Krafton, Inc. · KRX:259960
Krafton — Q4 2022 Earnings Presentation
26 slides from Krafton's earnings presentation, Feb 8, 2023
Slide 1: 4Q22 & FY2022 Earnings Results
4Q22 & FY2022 Earnings Results Investor Relations 2023. 2. 8
Slide 2: Disclaimer
Disclaimer Financial statements included in this document are consolidated results of KRAFTON, Inc. (the “Company”) and its subsidiaries and have been prepared in accordance with K-IFRS. Financial results and operational performance included herein have been prepared for investors’ convenience only
Slide 3: CEO CH Kim
KRAFTON KRAFTON FEBRURARY 2023 in 2023 CEO CH Kim
Slide 4: Looking Back on 2022
Looking Back on 2022 PUBG PC – Successful F2P positioning with new, user-friendly paid content development Attempted expansion into mobile, gained experience in production and global live operations Launched AAA console game targeting global markets and attempted to expand platforms, internalized pr
Slide 5: Core Business – Continuous Growth of PUBG IP
Core Business – Continuous Growth of PUBG IP 2022 Outcomes PUBG IP in the Future F2P transition Sustainable service for 10+ years Strengthen the foundation laid by F2P transition - Overall improvement of in/out game contents - Global traffic inflow and expansion - Continuous growth in traffic/reve
Slide 6: KRAFTON's 2023 Strategic Focus
KRAFTON’s 2023 Strategic Focus KRAFTON has granted its Creative Studios full autonomy during the game production process to promote creativity. However, in the future, HQ will be closely collaborating with studios, tightly monitoring and managing based on objective standards and indicators, includin
Slide 7: KRAFTON's 2023 Strategic Focus
KRAFTON’s 2023 Strategic Focus Discover early-stage game studios / games with big potential and provide equity investment and production & publishing support Expand our IP portfolio through equity investments + 2nd party publishing Strengthen Maximize synergy by utilizing Publishing Capabilities KRA
Slide 8: KRAFTON Pipeline
KRAFTON Pipeline Incubating Pipeline Game Release Plan (’23 ~ ’25) Title Categories Total ‘23 ‘24 ‘25~ Details 21 • Project BlackBudget • The Next Subnautica Strategic 6 - 4 2 • Project Impact • Project GoldRush • Project Windless 14 Creative Studio 7 2 3 2 10 (PC, Console) Creative Studio 4 4 - - •
Slide 9: KRAFTON Pipeline – Project Introduction
KRAFTON Pipeline – Project Introduction Project BlackBudget The Next Subnautica Project GoldRush Project Windless Challenging ourselves to popularize The sequel to Subnautica, a survival Targeting a Western audience of the Aspiring for high-quality the extraction shooter genre based adventure game t
Slide 10: New Biz – AI / Deep Learning
New Biz – AI / Deep Learning KRAFTON Deep Learning HQ’s TTS is the country’s best, and we expect AI / DL tech to bring exciting & innovative changes to our in-house production processes Set up a dedicated team for increasing game production efficiency & standardizing technology across the company wi
Slide 11: New Biz – AI / Deep Learning
New Biz – AI / Deep Learning Vision & Animation Data Centric Deep Learning Also focusing on discovering new gameplay based on AI / DL Multi Modal AI Developing ‘Virtual Game Friend’ Allow users to experience playing with & TTS befriending in-game characters Develop VGF by end of 2023, introduce
Slide 12: New Biz – Open World UGC Game Platform
New Biz – Open World UGC Game Platform Building an immersive space, with creator tools, and a creator economy system C2E Platform fee Creator Contents Gen. Z Sandbox Brand / IP User Platform Virtual world + Sandbox Contents fee ✔ Killer Seamless contents experience 12
Slide 13: New Biz – Open World UGC Game Platform
New Biz – Open World UGC Game Platform Utilize Game Upon Completion Platform Business Production Tech to of the JV Process, with Great Potential Launch UGC + C2E Will Operate Ecosystem Independently Mobile-oriented Official Release Open World Within 2023 Virtual Space Service (Testing Begins H1)
