Nazara Technologies Ltd. · NSE:NAZARA
Nazara Technologies — Q3 FY2022 Earnings Presentation
73 slides from Nazara Technologies's earnings presentation, Feb 11, 2022
Slide 1: Nazara Technologies Limited
Nazara Technologies Limited (Formerly known as Nazara Technologies Private Limited) Nazara TM Date: February 11, 2022 To, Head, Listing Compliance Department Head Listing Compliance Department BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers Exchange Plaza, Plot No. C/1
Slide 2: Investor Presentation Q3 & 9MFY22
Nazara Technologies Limited Investor Presentation Q3 & 9MFY22
Slide 3: Safe Harbour
Safe Harbour This presentation and the accompanying slides (the “Presentation”), which have been prepared by Nazara Technologies Ltd. (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any sec
Slide 4: Q3 & 9MFY22 Performance
Q3 & 9MFY22 PERFORMANCE
Slide 5: Management Commentary
Management Commentary Commenting on the results, Mr. Manish Agarwal, CEO at Nazara Technologies said, “Nazara declared revenue of Rs. 4,466 Mn in 9MFY22 vs Rs. 3,308 Mn in 9MFY21, a growth of 35% on YoY basis, and our 9MFY22 EBIDTA surged by 141% to Rs. 797 Mn as compared to Rs. 331 Mn in 9MFY21. Fo
Slide 6: Key Metrics: 9MFY22 P&L Highlights
Key Metrics: 9MFY22 P&L Highlights Revenue Mix (All figures in Rs. mn) 9MFY22 9MFY21 YoY% 9MFY22 9MFY21 Revenue by business segments i. eSports 2,123 1,215 75% 11% 17% ii. Gamified early learning 1,531* 1,252 22% 3% 4% 37% 48% 5% 4% iii. Freemium 156 152 3% 34% iv. Real money gaming 180 118 53% 37%
Slide 7: Key Metrics: Q3FY22 P&L Highlights
Key Metrics: Q3FY22 P&L Highlights (All figures in Rs. mn) Q3FY22 Q3FY21 YoY% Revenue Mix Revenue by business segments Q3FY22 Q3FY21 i. eSports 1,093 578 89% 7% 11% 3% 6% ii. Gamified early learning 472* 466 1% 5% 4% 44% iii. Freemium 57 62 -8% 25% 59% iv. Real money gaming 107 55 95% 36% v. Telco s
Slide 8: Esports: Overall – Q3 & 9MFY22 Highlights
Esports: Overall – Q3 & 9MFY22 Highlights ▪ Esports segment grew by 75% YoY in 9M FY22 and 89% in Q3FY22 over Q3FY21. For esports Q3 is always the biggest quarter on account of festive season as well as no examinations and conducive weather for offline events ▪ 2021 opened new global avenues for the
Slide 9: Esports: Nodwin Gaming – Q3 & 9MFY22 Highlights
Esports: Nodwin Gaming – Q3 & 9MFY22 Highlights Nodwin Revenue EBITDA EBITDA % Publishme Revenue ▪ NODWIN Gaming continued revenue growth momentum with 71% growth in Q3FY22 and 48% in 9MFY22 on a YoY basis 812 1,534 ▪ Media revenue increased by 28% YoY in Q3FY22, accounting for 33% of total 85 116 r
Slide 10: Esports: Sportskeeda – Q3 & 9MFY22 Highlights
Esports: Sportskeeda – Q3 & 9MFY22 Highlights 9MFY22 9MFY21 Revenue EBITDA EBITDA % Revenue Mix Direct Sales 12% 12% 281 589 Programmatic Sales 88% 88% 65.1% 48.4% 40.4% India 33% 23% 54.4% 152 Geography Mix USA 47% 61% 136 259 238 ROW 20% 16% 99 141 WWE 46% 60% eSports 15% 14% 9MFY21 9MFY22 Sports
Slide 11: Gamified Learning: Paperboat Apps – Highlights (1/2)
Gamified Learning: Paperboat Apps – Q3 & 9MFY22 Highlights (1/2) Kiddopia Paid Subscriber base 350,000 340,482 321,763 324,699 327,738 316,428 Revenue EBITDA EBITDA % 300,000 280,891 257,413 472 1,531 250,000 466 1,252 200,000 18.0% 12.9% 3.5% 27.1% Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 P
