Slide 1: FY2020 Second Quarter Financial Results
GREE, Inc. FY2020 Second Quarter Financial Results February 3, 2020 Copyright © GREE, Inc. All Rights Reserved.
Slide 2: Executive Summary
Executive Summary Financial ◼ Net Sales ¥16.4 billion, Operating Income ¥0.8 billion, EBITDA ¥1.1 Results billion Overview ⁃ Operating income surpassed our forecast ◼ Began distribution of third-party title ⁃ Simultaneous global release off to a smooth start Business ◼ Sales growth in US, Europe, an
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: FY20 2Q Financial Results Overview
1. Financial Results Overview (Consolidated) FY20 2Q Financial Results Overview Net sales ¥16.4 billion , operating income ¥0.8 billion , EBITDA ¥1.1 billion , net income reached ¥2.6 billion owing to gains on sales of investment securities Billions of yen FY20 FY20 FY19 2Q QoQ YoY 1Q 2Q Net sales 1
Slide 6: Net Sales, EBITDA, and Operating Income
1. Financial Results Overview (Consolidated) Net Sales, EBITDA, and Operating Income Operating income strong Billions of yen 20.0 25.0% 17.7 17.6 17.4 16.4 15.8 10.0 12.5% 8.8% 7.7% 7.4% 5.4% 5.0% 1.6 1.8 1.5 1.0 1.2 1.3 1.2 1.3 1.1 0.8 0.0 0.0% 2Q 3Q 4Q 1Q 2Q FY19 FY20 Net Sales Operating income EB
Slide 7: 2Q Operating Income Analysis
1. Financial Results Overview (Consolidated) 2Q Operating Income Analysis Net sales rose on the release of third-party distributed title, but profit declined on increased royalty and advertising costs Billions of yen ¥0.36bn decrease +0.64 -1.02 1.18 +0.02 0.81 Operating Increase in Increase in Decr
Slide 8: FY20 2Q Cost Structure
1. Financial Results Overview (Consolidated) FY20 2Q Cost Structure Total costs up ¥1.0 billion QoQ, to ¥15.6 billion Billions of yen FY20 FY20 FY19 Factors in change (QoQ) 2Q QoQ YoY 1Q 2Q Advertising 0.76 0.10 -0.13 Increase on year-end season ad campaign, etc. 0.65 0.89 Commission 5.35 0.62 -0.10
Slide 9: Investment Securities Held
1. Financial Results Overview (Consolidated) Investment Securities Held Posted roughly ¥3.0bn in gains from sales of investment securities Continued strong investment performance since 1Q Upside Investment examples ¥36bn Investment in shares Listed in Listed in July 2019 December 2019 ¥19bn VC inves
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 FY20 Business Plan Review Continue to - Smooth launch of third-party distributed title in the Overall strengthen 3 game business earnings pillars - Simultaneous global release of third-party Game/entertainment distributed title “Game engine,
Slide 12: Game business Progress Made
2. Operational Overview: Game business Progress Made Coin consumption (App games) Topics Billions of coins ◼ Released third-party distributed 12.0 11.0 10.9 title on November 20 十億 10.5 10.3 10.0 ◼ Increased overseas sales of first- party IP title in US, Europe, and Asia 6.0 - Successful global mark
Slide 13: Development pipeline
2. Operational Overview: Game business Development pipeline Simultaneous global release of third-party distributed title Scheduled for release in FY20 FY21 and onward Already In Planning/ released development development 1 1 4 6 - ・Two strong third-party IP titles scheduled ・Number of titles in the
Slide 14: Title in development: Heaven Burns Red
2. Operational Overview: Game business Title in development (scheduled for release in FY21 or later) Heaven Burns Red • Development in cooperation with Key, VISUAL ARTS that has produced content for many hit games and animations including AIR, CLANNAD, Little Busters!, and Angel Beats! © VISUAL ARTS
Slide 15: Title in development: Assault Lilly: Last Bullet