Slide 14: CFO Dongkeun Bae
FEBRUARY 2023 CFO Dongkeun Bae
Slide 15: 2022 Results at a Glance
2022 Results at a Glance 2022 Key performance New Registered Users after F2P(1) PC & Console Revenue % in 2022 Key AI/Deep Learning R&D Areas(2) 45M 31% 4 Key financial Highlights 94 % + 16 % YoY 43 % Overseas Revenue Operating Profit Adj. EBITDA Margin(3) Note: (1) New Registered Users of PUBG PC/C
Slide 16: 2022 & 4Q22 Financials
2022 & 4Q22 Financials Revenue 2022 KRW 1,854.0bn (-1.7% YoY) 매출 4Q22 KRW 473.8bn (+9.2% QoQ, +6.8% YoY) Operating Profit 2022 KRW 751.6bn (+15.5% YoY) 영업이익 4Q22 KRW 126.2bn (-12.8% QoQ, +178.8% YoY) Annual Quarterly Revenue Quarterly Operating Profit KRW bn KRW bn KRW bn 60% 41% 46% 38% 95% 39% 35%
Slide 17: PC: Further Strengthened Live Service since F2P
PC Further Strengthened Live Service since F2P, Traffic and Revenue Boost to Continue with Deeper Focus on Core Gameplay • (2022 Revenue +16.7% YoY) Expansion of global user base on back of F2P transition, YoY growth driven by fresh, user-friendly contents • (4Q22 Revenue +6.1% QoQ, +21.6% YoY) QoQ
Slide 18: Mobile
Mobile Sustained Leadership in Mobile BR Genre with Improved Retention and Monetization despite Global Reopening • (2022 Revenue -11.6% YoY) Decreased YoY due to global reopening and BGMI ban despite strong results in 1H22 • (4Q22 Revenue -9.8% QoQ, -16.1% YoY) Retained traffic despite the low seaso
Slide 19: Console
Console Extensive Experience and Technology from Global Console Launch, Expect Increased Console Revenue with New Pipelines • (2022 Revenue +430.2% YoY) Increased revenue growth due to the launch of ‘The Callisto Protocol’ • (4Q22 Revenue +477.7% QoQ, +912.0% YoY) QoQ and YoY increase from steady gr
Slide 20: Expense Breakdown
Expense Breakdown Operating Costs 2022 KRW 1,102.4bn (-10.7% YoY) 매출 4Q22 KRW 347.6bn (+20.2% QoQ , -12.7% YoY) • (Personnel) 2022 +5.7% YoY, 4Q22 -35.9% QoQ, -31.4% YoY • 4Q22 decreased QoQ and YoY due to the reversal of provision related to incentives recognized in the past • (Paid Commissions) 20
Slide 21: Operating Profit / Adj. EBITDA
Operating Profit / Adj. EBITDA Operating Profit 2022 KRW 751.6bn (+15.5% YoY) 매출 4Q22 KRW 126.2bn (-12.8% QoQ, +178.8% YoY) Adj. EBITDA 2022 KRW 792.7bn (-10.2% YoY) 영업이익 4Q22 KRW 160.3bn (-8.1% QoQ, +30.8% YoY) • 4Q22 Adj. EBITDA increased 31% YoY, with Adj. EBITDA margin of 43% Operating Profit (Q
Slide 22: Net Profit
Net Profit Profit Before Income Tax 2022 KRW 683.9bn (-10.2% YoY) 매출 4Q22 KRW -222.9bn (-171.1% QoQ, -664.2% YoY) Net Profit 2022 KRW 500.2bn (-3.8% YoY) 영업이익 4Q22 KRW -165.4bn (-173.1% QoQ, -2,751.1% YoY) • 4Q22 Net Profit decreased QoQ and YoY due to non-operating loss from impairment of intangibl
Slide 23: Mid-to-Long Term Shareholder Return Policy
Mid-to-Long Term Shareholder Return Policy Focus Financial Resource Execution Method Shareholder return policy to create higher Buyback and Retirement of (FCF(1) - Investment) x 40% shareholder value as a listed company Treasury Shares Build trust with our shareholders and ‘Investment’ excludes inve
Slide 24: Summary of Financial Statements
Summary of Financial Statements Consolidated Income Statement Consolidated Statement of Financial Position KRW bn 4Q21 1Q22 2Q22 3Q22 4Q22 KRW bn 4Q21 1Q22 2Q22 3Q22 4Q22 Revenue 443.5 523.0 423.6 433.7 473.8 Current Assets 3,653.7 3,715.7 3,811.0 3,979.2 3,892.6 Cash and Cash Operating Costs 398.3
Slide 25: Q&A
Q&A CEO CFO CH Kim Dongkeun Bae
Slide 26: Our Vision
Our Vision WHY HOW WHAT We believe games will become the world’s most powerful medium. Based on our creativity, steadfast dedication toward new challenges and technological development, We will further expand our original IPs and build immersive, virtual worlds, where our fans play together and shar