Slide 12: Gamified Learning: Paperboat Apps – Highlights (2/2)
Gamified Learning: Paperboat Apps – Q3 & 9MFY22 Highlights (2/2) ▪ Q3FY22 contribution from Gamified learning stood at 25% vs 36% in Q3FY21. 9MFY22 contribution stood at 34% vs 37% in 9MFY21 ▪ Q3FY22 revenue saw a 1% growth on YoY basis partially impacted by the change in accounting policy leading t
Slide 13: Freemium: Q3 & 9MFY22 Highlights
Freemium: Q3 & 9MFY22 Highlights Revenue EBITDA EBITDA % ▪ WCC (World Cricket Championship) is the world’s largest cricket simulation game franchise on mobile and is played for ~45 minutes / day by ~10.71 62 152 156 Mn monthly active users (includes WCC2 & WCC3). The Game has a very 57 strong franch
Slide 14: Skilled based Real Money Gaming: Highlights
Skilled based Real Money Gaming: Q3 & 9MFY22 Highlights ▪ Revenue grew by 53% to Rs. 180 Mn in 9MFY22 from Rs. 118 Mn in HalaPlay Revenue EBITDA EBITDA % OpenPlay Revenue 9MFY21 ▪ For Q3FY22, revenue grew by 95% to Rs. 107 Mn from Rs. 55 Mn in 107 180 Q3FY21 118 ▪ Our strategy around RMG segment is
Slide 15: Telco Subscription: Q3 & 9MFY22 Highlights
Telco Subscription: Q3 & 9MFY22 Highlights Revenue EBITDA EBITDA % ▪ For 9MFY22, the business has declined by 17% over 9MFY21 571 ▪ The drop in revenue was mainly due to decline in revenue from 143 129 476 India Business while revenue from the Non-Indian geographies 8.5% 20.7% 20.6% has remained fla
Slide 16: Consolidated P&L
Consolidated P&L (All figures in Rs. mn) 9MFY22 9MFY21 YoY% Q3FY22 Q3FY21 YoY% FY21 Revenue from operations 4,466 3,308 35% 1,858 1,304 42% 4,542 Content, event and web server 824 342 447 187 524 Advertising and promotion 1,501 1,726 568 530 2,265 Commission 382 358 114 131 501 Employee benefits 611
Slide 17: Inorganic Acquisitions
INORGANIC ACQUISITONS
Slide 18: Nazara Strengthens presence in Skilled based sports fantasy
Nazara Strengthens presence in Skilled based sports fantasy Nazara’s Acquisition of 100% stake in Hyderabad based skill gaming company OpenPlay Technologies Private Limited Overview Rationale Consideration Financials ▪ Incorporated in September 2016 ▪ The OpenPlay acquisition offers an ▪ A total con
Slide 19: Nazara Strengthens presence in Esports
Nazara Strengthens presence in Esports ▪ Incorporated in November 2008 ▪ OML Entertainment is known for managing some of India’s biggest gaming & entertainment creators Overview such as Tanmay Bhat, Samay Raina, Suhani Shah, etc. and for owning and executing storied IPs such as the BACARDÍ NH7 Weeke
Slide 20: Nazara's Strengthens International Presence in Esports
Nazara’s Strengthens International Presence in Esports Overview Incorporated in February 2018, Publishme is a full-service games marketing and publishing agency which works extensively with gaming publishers in Turkey and MENA region Industry Operates in Free to Play Games (Freemium), E-Sports and B
Slide 21: Overview
OVERVIEW
Slide 22: Company Overview
Company Overview • A leading India-based diversified gaming and sports media platform Revenue from Operations EBITDA Diverse business segments including eSports, gamified early learning, freemium, skill-based, (in Mn Rs.) (in Mn Rs.) fantasy and trivia real money gaming, and telco subscription 10.0%
