Slide 1: FY2015 Third Quarter Financial Results
GREE, Inc. FY2015 Third Quarter Financial Results April 28, 2015 Copyright © GREE, Inc. All Rights Reserved.
Slide 2: Executive Summary
Executive Summary Net sales ¥22.0 billion, operating income ¥4.9 billion ⁃ Net sales declined QoQ mainly due to a softening of sales of web games ⁃ Increased operating income QoQ through strict cost control Financial ⁃ Sustaining capacity to invest in the medium to long term while Results maintain
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: FY15 3Q Financial Results Overview
1. Financial Results Overview (Consolidated) FY15 3Q Financial Results Overview Net sales of ¥22.0 billion, operating income of ¥4.9 billion Increased operating income QoQ through strict cost control Billions of yen FY15 3Q FY15 2Q FY14 3Q QoQ YoY Net sales1 21.99 24.12 -2.13 31.07 -9.08 EBITDA2 6.0
Slide 6: Net sales, EBITDA, and Operating Income
1. Financial Results Overview (Consolidated) Net sales, EBITDA, and Operating Income Operating margin increased by 2.7 percentage points to 22.3% Billions of yen 400 40 40.0% 35.33 32.62 31.07 32.0% 28.1% 27.7% 26.58 25.42 24.12 23.1% 25.1% 21.99 22.3% 200 20 19.6% 20.0% 11.64 10.96 11.67 9.78 9.15
Slide 7: Operating Income Analysis
1. Financial Results Overview (Consolidated) Operating Income Analysis Operating income increased by ¥0.2 billion to ¥4.9 billion despite lower net sales, mainly due to a reduction in advertising costs and fixed costs Billions of yen ¥0.18bn increase 4.73 4.91 -2.13 +0.92 +1.40 Operating Operating D
Slide 8: FY15 3Q Cost Structure
1. Financial Results Overview (Consolidated) FY15 3Q Cost Structure Total costs decreased ¥2.3 billion to ¥17.1 billion Billions of yen FY15 FY15 FY14 Factors in change（QoQ) 3Q 2Q QoQ 3Q YoY Curbed mass-media promotion Advertising 2.05 3.15 -1.10 2.88 -0.84 (ratio to net sales: 2Q 13.1% → 3Q 9.3%) C
Slide 9: FY15 Full-year Earnings Forecast
1. Financial Results Overview (Consolidated) FY15 Full-year Earnings Forecast FY15 full-year forecast: net sales of ¥93.5 billion; operating income of ¥20.0 billion Billions of yen FY15 (Reference) Full-year Previous 1Q Actual 2Q Actual 3Q Actual 4Q Forecast Difference Forecast Forecast Net sales 25
Slide 10: 2. Operational Overview
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 11: FY15 Strategy and FY15 3Q Update: Game business
2. Operational Overview: Summary FY15 Strategy and FY15 3Q Update FY15 Decisive pivot to native game business structure Strategy* Targeting turnaround in revenues through creation of native game hit titles Japan native game business ⁃ Progress in shift to native games ⁃ Expanded operations to
Slide 12: Coin Consumption (Overall)
2. Operational Overview: Game Business KPIs FY15 3Q Coin Consumption (Overall) Overall consumption declined 10% to 31.3 billion coins Ratio of consumption on smartphones to total grew to 77% Coin Consumption Composition(%) Billions (億コイン) of coins 60 600 100% 50.8 26% 24% 23% 29% 27% 47.0 35% 32% 44
Slide 13: Coin Consumption (Native Games)
2. Operational Overview: Game Business KPIs FY15 3Q Coin Consumption (Native Games) Growth in more recent Japan releases was not sufficient to cover softening in sales of existing titles. Coin consumption for overall native game business declined 9% to 9.5 billion coins Billion coins 14 140 12.6 12.