2. Operational Overview: Game business Title in development (scheduled for release in FY21 or later) Assault Lilly: Last Bullet • Assault Lilly: Last Bullet, GREE’s third title developed in cooperation with Bushiroad, is currently in development. • Planning a wide-ranging media mix including develop
Slide 16: Strengthening earnings potential of overseas distribution
2. Operational Overview: Game business Strengthening earnings potential of overseas distribution Increased sales in US, Europe, and Asia by strengthening global marketing of Another Eden series Marketing initiatives Overseas sales Up 2.7x • Strengthened global marketing November December • Simultane
Slide 17: Overseas Distribution Plans
2. Operational Overview: Game business Overseas Distribution Plans Simultaneous global release of third-party distributed title Distribution region North Hong Kong, Mainland Japan America Europe Taiwan, etc. China Released Agreement Released Released 10/24 Released signed DanMachi Agreement Released
Slide 18: Expanding and Energizing Fan Communities ①
2. Operational Overview: Game business Expanding and Energizing Fan Communities ① Energized users with large-scale campaigns SINoALICE DanMachi Year-end season campaign 2.5-year anniversary campaign • Combined official live broadcasts and SNS • Additional storylines and revival gacha with events Not
Slide 19: Expanding and Energizing Fan Communities ②
2. Operational Overview: Game business Expanding and Energizing Fan Communities ② Expanded fan base through IP collaborations Senki Zesshou SYMPHOGEAR XD UNLIMITED Shoumetsu Toshi 0. IP collaboration IP collaboration • Collaboration with Godzilla • Collaboration with PSYCHO-PASS © Project シンフォギ ア ©
Slide 20: Growing Distribution Platform
2. Operational Overview: Live Entertainment business Growing Distribution Platform Expanded REALITY platform by strengthening functionality and forming partnerships Strengthened functionality Service partnerships Launched low-latency mode Capital and operational tie-up with Cluster, Inc. • Sizable r
Slide 21: Strengthened Media Potential
2. Operational Overview: Advertising and Media business Strengthened Media Potential Energized user communities through campaign, tie-ups LIMIA aumo Held posting campaign Tie-up with The Nishinippon Shimbun Co., Ltd. • Energized users community by photo • Cooperated with partner Nishinippon contest
Slide 22: 3. Appendix
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 23: Coin Consumption
3. Appendix Coin Consumption Billions of coins 17.3 17.1 16.4 1.0 0.8 0.7 14.8 14.7 0.6 0.5 5.3 4.9 4.5 4.3 3.9 11.1 11.4 11.2 10.0 10.3 2Q 3Q 4Q 1Q 2Q FY19 FY20 ■Game apps ■Browser games (smartphones) ■Browser games (feature phones) 23 Copyright © GREE, Inc. All Rights Reserved.
Slide 24: 2Q FY20 Cost Structure
3. Appendix 2Q FY20 Cost Structure Billions of yen FY20 FY20 FY19 2Q QoQ YoY 1Q 2Q Rental charges 0.59 0.05 -0.11 0.54 0.70 Labor costs 2.20 -0.11 -0.01 2.31 2.21 Others 4.78 0.52 -0.75 4.25 5.53 Cost of sales 7.56 0.46 -0.88 7.11 8.44 Advertising 0.76 0.10 -0.13 0.65 0.89 Commission 3.27 0.17 -0.21
Slide 25: 2Q FY20 Balance Sheet
3. Appendix 2Q FY20 Balance Sheet Billions of yen FY20 FY20 FY19 2Q QoQ YoY 1Q 2Q Current assets 98.4 3.7 2.1 94.7 96.3 Fixed assets 29.7 0.7 0.5 29.0 29.2 Total assets 128.1 4.4 2.6 123.7 125.4 Current liabilities 12.6 1.5 0.3 11.0 12.2 Fixed liabilities 0.9 0.0 0.0 0.9 0.9 Total liabilities 13.5 1
Slide 26: Group Headcount
3. Appendix Group Headcount Number of employees 1,746 1,729 1,712 1,701 1,693 2Q 3Q 4Q 1Q 2Q FY19 FY20 Note: • Includes non-consolidated group companies; as of the end of each quarter 26 Copyright © GREE, Inc. All Rights Reserved.
Slide 27: Forecasts and information disclaimer
■ 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.