Slide 23: Our Journey
Our Journey ▪ Ushered Content Led Micro Nazara founded by Vikash Transaction Models on Telcos Mittersain & Nitish Mittersain ▪ Published cricket games around Sachin, Dhoni & Sehwag ▪ Strategic decision to be a mobile 1999 first company 2004-06 ▪ Mr. Manish Agarwal appointed as CEO in 2015 ▪ Expanded
Slide 24: Our Unique Story
Our Unique Story Only Diversified Player in India ▪ Across Geography: Developed and Emerging Markets ▪ Business Model: Advertising, Subscription, Media Rights, In-App purchases, Brand Sponsorships ▪ Across Business Segments: eSports, Sports Simulation, Early Learners and Skill based Fantasy among ot
Slide 25: Business Overview Snapshot
Business Overview Snapshot Nazara is the leading India-based diversified gaming and sports media platform Select offerings Overview Target demographics Revenue Model Immersive, self-directed learning Gamified Early Learning experience with content Children aged 2-6 years ▪ Subscription based (34% of
Slide 26: Gaming Industry
GAMING INDUSTRY
Slide 27: Gaming - New Leader in M&E Sector
Gaming - New Leader in M&E Sector Global Gaming Industry Compared with Movies & Music Indian Gaming Industry Compared with Bollywood 2017-2020 (in USD Billions) 2016-2023 (in USD Billions) Global Gaming Industry larger than Music & Movies Driven by the proclivity of the Indian population to adopt ga
Slide 28: Global Trends Affecting Gaming Eco-system
Global Trends Affecting Gaming Eco-system Per Capita Income Growth Smartphone User Penetration 2016 2020 2023E Global (in USD) India (in Rs.) 88% 90% +3.5% 81% 85% 77% 80% 85% 78% +11% 67% 72% 17,820 135.1 51% 52% 15,600 80.2 Global US China India Source: Datareportal 2015 2020 2015 2020 Source: IMF
Slide 29: The Indian Gaming Industry – Mobile gaming expected to increase
The Indian Gaming Industry – Mobile gaming expected to increase Others Indian Gaming Market China Gaming Market US Gaming Market Console (in USD Billion) (in USD Billion) (in USD Billion) Mobile 2016 15% 35% 50% 0.5 2016 52% 1% 47% 27.0 2016 24% 50% 26% 25.0 2020 6% 17% 77% 1.5 2020 38% 3% 59% 42.7
Slide 30: Gamified Early Learning
GAMIFIED EARLY LEARNING
Slide 31: Gamified Early Learning
Gamified Early Learning ▪ Flagship App – Kiddopia (COPPA certified by KidSAFE) Overview ▪ Self-directed learning experience through gamification Trusted and well recognized brand ▪ Marketed through Google, Facebook and app stores Tillywig Toy Target ▪ Children Aged 2-7 Years Award Demographics ▪ Pre
Slide 32: Kiddopia – Key Metrics
Kiddopia – Key Metrics Kiddopia Paid Subscriber base Revenue (in Mn Rs.) 350,000 340,482 324,699 327,738 316,428 321,763 280,891 1,758 300,000 1,531 257,413 1,252 250,000 200,000 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 9MFY21 9MFY22 FY21 Paying Subscribers Activation ratio from free trial t
Slide 33: US Market – An Opportunity
US Market – An Opportunity US alone huge enough to absorb Nazara’s marketing spend and gain market share Global Gamified Early Global Addressable US Gamified Early US Early Child Learning Market Population1 (2009) Learning Market Care & Education (in bn USD) (mn) (in bn USD) (in bn USD) 7 80 44 2016
Slide 34: eSports
eSPORTS
Slide 35: A. Nodwin Gaming
A. Nodwin Gaming
Slide 36: What is eSports?