Slide 14: Coin Consumption (Web Games)
2. Operational Overview: Game Business KPIs FY15 3Q Coin Consumption (Web Games) Overall web game consumption fell 11% to 21.7 billion coins, mainly due to a decline in existing titles Billion coins 400 40 38.2 First-party / Co-developed 34.2 31.5 Weakening of consumption on feature 15.2 27.9 phon
Slide 15: Working to create new hit titles
2. Operational Overview: Japan Game Business (Native) FY15 3Q Working to create new hit titles Expanded native game development operations in Japan to 20 pipelines, 600 people Transitioning toward the production of hit titles that will generate new revenue streams Boosted native game headcount and d
Slide 16: Growth of existing titles
2. Operational Overview: Japan Game Business (Native) FY15 3Q Growth of existing titles Shometsu Toshi delivered continued growth following mass-media promotion and content update; will pursue further growth with TV ad campaign from 4Q Growth in Shometsu Toshi ARPDAU growth Revenue growth × 1.7 ×1.4
Slide 17: Pipeline for new titles (1/2)
2. Operational Overview: Japan Game Business (Native) FY15 4Q Pipeline for new titles (1/2) Releasing new titles in Japan from April Pipeline for Japan titles Joint project between Pokelabo and First title developed in GREE’s collaboration with LINE Corporation SEGA Games Co., Ltd. SEGA Networks Com
Slide 18: Pipeline for new titles (2/2)
2. Operational Overview: Japan Game Business (Native) FY15 4Q Pipeline for new titles (2/2) Releasing strong titles for overseas markets in partnership with leading publishers Pipeline for cross-border titles Global China CROSS SUMMONER NARUTO Shinobi Masters Pokelabo China Mobile Games and Entertai
Slide 19: Existing first-party titles
2. Operational Overview: Japan Game Business (Web) FY15 3Q/4Q Existing first-party titles Actively implementing IP collaborations and other initiatives to boost user activity Boosting user engagement on long-run titles XXXXXXXXXXXXXXXXXXXXXXXX Driland Avatar Successful initiatives Successful initiat
Slide 20: Update on new partner titles
2. Operational Overview: Japan Game Business (Web) FY15 3Q/4Q Update on new partner titles New titles delivered growth on strong start. Plan to continue to expand lineup with focus on popular genres and IP Selected titles from leading partners SKYLOCK Million Arthur Extasis gloops GRIPHONE Released
Slide 21: Initiatives at U.S. Studio
2. Operational Overview: Overseas Game Business FY15 3Q/4Q Initiatives at U.S. Studio During 4Q our U.S. studio plans to release in key European countries the localized versions of long-run titles starting with one of our biggest titles Targeting the European market Top Markets by App Revenue War of
Slide 22: Home-related Services Platform
2. Operational Overview: Platform Businesses FY15 3Q/4Q Home-related Services Platform Monthly orders have reached ¥100 million. Plan to deliver enhanced online renovation service through integration of Renoco and Ie Plus Integrating services to boost growth Growth in orders Targeting further growth
Slide 23: Health & Fitness Platform
2. Operational Overview: Platform Businesses FY15 3Q/4Q Health & Fitness Platform Launched fitness lesson subscription service Lespas in Japan on April 6 Using Lespas as an entry point into the health and fitness sector Launched Lespas Lespas Health and fitness market potential Supplements Yoga Pila
Slide 24: 3. Appendix
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 25: FY14 3Q Cost Structure
3. Appendix FY14 3Q Cost Structure Millions of yen FY15 3Q FY15 2Q QoQ FY14 3Q YoY Rental charges 919 943 -24 1,104 -185 Labor costs 3,025 3,044 -19 3,644 -619 Others 2,183 2,653 -470 2,346 -163 Cost of sales 6,127 6,640 -513 7,094 -967 Advertising 2,046 3,150 -1,104 2,882 -836 Commission fees 4,250
Slide 26: FY15 3Q Balance Sheet
3. Appendix FY15 3Q Balance Sheet Billions of yen FY15 3Q FY15 2Q QoQ FY14 3Q YoY Current assets 98.30 101.69 -3.39 89.03 +9.27 Fixed assets 37.35 37.89 -0.54 59.80 -22.45 Total assets 135.65 139.58 -3.93 148.83 -13.18 Current liabilities 26.09 28.32 -2.23 32.09 -6.01 Fixed liabilities 1.97 2.01 -0.
Slide 27: Coin Consumption
3. Appendix Coin Consumption Overseas Japan Millions of U.S. dollars Billion (億コイン) coins 80 50 500 72 70 44.1 68 39.7 60 36.9 53 32.9 49 20.2 30.8 18.4 29.1 44 17.5 26.1 40 250 25 15.9 14.7 14.4 12.7 23.9 21.3 19.4 17.1 16.1 14.8 13.4 0 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q FY14 FY15 FY14 FY1
Slide 28: Coin Consumption (Smartphone Web Games)
3. Appendix Coin Consumption (Smartphone Web Games) Coin consumption Composition (%) (億コイン) Billion coins 240 100% 24 20.5 19.4 32% 33% 34% 18.8 35% 35% 38% 37% 17.2 6.5 16.7 16.0 6.5 6.4 14.4 6.1 5.9 6.0 120 5.3 50% 12 68% 67% 66% 65% 65% 62% 63% 14.0 12.9 12.3 11.1 10.8 10.0 9.1 0 0% 1Q 2Q 3Q 4Q 1
Slide 29: Breakdown of Group Headcount
3. Appendix Breakdown of Group Headcount* Number of employees Headcount at Group companies End-3Q Japan Game Business - 946 Native Game Business Pokelabo, Wright Flyer Studios (505) Web Game Business - (310) Shared game depts. - (131) Includes GREE International (U.S. Studio), GREE Native Game Busin
Slide 30: 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