Slide 1: 4Q23 & FY2023 Earnings Results
4Q23 & FY2023 Earnings Results FEBRUARY 8, 2024
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: KRAFTON in 2024
Kao JARKER ~ KRAFTON in 2024 KRAFTON CEO CH Kim
Slide 4: Confidence in Long-term Growth and Sustainability of PUBG IP
Looking Back on 2023 Confidence in Long-term Growth and Sustainability of PUBG IP 2023 Message Recap: PUBG IP Key Performance of PUBG in 2023 • Strengthened F2P transition momentum • Solid growth of PUBG PC/Console - Overall enhancements of In & Out-game content - Revenue growth for three consecutiv
Slide 5: From "Original Creative" to "Scale-up the Creative"
KRAFTON’s 2024 Strategic Focus From “Original Creative” to “Scale-up the Creative” 2023 Message Recap: Key Direction 2024 Strategic Focus: Scale-up the Creative Discover original creatives to scale-up as “1B IP”s • “Original Creative” DNA + a shift in perspective • Scale-up discovered creatives, pro
Slide 6: Exploring Possibilities and Restructuring through Scale-up the Creative
Scale-up Direction Exploring Possibilities and Restructuring through Scale-up the Creative Popularize Core Gameplay Direction of Restructuring IP Franchise • Multi-Publishing Line to efficiently Transition to GaaS model launch multiple new titles • A single command line established Expanding platfor
Slide 7: Strategic Titles for 2024
Strategic Titles for 2024 2 Mobile Bringing the pioneering Securing the Expanding a solo Popularizing the Sequel to the original IP original Extraction RPG unique position of a developer’s creativity Extraction Shooter genre pursuing community-first to the mobile platform life simulation game to the
Slide 8: Scale-up Potentials Through 2nd Party Publishing
Venturing into Broader Discoveries Through 2PP Scale-up Potentials Through 2nd Party Publishing Nirvanana Far From Home Dinkum Funny Storm Gardens Interactive Playgig Studio Sai Boundary People Can Fly Fuzzy Bot … Is there an Original Creative? Is there potential to be Scaled-up through 2PP? 8 8
Slide 9: 2024, the Tipping Point for Stepwise Growth
2024, the Tipping Point for Stepwise Growth Seeking Solid Growth for PUBG IP and Stepwise Growth Through New IPs under ‘Scale-up the Creative’ Revenue Scale-up the Creative for Stepwise growth Discover/nurture new IPs Return on investment In every 3 to 5 years Solid Growth in Existing Live Service U
Slide 10: Key Initiatives for Future Growth
Key Initiatives for Future Growth 10
Slide 11: Expand as a PUBG IP Multi-product and Ultimately Scale-up to a 10B IP
PUBG IP Franchise Expand as a PUBG IP Multi-product and Ultimately Scale-up to a 10B IP Enhance Venture Mobile Audience PUBG PC Console Expansion Gameplay Platform Reboot & Single-play Hardcore & Hybrid Casual Strengthen Core & Community Implement Game Experience Mobile Adaptation of HardcoreGaming
Slide 12: BGMI Solid Growth, Publishing/Esports/New Business Opportunities
India BGMI Solid Growth, Publishing/Esports/New Business Opportunities Steady Growth of BGMI Expand Publishing Titles Leveraging Strong Presence Continuous Development of BGMI Esports Increase Investment and Explore New Opportunities 12 12
Slide 13: Advancements in Deep Learning Technology to Lead the Future
AI Advancements in Deep Learning Technology to Lead the Future 2023 Key Activities 2024 Strategic Focus (AI Application and Acceleration) AI Technology Development Production Cost Down Dramatic reduction in costs, LLM enhancements, Data generation / LLM Programming / Application to learn game lores
Slide 14: Wrapping Up
Wrapping Up Focusing on Core Values of Original Creative Scale-up the Creative: Long-term Perspective More and Faster Attempts (2PP, Multi-Publishing Line) Securing M&A Opportunities Tipping Point for Stepwise Growth 14 14
Slide 15: 4Q23 & FY2023 Financial Performance
4Q23 & FY2023 Financial Performance CFO Dongkeun Bae 15
Slide 16: 2023 Results at a Glance
Revenue FY2023 Revenue KRW 1.9 tn Achieved all-time high revenue driven by our core IP, PUBG 2023 Results at Robust growth of PC/Console revenue a Glance driven by F2P transition of PUBG PC/Console, PC/CONSOLE 2X FY2023 PC/Console Revenue vs. FY2020 Growth enhanced live service, and stable traffic O
Slide 17: 4Q Earnings Summary
4Q Earnings Summary Revenue KRW 534.6bn (KRW bn) 4Q 2022 3Q 2023 4Q 2023 QoQ YoY FY2022 FY2023 YoY Revenue 473.8 450.3 534.6 18.7% 12.8% 1,854.0 1,910.6 3.1% Revenue grew QoQ 18.7% and YoY 12.8% driven by growth in PC, Mobile, and Console despite low-seasonality PC 139.1 121.3 167.1 37.8% 20.1% 465.