What is eSports? Indira Gandhi Stadium 2019 Streamed Live Worldwide (New Delhi) Packed with thrill seeking Gen Z & Millennials, watching professional athletes compete in PUBG’s World Championships Fast Forward 6 years Intro to eSports (Video) https://bit.ly/3aDrntT Wankhede Stadium 2025 Streamed Liv
Slide 37: eSports Overview
eSports Overview ▪ Nodwin Gaming offers premium eSports content (live and on demand) to TV broadcasters and OTT platforms Overview ▪ Nodwin Gaming in partnership with game publishers and brands is engaged in providing e-sports gaming consultancy related to organizing gaming events, sponsorships and
Slide 38: eSports Growth Drivers
eSports Growth Drivers Virtuous Cycles drive eSports IAP Driven Revenues Live Stream Viewers Publishers Live Increase in Mobile spend on Streaming Mobile Gamers building Market Gamers eSports eSports eSports disrupting Symbiotic with Drives Publishers sports ecosystem Stimulates Multiple participati
Slide 39: eSports Ecosystem
eSports Ecosystem Technology & infrastructure Arrangements with game publishers and ▪ Exclusive license partnership with ESL for internet service providers management and hosting Ip based gaming events ▪ Manage and host IP-based gaming events ▪ Utilise publicly available technology platforms for hos
Slide 40: Why Will We Continue to Dominate?
Why Will We Continue to Dominate? Deep Moat : Well entrenched community connect. Create & Celebrate Heroes We Create Heroes Zero to Hero Grassroot to International ✓ Only company in India to have rights over IP and assets across grassroot, regional, national and international eSports International ✓
Slide 41: Why Will We Continue to Dominate?
Why Will We Continue to Dominate? Nazara builds and owns tech infrastructure on which global games run locally Publishers want to engage gamers Brands want to reach consumers Tech Infrastructure Servers, Data Pipes, Optimized Routes, CDN, Create Game Servers, ISP Peering, Data Centers Gaming Activat
Slide 42: B. Sportskeeda
B. Sportskeeda
Slide 43: eSports Media
eSports Media ▪ A leading sport and eSports news destination website with content across WWE, eSports, cricket, soccer and basketball ▪ Largest eSports news destination in India Overview ▪ According to Comscore report, Sportskeeda is the 2nd largest sports website in India Target ▪ eSports fans & sp
Slide 44: Key Metrics
Key Metrics Average MAU Sportskeeda Revenue (in Mn Rs.) 71,000,000 60,542,840 60,525,455 60,004,181 61,000,000 50,054,366 41,769,005 51,000,000 56,823,508 589 41,000,000 31,000,000 344 259 21,000,000 11,000,000 17,085,272 1,000,000 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 9MFY21 9MFY22 FY21
Slide 45: Freemium
FREEMIUM
Slide 46: Freemium
Freemium ▪ Freemium is Free to download games from Google play and App store Overview ▪ Casual to mid-core, free-to-play sports simulation and children’s games Established ▪ World Cricket Championship (WCC) is the largest mobile-based cricket simulation game Presence Target ▪ Players aged 15-35 year
Slide 47: Key Metrics
Key Metrics Revenue (in Mn Rs.) EBITDA (in Mn Rs.) DAU (Mn) 21.1% 13.5% 20.5% 195 2.26 2.31 152 156 40 1.80 1.62 1.89 32 21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 9MFY21 9MFY22 FY21 9MFY21 9MFY22 FY21 EBITDA % % IAP Conversion WCC3 45 1 (WCC2 & WCC3) ~10.711 mn Time spent MAUs across all 0.12% (min./day
Slide 48: IAP Drivers
IAP Drivers Surge in IAP will be Driven by Growth of Mid & Hard Core Gamers & Higher ARPPU 2018 2020 2025 Hard Core 5mn 10mn Gamers 30mn Mid Core 15mn 35mn Gamers 100mn Casual Gamers 100mn 250mn+ 500mn+ Non Gamers Revenue Pyramid 2025 Underlying Consumer Behavior – Catalyst in Growth of Mid & Hard c
