber Business (REALITY Studios, inc.)
2. Operational Overview: Metaverse Business VTuber Business (REALITY Studios, inc.) Sales and Operating Income Focus Points Billions of yen ◼ Our pool of talent is steadily 0.08 growing owing to the launch of 17.6% 0.05 0.05 VTuber talent agency Vebop Project 0.04 -17.9% 0.02 and the debut of the se
Slide 27: Earnings Estimates (2Q FY24)
2. Operational Overview: Metaverse Business Earnings Estimates (2Q FY24) Sales and Operating Income Focus Points Billions of yen ◼ Although we expect 2Q sales and 1.96 1.82 1.87 income to decline on a reactive 1.64 decline from anniversary initiatives 6.0% 1.52 implemented in the Platform Business i
Slide 28: Earnings Estimates and Forecast (Full-Year FY24)
2. Operational Overview: Metaverse Business Earnings Estimates and Forecast (Full-Year FY24) Sales and Operating Income Focus Points Billions of yen ◼ Trending above initial full-year 8.1 8.2 forecast 6.7 ◼ Expect to break even on a full-year basis 1.96 （24%） 0.12 -0.2 -0.0 -0.3 Full-year results Fu
Slide 29: Medium-term Targets
2. Operational Overview: Metaverse Business Medium-term Targets Sales and Operating Income Focus Points Billions of yen ◼ We expect steady income growth in 15.2 the Platform Business and the B2B Metaverse Business as we continue to invest in the VTuber Business, resulting in FY2026 operating income
Slide 30: DX Business
DX Business Vice President Kazuhisa Adachi Copyright © GREE, Inc. All Rights Reserved.
Slide 31: Summary of the DX Business
2. Operational Overview: DX Business Summary of the DX Business Sales and Operating Income Focus Points Billions of yen ◼ Overall DX Business sales grew only 1.46 1.44 slightly because, despite sales 1.29 1.25 1.30 growth in marketing DX owing to accumulation of support projects, 22.3% operational D
Slide 32: Marketing DX Business
2. Operational Overview: DX Business Marketing DX Business Sales and Operating Income Focus Points Billions of yen ◼ Although we made steady progress 1.11 1.10 in terms of top-line growth owing to 0.96 0.99 accumulation of support projects, 0.93 23.8% this has not resulted in 20.9% improvement in in
Slide 33: Operational DX Business
2. Operational Overview: DX Business Operational DX Business Sales and Operating Income Focus Points Billions of yen ◼ Existing support projects are on a 0.35 0.35 shrinking trend 0.33 0.32 0.30 ◼ We are working to generate sales by preparing new solutions for 17.6% external customers such as qualit
Slide 34: Earnings Estimates (2Q FY24)
2. Operational Overview: DX Business Earnings Estimates (2Q FY24) Sales and Operating Income Focus Points Billions of yen ◼ Earnings are trending sideways as 1.46 1.44 it is taking time to prepare new 22.3% 1.32 1.25 1.30 systems and new solutions 19.3% 14.6% 13.9% 11.7% 0.32 0.28 0.18 0.18 0.16 2Q
Slide 35: Earnings Estimates and Forecast (Full-Year FY24)
2. Operational Overview: DX Business Earnings Estimates and Forecast (Full-Year FY24) Sales and Operating Income Focus Points Billions of yen ◼ Trending in line with initial full-year 5.7 5.7 forecast 5.4 ◼ We plan to accumulate support projects in the runup to 2H and continue to expand our user bas
Slide 36: Medium-term Targets
2. Operational Overview: DX Business Medium-term Targets Sales and Operating Income Focus Points Billions of yen ◼ We aim to leverage new solutions 7.9 to increase earnings and target discontinuous growth while maintaining a growth rate above 5.7 the industry average. We forecast 5.4 5.0 FY2026 oper
Slide 37: Commerce Business
Commerce Business Vice President Yosuke Nakamura Copyright © GREE, Inc. All Rights Reserved.
Slide 38: Summary of the Commerce Business
2. Operational Overview: Commerce Business Summary of the Commerce Business Sales and Operating Income Focus Points Billions of yen ◼ Sales increased steadily, especially 0.35 in the aumo SaaS business 0.33 0.31 0.31 0.29 3.2% ◼ Continued investing in jobda, inc. and completed restructuring of 2.3%
Slide 39: aumo, Inc.