Slide 18: Revenue Breakdown
Revenue Breakdown Revenue (KRW bn) 4Q 2022 3Q 2023 4Q 2023 QoQ YoY FY2022 FY2023 YoY Revenue 473.8 450.3 534.6 18.7% 12.8% 1,854.0 1,910.6 3.1% 2023 KRW 1,910.6bn (YoY 3.1% ↑) PC 139.1 121.3 167.1 37.8% 20.1% 465.0 583.9 25.6% 4Q23 KRW 534.6bn (QoQ 18.7% ↑, YoY 12.8% ↑) Mobile 254.7 309.1 342.7 10.9
Slide 19: Operating Expenses & Profit
Operating Expenses & Profit Operating Profit (KRW bn) 4Q 2022 3Q 2023 4Q 2023 QoQ YoY FY2022 FY2023 YoY Operating Costs 347.6 261.0 370.2 41.8% 6.5% 1,102.4 1,142.5 3.6% 2023 KRW 768.0bn (YoY 2.2% ↑) Personnel 63.41) 102.3 120.9 18.2% 90.8% 364.81) 427.3 17.1% 4Q23 KRW 164.3bn (QoQ 13.2% ↓, YoY 30.3
Slide 20: Net Profit
Net Profit Net Profit (KRW bn) 4Q 2022 3Q 2023 4Q 2023 QoQ YoY FY2022 FY2023 YoY Non-Operating Profit (349.1) 91.2 (138.0) T/D2) C/D2) (67.7) 60.6 T/P2) 2023 KRW 594.1bn (YoY 18.8% ↑) Non-Operating Income (40.2) 103.3 190.6 84.6% n/m 318.5 521.0 63.6% 4Q23 KRW -13.2bn (QoQ T/D2), YoY C/D2)) Other In
Slide 21: Q&A
Q&A CEO CFO CH Kim Dongkeun Bae
Slide 22: Appendix
Appendix 22
Slide 23: Summary of Financial Statements
Summary of Financial Statements Consolidated Income Statement 2022 2023 (KRW bn) 2022 2023 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Revenue 523.0 423.6 433.7 473.8 538.7 387.1 450.3 534.6 1,854.0 1,910.6 Operating Costs 208.0 257.7 289.1 347.6 255.7 255.6 261.0 370.2 1,102.4 1,142.5 Operating Profits 315.0 165.8 144
Slide 24: Summary of Financial Statements
Summary of Financial Statements Consolidated Statement of Financial Position (KRW bn) FY 2022 FY 2023 (KRW bn) FY 2022 FY 2023 Assets Liabilities Current Assets 3,892.6 3,964.4 Current Liabilities 411.5 520.7 Cash and Cash Equivalents1) 3,125.3 3,061.4 Non-current Liabilities 509.9 360.9 Other Curre
Slide 25: Our Vision
Our Vision W H y We believe games will become the world’s most powerful medium. H 0 W Based on our creativity, steadfast dedication toward new challenges and technological development, W H AT We will further expand our original IPs and build immersive, virtual worlds, where our fans play together an