Slide 49: Dominance in Cricket Gaming – A Massive Opportunity
Dominance in Cricket Gaming – A Massive Opportunity WCC is the most Downloaded Cricket Game Huge opportunity in cricket crazy India Cricket draws 93% of sports viewers in India ▪ In 2018, out of a TV viewing audience of 766mn, 93% watched cricket ▪ Nextwave’s cricket IP is similar to what FIFA (owne
Slide 50: Well poised to benefit from IAP led growth
Well poised to benefit from IAP led growth Well poised to benefit from IAP led growth For Q3FY22 48 Daily engagement is getting deeper (mins) 43 ▪ For the new cricket title ( WCC3), daily user engagement is already up to 48 mins from 43 mins ▪ Game economy developed/ fine tuned based on market feedb
Slide 51: Skill-based, Fantasy & Real Money Games
SKILL-BASED, FANTASY & REAL MONEY GAMES
Slide 52: Skill-based, fantasy and Trivia Real Money Gaming
Skill-based, fantasy and Trivia Real Money Gaming ▪ Entered skill-based gaming in India and have strategically created presence in the real money gaming segment Overview ▪ With the acquisition of Halaplay Technologies, and investments in Sports Unity, the Company is participating in sports fantasy g
Slide 53: OpenPlay KPIs
OpenPlay KPIs Net Gaming Revenue (Post Tax) EBITDA Monthly Active Users 12.6 60,000 11.2 39,981 10.2 40,000 30,745 25,854 1 8.8 22,533 20,000 1 2 2 0 15.0% 14.3% 14.8% Mar-21 Jun-21 Sep-21 Dec-21 3 20.7% 1.5 1.6 1.9 1.8 Monthly Active users Q4FY21 Q1FY22 Q2FY22 Q3FY22 Player Value - Cost Per Player
Slide 54: Large Opportunity in Skilled based fantasy gaming
Large Opportunity in Skilled based fantasy gaming Market ($ mn) Users (mn) CEA ($ mn) OFS Revenue ($ mn) 947 100 2,196 329 347 232 35 2 2018 2021 Jun-16 Mar-20 2018 2020 2018 2020 Drivers ▪ Between 2018 and 2020, Online Fantasy Sports (OFS) revenue registered a 9.4x growth ▪ While COVID-19 is likely
Slide 55: Telco Subscription
TELCO SUBSCRIPTION
Slide 56: Telco Subscription
Telco Subscription ▪ Catalogue of Android and HTML5 games offered as value-add services to telco subscribers Overview ▪ Recently acquired non-exclusive global distribution rights for games developed by Disney Target ▪ Late adopters of Internet, First-Time gamers Demographics Monetization ▪ Subscript
Slide 57: Free Cash Accretive
Free Cash Accretive Tech Platform Stable revenues with strong EBITDA generation Highly scalable and cost-efficient model ▪ One common gaming/subscription platform implemented Revenue (in Mn Rs.) EBITDA* (in Mn Rs.) across 52 telcos ▪ Revenues being generated in Middle East, Africa and S-Asia 20.7% 2
Slide 58: Rapidly Scaling Growth Through Strategic Acquisitions
RAPIDLY SCALING GROWTH THROUGH STRATEGIC ACQUISITONS
Slide 59: Strategic Acquisitions
Strategic Acquisitions ▪ Nazara has expanded its portfolio of business by consistent strategic acquisitions since 2017 ✓ Three companies (Paper boat, Nodwin Gaming and Absolute Sports) have scaled exponentially post acquisition ✓ World Cricket Championship: Iconic IP and Market leader in sports simu
Slide 60: Our Future Approach to M&A
Our Future Approach to M&A Pursue strategic investment and acquisition opportunities in underserved markets and geographies Increase stake in existing investments Focus on large total addressable market, strong local moat, clear use cases for growth capital Grow user base, deepen market penetration,
Slide 61: Unique combination of high growth annuity and great value creation
Unique combination of high growth annuity and great value creation Way Forward… ✓ Build on Nazara’s leading market position and growth opportunity in India ✓ Enhance existing offerings and increase monetization opportunities ✓ Pursue strategic investment and acquisition opportunities ✓ Further build