2. Operational Overview: Commerce Business aumo, Inc. Sales and Operating Income Focus Points Billions of yen ◼ Sales and operating income rose, 0.28 0.26 0.27 0.26 driven by expansion of the 0.25 7.0% 7.0% customer base and an increase in unit prices in the SaaS business 4.8% ◼ MAU in the Media bus
Slide 40: Earnings Estimates (2Q FY24)
2. Operational Overview: Commerce Business Earnings Estimates (2Q FY24) Sales and Operating Income Focus Points Billions of yen ◼ We expect stable growth in sales, 0.35 with QoQ sales growth on par with 0.33 0.31 0.31 1Q, especially from aumo 0.29 3.2% ◼ Operating income expected to 1.9% break even
Slide 41: Earnings Estimates and Forecast (Full-Year FY24)
2. Operational Overview: Commerce Business Earnings Estimates and Forecast (Full-Year FY24) Sales and Operating Income Focus Points Billions of yen ◼ We expect sales growth to 1.5 1.5 accelerate in 2H compared with in 1.3 1H, especially for the aumo SaaS business, and expect to reach our target of a
Slide 42: Medium-term Targets
2. Operational Overview: Commerce Business Medium-term Targets Sales and Operating Income Focus Points Billions of yen ◼ We expect operating income of 3.3 ¥400mn because, although we expect stable sales growth owing to growth in aumo’s SaaS business, we intend to continue to invest in the medium-to-
Slide 43: Investment Business
Investment Business Senior Vice President, Chief Financial Officer Toshiki Oya Copyright © GREE, Inc. All Rights Reserved.
Slide 44: Summary of the Investment Business
2. Operational Overview: Investment Business Summary of the Investment Business Sales and Operating Income Focus Points Billions of yen ◼ There were no large-scale 4.09 distributions from investment funds in 1Q and we posted a quarterly 3.41 loss 3.11 83.4% 77.8% 2.42 ◼ We will continue steady inves
Slide 45: Overview of Total Assets Under Management (AUM)
2. Operational Overview: Investment Business Overview of Total Assets Under Management (AUM) Total AUM: 82.7 billion, up ¥2.0 billion QoQ on revaluations etc. Total AUM Main investments Billions of yen Based on investee valuation Fund Investments 80.7 +0.7 -3.7 +5.0 82.7 Fund Investment Increase by
Slide 46: Strengthening Investment: Rise in unrealized value
2. Operational Overview: Investment Business Strengthening Investment Operational investment securities investment valuation of ¥33.2 billion, unrealized value remains high Quarterly change in operational investment securities investment valuation Investment status in 1Q Billions of yen Book value V
Slide 47: 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 13
Slide 48: Contents
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 49: 1Q FY24 Cost Structure
3. Appendix 1Q FY24 Cost Structure Billions of yen FY24 FY23 FY23 1Q QoQ YoY 4Q 1Q Rental charges 0.58 0.01 -0.04 0.57 0.61 Labor costs 2.41 0.16 0.14 2.25 2.27 Others 4.04 0.01 -0.13 4.03 4.16 Cost of sales 7.02 0.18 -0.03 6.84 7.05 Advertising 1.01 -0.35 -0.27 1.36 1.28 Commission fees 2.99 -0.42
Slide 50: 1Q FY24 Balance Sheet
3. Appendix 1Q FY24 Balance Sheet Billions of yen FY24 FY23 FY23 1Q QoQ YoY 4Q 1Q Current assets 107.5 0.1 3.3 107.4 104.2 Fixed assets 16.9 -0.5 0.5 17.4 16.4 Total assets 124.4 -0.4 3.8 124.8 120.6 Current liabilities 19.7 -0.7 5.6 20.4 14.1 Fixed liabilities 12.3 0.4 -4.6 11.9 16.8 Total liabilit
Slide 51: Group Headcount
3. Appendix Group Headcount Number of employees 1,632 1,618 1,670 1,667 1,593 1Q 2Q 3Q 4Q 1Q FY23 FY24 Notes: ● Includes non-consolidated group companies; as of the end of each quarter 51 Copyright © GREE, Inc. All Rights Reserved.
Slide 52: Forward-looking statements notice
◼ 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.