Nazara Technologies Ltd. · NSE:NAZARA
Nazara Technologies — Investor Presentation (May 2021)
53 slides from Nazara Technologies's investor presentation, May 30, 2021
Slide 1: Intimation of Investor Presentation for Financial Year 2021
Na ara Te nologies Limited (Formerly known as Nazara Technologies Private Limited) Nazara™ May 29, 2021 BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, Exchange Plaza, C-1, Block G, Dalal Street, Bandra Kurla Complex, Bandra {E), Mumbai- 400001 Mumbai - 400 051 Securi
Slide 2: Nazara Technologies Limited FY21 Investor Presentation
Nazara Technologies Limited FY21 Investor Presentation May 2021
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: 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 3.7%
Slide 5: 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 6: 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 7: 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 (39% of
Slide 8: Gaming Industry
GAMING INDUSTRY
Slide 9: 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 10: 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 11: 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 12: Gamified Early Learning
GAMIFIED EARLY LEARNING
Slide 13: 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 14: Kiddopia – Key Metrics
Kiddopia – Key Metrics Kiddopia Paid Subscriber base Kiddopia Unit Economics +72% Particulars in USD 3,40,282 Lifetime Value (24 months) 61 (less) App Store Commissions 28% +274% Net LTV (24 months) 44 1,97,552 (less) Cost of Subscription 30 Gross Profit 14 Gross Margin 32% 52,785 Content Cost 8-10%
Slide 15: 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 16: eSports
eSPORTS
Slide 17: A. Nodwin Gaming
A. Nodwin Gaming
Slide 18: 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 19: 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 20: 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 21: 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 22: 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 23: 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 24: B. Sportskeeda
B. Sportskeeda
Slide 25: 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 26: Key Metrics
Key Metrics Financials from the date of Acquisition MAU Sportskeeda 8,00,00,000 Revenue (in Mn Rs.) EBITDA (in Mn Rs.) 6,00,00,000 4.6% 48.8% 343.2 4,00,00,000 167.4 2,00,00,000 - 66.7 Jun-20 Aug-20 Sep-20 Feb-21 Jan-21 Oct-20 Dec-20 Jul-20 Mar-21 Nov-20 Apr-20 May-20 3.1 FY20* FY21 FY20* FY21 *incl
Slide 27: Freemium
FREEMIUM
Slide 28: 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 29: Key Metrics
Key Metrics DAU ( in Mn) WCC Revenue (in Mn Rs.) EBITDA (in Mn Rs.) 3.00 33.4% 21.2% 2.50 2.00 197.8 195.2 66.1 1.50 1.00 41.3 0.50 Apr-20 Oct-20 Mar-21 Jul-20 Jan-21 Jun-20 Aug-20 Dec-20 May-20 Sep-20 Nov-20 Feb-21 FY20 FY21 FY20 FY21 DAU (in million) EBITDA % % IAP Conversion WCC 0.180% 46 1 (WCC)
Slide 30: 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 31: 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 32: Well poised to benefit from IAP led growth
Well poised to benefit from IAP led growth Well poised to benefit from IAP led growth 55 Daily engagement is getting deeper (mins) ▪ For the new cricket title ( WCC3), daily user engagement is already up 45 to 55 mins from 45 mins ▪ Game economy still being developed/ fine tuned based on market WCC
Slide 33: Skill-based, Fantasy & Real Money Games
SKILL-BASED, FANTASY & REAL MONEY GAMES
Slide 34: 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 35: Large Opportunity playing with binary risks of statutory issues
Large Opportunity playing with binary risks of statutory issues 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 Regulation ▪ Between 2018 and 2020, Online Fantasy Sports (OFS) revenue registered a 9.4x growth ▪
Slide 36: Telco Subscription
TELCO SUBSCRIPTION
Slide 37: 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 38: 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 EBITDA* (in Mn Rs.) Revenue (in Mn Rs.) across 52 telcos 25.2% ▪ Revenues being generated in Middle East, Africa and S-Asia 1
Slide 39: Rapidly Scaling Growth Through Strategic Acquisitions
RAPIDLY SCALING GROWTH THROUGH STRATEGIC ACQUISITONS
Slide 40: 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 41: 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 42: 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 43: Pioneers of Indian Online Gaming Industry
PIONEERS OF INDIAN ONLINE GAMING INDUSTRY
Slide 44: 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 45: 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 46: Financials
FINANCIALS
Slide 47: Consolidated P&L
Consolidated P&L (All figures in INRm) FY21 FY20 Revenue from operations 4,542.1 2,475.1 Other income 143.3 154.6 Total income 4,685.3 2,629.7 Content, event and web server 524.4 506.9 Advertising and promotion 2,264.6 1,329.3 Commission 501.1 71.3 Employee benefits 486.9 318.8 Others 312.6 305.4 To
Slide 48: Key Metrics - Revenue
Key Metrics - Revenue Revenue Mix 16% (All figures in INRm) FY21 FY20 37% 33% 34% 4% 3% FY21 FY20 Revenue by business segments 8% 39% 17% i. eSports 1,700.6 841.6 8% ii. Gamified early learning 1,758.4 191.3 eSports Gamified early Learning Freemium Real Money Gaming iii. Freemium 195.2 197.8 Telco S
Slide 49: Key Metrics - EBITDA
Key Metrics - EBITDA (All figures in INRm) FY21 FY20 EBITDA by business segments Segmental EBITDA (in INR million) i. eSports 304.8 74.8 ii. Gamified early learning 125.7 (34.6) FY 21 FY 20 305 iii. Freemium 41.3 66.1 iv. Real money gaming (57.5) (347.2) 206 v. Telco subscription 137.3 205.8 137 126
Slide 50: Consolidated Balance Sheet
Consolidated Balance Sheet As at As at As at (All figures in INRm) March 31, 2020 As at March 31, 2021 (All figures in INRm) 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 51: Extract of Consolidated Cashflow Statement
Extract of Consolidated Cashflow Statement Particulars (All figures in INRm) FY 21 FY 20 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 taxes (159.6) (72.
Slide 52: 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 53: Contact Us
Contact Us Company : Investor Relations Advisors : Strategic Growth Advisors Private Limited Nazara Technologies Ltd. CIN: U74140MH2010PTC204285 CIN: U72900MH1999PLC122970 Rahul Agarwal / Ami Parekh Ms. Pratibha Mishra rahul.agarwal@sgapl.net / ami.parekh@sgapl.net Investors@nazara.com +91 982143 88
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