Slide 62: Pioneers of Indian Online Gaming Industry
PIONEERS OF INDIAN ONLINE GAMING INDUSTRY
Slide 63: Management Team
Management Team Nitish Mittersain Manish Agarwal Joint MD, Nazara Group CEO, Nazara ◼ Founded Nazara in 1999 ◼ Joined Nazara in 2015 ◼ Other Experience: Trustee of Dr. B. K. ◼ Other Experience: Reliance Games, Goyal Heart Foundation Zapak, UTV, Rediff.com, HUL Anupam Dhanuka Anshu Dhanuka Akshat Rat
Slide 64: Management Team
Management Team Savio Saldanha Sreeram Reddy Vanga Ozgur Ozalp CEO, Nazara Digital (Telco Subscription) Co-founder & CEO, Openplay Technologies CEO, Publishme ◼ Joined Nazara 10 years ago ◼ Joined Nazara September 2021 ◼ Joined Nazara in June 2021 ◼ Other Experience: Arvato Mobile Middle, ◼ Co-found
Slide 65: Board of Directors
Board of Directors Vikash Mittersain Nitish Mittersain Chairman & MD Joint MD ◼ Founded Nazara in 1999 ◼ Founded Nazara in 1999 ◼ Other Experience: Founder and President ◼ Other Experience: Trustee of Dr. B. K. of India Business Group (Chamber of Goyal Heart Foundation Commerce) Shobha Jagtiani Prob
Slide 66: Historical Financials
HISTORICAL FINANCIALS
Slide 67: Consolidated P&L
Consolidated P&L (All figures in Rs.m) FY21 FY20 Revenue from operations 4,542 2,475 Content, event and web server 524 507 Advertising and promotion 2,265 1,329 Commission 501 71 Employee benefits 487 319 Others 313 305 Total expenses 4,090 2,532 EBITDA 452 (57) EBITDA% 10.0% -2.3% Impairment Loss 4
Slide 68: Key Metrics - Revenue
Key Metrics - Revenue Revenue Mix 16% (All figures in Rs.m) FY21 FY20 37% 33% 34% 4% 3% FY21 FY20 Revenue by business segments 8% 39% 17% i. eSports 1,701 842 8% ii. Gamified early learning 1,758 191 eSports Real money gaming Gamified early learning Telco subscription iii. Freemium 195 198 Freemium
Slide 69: Key Metrics - EBITDA
Key Metrics - EBITDA (All figures in Rs.m) FY21 FY20 EBITDA by business segments Segmental EBITDA (in Rs. million) i. eSports 289 75 FY 21 FY 20 ii. Gamified early learning 126 (35) 289 iii. Freemium 40 8 242 iv. Real money gaming (90) (347) v. Telco subscription 114 242 126 114 vi. Unallocated expe
Slide 70: Consolidated Balance Sheet
Consolidated Balance Sheet As at As at As at (All figures in Rs.m) March 31, 2020 As at March 31, 2021 (All figures in Rs.m) March 31, 2020 (Restated) March 31, 2021 (Restated) Assets Non-current assets Equity and liabilities Property and equipment 17.2 22.7 Equity Right-of-use assets 21.4 86.1 Shar
Slide 71: Extract of Consolidated Cashflow Statement
Extract of Consolidated Cashflow Statement Particulars (All figures in Rs.m) March 31, 2021 March 31, 2020 Profit/(loss) before tax for the year 167.0 (195.8) Adjustment for non-cash items and others 360.2 159.2 Changes in working capital 306.5 87.0 Cash genereated from operations 833.7 50.4 Direct
Slide 72: Glossary
Glossary Term Description Term Description APAC Asia Pacific M&A Mergers and Acquisitions CAC Consumer Acquisition Cost MAU Monthly Active Users Compounded Annual Growth Rate = (End Value/Start M&E Media and Entertainment CAGR Value)^(1/Periods) -1 MS Market Share COPPA Children’s Online Privacy Pro
Slide 73: Contact Us
Contact Us Company : Investor Relations Advisors : Nazara Technologies Limited Strategic Growth Advisors Private Limited CIN: U72900MH1999PLC122970 CIN: U74140MH2010PTC204285 Rahul Agarwal / Ami Parekh Mr. Rakesh Shah rahul.agarwal@sgapl.net / ami.parekh@sgapl.net Chief Financial Officer +91 982143
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